Illinois Amends Credit Union Act
The Illinois Credit Union Act has been amended by changing Sections 4, 22, 33, 46, and 52 and adding Section 64.7. This article will highlight some of the most important changes. These provisions are effective immediately.
Section 4
This section of the Illinois Credit Union Act describes the procedure for making amendments to articles of incorporation and bylaws. The amended version of Section 4 combines both the articles of incorporation and the bylaws so the rule is the same for both. Previously, the procedure for amending the articles of incorporation was slightly different than the procedure for amending bylaws.
Section 33
Previously it was the responsibility of the credit committee (or if no credit committee had been appointed, the board of directors) to appoint a credit manager who was empowered to approve or disapprove loans and lines of credit under conditions prescribed by the board of directors. Now that responsibility belongs to the credit committee, board of directors, or chief management official.
Section 46
Illinois Credit Union Act section 46 now includes a clause further explaining prepayment penalties: “A prepayment penalty does not include a waived, bona fide third-party charge that the credit union imposes if the borrower prepays all of the transaction’s principal sooner than 36 months after consummation of a closed-end credit transaction, a waived, bona fide third-party charge that the credit union imposes if the borrower terminates an open-end credit plan sooner than 36 months after account opening, or a yield maintenance fee imposed on a business loan transaction.”
Section 52
This amendment removes credit manager from the members to which a credit union can make a loan.
Section 64.7
This new section governs network credit unions. When two or more credit unions merge pursuant to section 63 of the Illinois Credit Union Act, they can request a designation as a network credit union from the Secretary of Financial and Professional Regulation. The network credit union is the surviving legal entity in the merger. “A network credit union is a cooperative business structure comprised of 2 or more merging credit unions with a collective goal of efficiently serving their combined membership and gaining economies of scale through a common vision, strategy, and initiative.”
The full text of these amendments can be found here.
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