NAPERVILLE, Ill. (6/5/14)--Both chambers of the Illinois General Assembly last week overwhelmingly passed an Illinois Credit Union League-backed bill that would provide consistency in the regulatory examinations of state-chartered credit unions.
House Bill 5342 was sponsored by longtime credit union supporters Deputy Majority Leader Rep. Lou Lang (D-Skokie) and Sen. Dave Koehler (D-Peoria). The Illinois league worked with the state Department of Financial and Professional Regulation to draft guidelines that ensure all state regulatory examinations are conducted in a procedurally and substantively consistent manner.
"This measure will help ensure we maintain a consistent exam protocol in Illinois for the benefit of all parties concerned," said Stephen Olson, league executive vice president/general counsel. "There will now be standards that state-chartered credit unions can reference and rely upon with respect to the entire regulatory examination process."
League President/CEO Sean Hession said, "The contents of the bill, as well as the rules and guidelines to promulgate it, are cause for celebration and will serve as a model across the country for state and federal regulators."
The bill passed in the Illinois House by a vote of 109-0-1 on March 21 and then in the Senate 56-0 on May 28. It is awaiting signature by Gov. Pat Quinn.
Key elements of HB 5342 include:
Board members must have a basic understanding of the credit union's financial statements, services and products offered to the membership, operational risks and internal control structures;
Supervisory committee members must receive annual training with respect to their statutory duties;
Authorization for credit unions to forego the burden of procuring a new appraisal in connection with a mortgage loan renewal, refinancing or restructuring, when no new money is advanced (other than closing costs).
By written agreement, credit unions can share daily operational services, correspondent services and fixed assets to achieve improved economies of scale.
Establishment of charitable donation to buttress credit union charitable giving efforts in the current low-yield environment. These accounts, which may include otherwise impermissible investments, will give a credit union the opportunity to achieve a higher yield provided that at least 51% of the return from the account is donated to a recognized charity.