Removing Barriers Blog

Illinois League Secures Legislative Victories
Posted August 24, 2016 by CUNA Advocacy

Fresh off the heels of a successful NCSL Legislative Summit in Chicago, two pieces of state legislation supported by the Illinois Credit Union League (ICUL) were recently signed by Illinois Gov. Bruce Rauner.

H 5755, passed unanimously by both state chambers and includes technical changes to the Illinois Credit Union Act.

 Among the updates in the immediately effective law are:

  • A credit union's board of directors is authorized to amend articles of incorporation upon a two-thirds vote by the directors. The board will be enabled to more efficiently address topics that require changes to the articles of incorporation, such as field of membership expansions or name changes;
  • Internal corporate governance authorizations revolving around the concept of “network” credit unions are to be established. The goal is to help ensure that all credit unions merging into the network credit union may achieve a greater common vision and efficiency in operation; and
  • The recovery of prepayment penalties on member business loans and the recovery of waived third party charges on consumer loans prepaid or terminated within 36 months of origination is permitted.

H 2642 changes Illinois Labor and Storage Lien Acts effective immediately. Those acts enable garages and towing companies that provide labor and material or storage to exercise lien rights against vehicles that are collateral of the credit union. Under the existing law, the garage was not required to notify financial institutions with liens on the vehicle of the assessment and accrual of the fees.

But under the new amendments, repair shops and towing companies are now required to notify any lienholder in writing at the time they begin to assess and accrue storage fees, as well as provide the rate at which fees will accrue. The lienholder must be provided the opportunity to inspect the vehicle to determine if it makes economic sense to retrieve the vehicle.