NAPERVILLE, IL (August 18, 2016) — Once again, the advocacy efforts of the Illinois Credit Union League have resulted in passage of two pieces of legislation that will improve the operational environment for credit unions. These newly enacted bills will enhance the ability of Illinois credit unions to serve their communities and give consumers a viable financial alternative.
With HB 5755, ICUL initiated several technical changes to the Illinois Credit Union Act (“ICUA”). The bill passed both chambers of the General Assembly unanimously and Governor Rauner signed it into law on July 22, 2016. The measure became Public Act 99-0614 and it is effective immediately.
P.A. 99-0614 authorizes a credit union’s board of directors to amend the Articles of Incorporation upon a two-thirds vote by the directors. This change will enable the board to more efficiently address topics that require changes to the Articles of Incorporation, such as field of membership expansions or name changes.
Additionally in the instance of credit union mergers, the act establishes internal corporate governance authorizations, revolving around the concept of “network” credit unions. Utilizing the new provisions may enable the surviving credit union to more effectively integrate the respective memberships and management of the merging credit unions into the surviving credit union. 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. Credit unions may also retain the identity of the merging credit union(s) as a divisional brand of the surviving credit union, reducing any internal or public perception of “winner” and “losers.”
P.A. 99-0614 also permits 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. Finally the measure clarifies that the chief management official of the credit union may hire the credit manager.
Another piece of legislation ICUL initiated on behalf of credit unions was HB 2642. Signed into law by Governor Rauner on August 12, 2016, the bill is now known as Public Act 99-0759 and makes changes to the 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. If an auto repair shop makes repairs to a vehicle and the owner fails to return to retrieve the car, the shop has a possessory lien for the cost of repairs and storage fees. 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.
Stephen Olson, Executive Vice President & General Counsel of the Illinois Credit Union League, said “Thanks to the concerted effort of credit unions in providing the Governor’s staff with excellent examples of storage fee abuse by garages and towing companies in possession of the credit unions’ vehicular collateral, Governor Rauner signed HB 2642.”
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. Payment of the applicable fee may be made by methods other than cash.
Both bills will benefit credit unions operationally and financially. Thanks to the advocacy efforts of the Illinois Credit Union League and the grass roots efforts of Illinois credit unions, passage of the measures will help ensure credit unions continue to remain competitive.
“The passage of both measures is a perfect illustration of the great credit union/ICUL collaborative approach that works so well in Illinois,” said Keith Sias, Senior Vice President, Governmental Affairs for the Illinois Credit Union League. “Government relations is a necessary focal point of credit unions, given the ever escalating array of compliance mandates through new statutes and regulations. Our collaborative approach has proven to be very effective advocacy that benefits all credit unions doing business in Illinois.”
The Illinois Credit Union League (ICUL) is the primary trade association for 212 state and federal credit unions in Illinois. It focuses on providing legislative and regulatory advocacy, compliance assistance and information, and a wide range of educational and training services to those credit unions, who in turn serve approximately 3.4 million members. More information can be found at www.icul.com.
Melissa Vidito
Illinois Credit Union System
630-983-3400
melissa.vidito@envisant.com
