The Illinois Credit Union League on Wednesday expressed thanks to Gov. Bruce Rauner for his recent signing into law three bills it said are important to credit unions.
According to the ICUL the three bills, H.B. 1792, H.B. 759, and S.B. 1694: “positively impact credit unions in Illinois and provide them more opportunity to succeed,” the League said in a statement.
H.B. 1792 amends the Illinois Credit Union Act to establish parity with federal law, as well as to make technical amendments the ICUL said will enable credit unions to operate more efficiently.
According to analysis by the Illinois League, this bill contains language that will:
- Assist credit unions in their asset liability management responsibilities by permitting them to invest in investment grade corporate bonds and participation interests in pools of loans, subject to due diligence requirements. “Specific reference to these asset liability management tools will provide credit unions with additional options for making sound investments and guidance within the Act with respect to such investments,” the League said.
- Authorize credit unions to use descriptive and brand references to promote and market their identity, services and products to their members. A credit union must continue to utilize its formal name in official documentation and for legal purposes, however, this provision authorizes the use of a trade name or a name other than the credit union’s official name in advertising and signage and expands a credit union’s options for marketing and the promotion of products to its members.
- Authorize credit union member action by electronic voting, if secure and if approved by the board of directors of the credit union.
- Reduce the par value of a membership share from at least $5.00 to at least $1.00.
H.B. 759, which made amendments to the Illinois Insurance Code, reportedly was passed to resolve ambiguous language in the existing Insurance Code as it relates to the requirement of having an insurance producer’s license in order to solicit and sell group credit insurance policies on member loans.
The Illinois League noted H.B. 759 clarifies that administrative functions to enroll a loan applicant under a group credit insurance policy sold by a licensed producer do not require licensure on the part of the financial institution or its employees.
“This clarifying exemption is consistent with past and ongoing practice by credit unions in Illinois,” the League said.
Vehicle Code amendments
S.B. 1694, which makes amendments to the Vehicle Code, Labor and Storage Lien Act and Labor and Storage Lien (Small Amount) Act, was filed as a trailer bill to H.B. 2642, which was signed into law and became effective in August 2016. The latter measure required a person or business seeking to impose storage fees on a vehicle in its possession to notify the lienholder of record when storage fees begin to accrue. The lienholder notice must state the storage rate, as well as provide the lienholder with an opportunity to inspect its collateral to determine whether it makes economic sense to reclaim it.
“Unfortunately, several instances of non-compliance were reported following the enactment of the original legislation,” the League said.
As a result, ICUL said S.B. 1694 was filed to bring “clarity” to the law, as well as address operational concerns surrounding the notice requirement.
The bill makes it explicitly clear that storage fees may not be collected if the lienholder notice is not sent. In addition, S.B. 1694 requires notice to be sent within two days of vehicle impoundment, and the lienholder must be afforded an opportunity to inspect its collateral within two business days of its request. According to officials, those timeframes help ensure there is no unnecessary delay in the process of notification and potential vehicle retrieval.
The ICUL declared passage of these three bills was “another important success” for Illinois credit unions.
“Illinois credit unions serve approximately 3.4 million consumers in Illinois, and the Illinois Credit Union League’s Advocacy Team is committed to ensuring that a friendly operating environment is maintained for credit unions to serve their members,” the League said.
“With all the burdensome legislation and regulation that is enacted, we are pleased to obtain the passage of initiatives that give credit unions more power and opportunity to succeed,” added Stephen Olson, the League's EVP and general counsel.