NAPERVILLE, Ill.–For the seventh year in a row, Illinois’ state-chartered credit unions are receiving a regulatory fee credit.
The aggregate amount of the 2016 regulatory fee credit is $783,305, which represents approximately 64% of the total 2016 fourth quarter billing to credit unions for regulatory fees.
The credit is the result of a court case filed by the Illinois Credit Union League in 2004 in response to the escalation of regulatory fees by then Gov. Rod Blagojevich.
“The scheme raised regulatory fees assessed credit unions and banks far in excess of the amount required for their regulatory supervision,” the ICUL noted in a statement. “It then transferred the excess to the general revenue fund to cover unrelated costs of state government.”
Trade groups representing the state’s banks also joined in the litigation, which took four years to negotiate a settlement of the claims and then required legislation to implement the court-approved settlement.
Under the terms of the settlement, Illinois chartered credit unions received a cash payment of more than $6.2 million in June, 2009.
“The legislation implementing the settlement also reduced the Credit Union Fund margin that triggers a credit back to credit unions on their fees and codified a going forward rate reduction in regulatory fees,” the league said.
Those elements are the basis for the regulatory fee credits and rate reduction savings credit unions receive on an annual basis.
“We believe the prosecution and favorable settlement of the regulatory fee case is an excellent example of the value of league affiliation,” said ICUL Executive Vice President, General Counsel and COO Stephen Olson. “We are particularly pleased the settlement terms we negotiated with the State in 2008 continue to provide state-chartered credit unions with a financial benefit.”
The $783,305 credit means credit unions will enjoy a partial, but substantial, fourth quarter fee holiday, according to the ICUL. Additionally, for fiscal year 2016, the rate reduction savings was $931,922.
To date, the settlement has returned over $18.5 million to Illinois credit unions, the league said.
“It was not an easy decision for the league to pursue litigation against the state in 2004, but the financial impact of winning this case has been tremendous for state-chartered credit unions over the past seven years,” said ICUL President Tom Kane. “Without the efforts of the league, Illinois credit unions might still be stuck in a cycle of overpayment and sweeps into the general fund.”