NAPERVILLE, Ill.–For the eighth consecutive year the Illinois Credit Union League is reporting state-chartered credit unions will be receiving a payment from the state as the result of a 2009 court settlement.
The Illinois CU League said the “margin threshold” has again been surpassed for the State’s fiscal year ending June 30, 2017, therefore entitling all Illinois credit unions to an excess over margin regulatory fee credit.
This credit is based upon legislation enacted to implement the court- approved settlement of the regulatory fee case filed by the league against the State and then-Gov. Rod Blagojevich in 2004. Under the terms of the settlement, each credit union received a cash payment in June 2009 (the aggregate amount paid to credit unions was approximately $6.2 million), the league reported.
The case challenged the propriety of the regulatory fee escalation and sweep scheme established by the former governor, in an attempt to balance the budget.
The ICUL noted the 2009 legislation implementing the settlement also accomplished two other goals:
- It codified a rate reduction in regulatory fees on a going forward basis, commencing Jan. 1, 2009 (for 2017, the rate reduction savings was $960,258).
- It reduced the Credit Union Fund margin that triggers a credit back to the credit union. The aggregate amount of the margin credit for is $723,030.62. The credit represents approximately 57% of the total 2017 4th quarter billing to credit unions for regulatory fees. Accordingly, credit unions will enjoy a partial 4th quarter fee holiday.
The amount of each individual credit is determined on a proportionate basis by taking into account the regulatory fee each credit union paid versus the aggregate amount of all fees collected by IDFPR from credit unions.
“It would have been cumbersome and costly for any credit union, no matter how large, to individually pursue a lawsuit against the governor and IDFPR, and then successfully settle it with implementing legislation in the General Assembly,” said ICUL Executive Vice President and General Counsel Stephen Olson in a statement.
He added that the litigation and legislative effort established a regulatory fee structure that avoids the collection of fees far in excess of the amount required for regulatory supervision.
The ICUL said it is particularly pleased to see the settlement terms originally negotiated in 2008 continue to provide state credit unions with a financial benefit (for 2017, the value of the excess over margin credit and rate reduction savings was $1,683,288, and cumulatively to date, the settlement has returned over $20,252,000 to Illinois credit unions).