SPRINGFIELD, Ill.–Several pieces of legislation that had the backing of the Illinois Credit Union League have been enacted here.
According to the league, HB 5755 includes several technical changes to the Illinois Credit Union Act that were initiated by the league, and has now become Public Act 99-0614.
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, the ICUL said.
In addition, 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,” said the league. “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…”
Network credit unions have also been given public support by NCUA Chairman Rick Metsger.
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.
Also signed into law has been HB 2642, now known as Public Act 99-0759, which makes changes to the Illinois Labor and Storage Lien Acts effective immediately. According to the league, the 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.
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, the ICUL said.
“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, in a statement. “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.”