Fourth Quarter 2005
ICUL bills prevail in Springfield
Although this year’s State legislative session did not feature a budget battle or the Illinois General Assembly’s “overtime” session of last year, tension was definitely in the air. Still, ICUL successfully passed legislation to continue a favorable regulatory environment for Illinois credit unions and minimized the passage of measures that were negative in orientation to credit union operations. Here is a summary of selected bills that ICUL initiated and/or actively supported:
|
Bill |
Sponsor |
Synopsis |
ICUL |
Action |
|
HB 583 |
R. Hultgren |
Amends the Uniform Disposition of Unclaimed Property Act to provide that activity on any account with a financial organization is considered activity on all accounts at that financial organization, thereby avoiding any presumption of abandonment. Specifically, excepts from the presumption of abandonment by a financial organization a demand, savings, or matured deposit or a fund paid toward the purchase of withdrawable shares or other interest in a financial organization where the owner has, within 5 years, engaged in the following activity regarding other funds or loan accounts with the financial organization: (i) made a deposit or withdrawal, corresponded in writing or filed a memorandum regarding any account that appears on a consolidated statement with the inactive account; (ii) increased or decreased the amount of funds in any other account the owner has with the financial organization; or (iii) engaged in any other relationship with the financial organization, including payment of any amounts due on a loan. Provides that the exception applies only so long as the mailing address for the owner in the financial organization’s books and records is the same for both the inactive account and for the active account. |
Support |
Signed into law by Governor Blagojevich on July 19, 2005 as Public Act 94-0255 |
|
HB 947 |
J. Hoffman |
Amends the Illinois Vehicle Code to delete the requirement for certain Secretary of State forms in repossession situations where the borrower is in bankruptcy or has received his or her discharge in bankruptcy. In a repossession without assignment of title by the borrower in default (i.e., the lender has repossessed the vehicle, but the borrower has not “signed off” the title), the Vehicle Code requires the issuance of a Notice of Redemption and Affidavit of Defense (and possibly a Notice of Reinstatement if 30 percent of the loan has been paid). The bill fine tunes the interplay of the Vehicle Code, Uniform Commercial Code and Bankruptcy Code to eliminate the need for those documents. If a sale of the repossessed vehicle will occur, the creditor must still furnish the borrower with the sale notices required under the Illinois Uniform Commercial Code. |
Support |
Signed into law by Governor Blagojevich on August 2, 2005 as Public Act 94-0411 |
|
HB 1523 |
S. Mathias |
Amends the Code of Civil Procedure. Increases the allowable amount of the homestead exemption from $7,500 to $15,000 for an individual and from $15,000 to $30,000 for 2 or more individuals. In the Sections concerning personal property exemptions, increases the debtor’s “wild card” exemption from $2,000 to $4,000, the debtor’s equity interest in any one motor vehicle from $1,200 to $2,400, and the value of implements, professional books, or tools of the trade of the debtor from $750 to $1,500. |
Support |
Signed into law by Governor Blagojevich on July 21, 2005 as Public Act 94-0293 |
|
SB 173 |
T. Link |
Amends several sections of the Illinois Credit Union Act to (i) explicitly authorize credit unions to offer health savings accounts (HSAs) to qualified credit union members covered by high deductible health plans to enable those members to utilize pre-tax dollars for medical expenses pursuant to the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (money in the HSA may be deducted whether or not the member itemized deductions, earnings in the HSA grow tax-free and unspent funds may be rolled over from one year to the next); (ii) clarify that loan documents may be prepared and executed in electronic format; (iii) explicitly authorize credit unions to make charitable contributions; and (iv) establish authority for the imposition of regulatory penalties for the unauthorized use of the term “credit union” or abbreviations thereof. |
Support |
Signed into law by Governor Blagojevich on July 8, 2005 as Public Act 94-0150 |
The League also successfully concluded negotiations with the Illinois Division of Financial Institutions, Credit Union Section (DFI), to increase the consumer and real estate loan limits to reflect the escalation in the consumer price index since the last revision to those limits in 1995-1996. During the past year, the League held several meetings with professional staff at DFI and worked closely with the agency in drafting appropriate amendments. DFI published the proposed amendments to the lending rules on March 25, 2005, and the final amendments were published on July 22, 2005 (with an effective date of July 8, 2005). The individual loan limits in all categories have been increased, as follows:
|
Assets |
Consumer Loans |
Maximum Secured by Real Estate |
|
|
Maximum |
Maximum |
||
|
Under $500,000 |
$3,500 |
$25,000* |
Consumer Loan Limit |
|
$500,000 – $1M |
$6,500 |
$31,500* |
Consumer Loan Limit |
|
$1M – $2.5M |
$12,500 |
$50,000 |
$165,000* |
|
$2.5M – $5M |
$12,500 |
$50,000 |
$250,000* |
|
$5M – $10M |
$15,000 |
$62,500 |
$330,000 |
|
$10M – $30M |
$20,000 |
$81,500 |
$580,000 |
|
$30M – $100M |
$25,000 |
$100,000 |
$825,000 |
|
Over $100M |
$40,000 |
$150,000 |
$1,000,000 |
*Total loans to one member may not exceed 10% of a credit union's unimpaired capital
and surplus (sharese plus undivided earnings).