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The Illinois General Assembly (IGA) is still in overtime and credit unions are waiting out the final results of the legislative efforts they put forth this Spring.
The IGA began later than usual this session (on February 6) due to the on-going renovation of the legislative chambers with a scheduled adjournment date of May 31. However, despite democratic control in both chambers, the State’s legislative leaders were not able to find common ground and reach an agreement over the State’s budget prior to the end of the regular session, or in time for the beginning of FY2008, which began on July 1. To prevent a shutdown of essential services, legislators on June 29 approved a temporary budget to allow the State to continue operating during the first month of its new fiscal year. In addition, Governor Blagojevich began calling all legislators into special session on July 5 in order to facilitate the budget process, at a cost to taxpayers of $40,000 per day. Currently, the State is operating without a budget. The main issues surrounding agreement on the budget include funding the State's pension liabilities, funding for education, expansion of gambling, and universal healthcare.
Despite the impasse over the budget, credit unions have realized success in their legislative efforts this Spring. Competing with more than 5,000 bills that were introduced, all three of the League's bills amending the Illinois Credit Union Act passed both chambers. The Credit Union Act initiatives include HB 623 (investment limitations for credit unions are not applicable to credit union employee benefit plan investment options), HB 1288 (credit unions may purchase non-member loans to help control balance sheet/liquidity risk), and HB 352 (credit unions may utilize the option of "one member one vote" for the election of directors). All three measures have been delivered to the Governor for his signature.
In addition, other beneficial measures that are awaiting the Governor’s signature include H.B. 217 (amending the Illinois Vehicle Code), and S.B. 229 (an ICUL and financial services industry coalition-initiated measure to clarify provisions in the Code of Civil Procedure relating to post-judgment remedies to aid parties in their collection activities).
On the regulatory fee litigation front, the League and its co-plaintiffs continue to vigorously prosecute the case. As part of its “dual track” strategy to resolve the fee case via legislative means, they filed H.B. 1526 this session to restore the rate in effect before the 2004 Budget Bill was adopted that led to the pending regulatory fee litigation. H.B. 1526 was patterned after S.B. 2495, the bill filed last year by ICUL in its attempt to resolve the fee case on a legislative basis (that measure passed the Senate last year on a 51-0 vote and received 66 co-sponsors in the House, before being held in the House Rules Committee).
While working to pass H.B. 1526, ICUL conferred with leadership in the House to discuss a “package concept” that would include a 27.5 percent rollback of credit union regulatory fees in exchange for credit union support of new predatory mortgage lending standards, disclosures and restrictions in the Residential Mortgage License Act (credit unions are exempt from the provisions of that Act) recommended by the Attorney General. H.B. 1478 was utilized as a vehicle to implement those criteria, as well as new restrictions in the law pertaining to the foreclosure of mortgages. Based upon arguments presented by the League and its financial institution co-plaintiffs, the foreclosure provisions were deleted. The package also proposed to implement new standards concerning predatory lending database counseling standards derived from H.B 4050 (which became law January 1, 2006, but was then ultimately suspended by the Governor in January 2007).
To implement the “package” concept, S.B. 1674 was subsequently identified as an appropriate vehicle. S.B. 1674 was amended to incorporate the “package” on May 30, 2007, and it passed the full House with a vote of 62-52-2 later that same day. However, it has not been released from Senate Rules for that chamber to concur with the amendments made in the House. The language from S.B. 1674 may be included, in whole or in part, in the FY 2008 Budget Implementation Bill. Should the language from S.B. 1674 pass as part of the budget bill or other legislation signed by the Governor, credit union regulatory fees would return, in full or in part, to their 2003 levels.
As a result of the preliminary injunction issued in favor of the League and its co-plaintiffs in the fee case in March 2005, the fund balances in the three financial institution regulatory fee dedicated funds now exceed $72 million. Settlement discussions with the Attorney General and defendants to address the regulatory fee rate reduction and excess fee credit issues in the case are expected to continue throughout July. In the meantime, the co-plaintiffs are moving forward with discovery in the lawsuit. Watch for future fee litigation updates as events warrant.
 More than 110 credit union officials from throughout Illinois attended ICUL’s 2007 Legislative Day and Reception on March 27, 2007. The opening of the event was highlighted by a keynote address from Illinois State Treasurer Alexi Giannoulias, who discussed the role of credit unions in the financial marketplace. ICUL has been working with Giannoulias since his election last fall and is encouraging credit unions to avail themselves of the extensive series of free training and educational sessions available through the Treasurer’s office. Training topics include homeownership, identity theft, Bank-at-School, investment and asset protection, consumer automotive and a variety of programs for young adults relating to credit and saving. Please click here for more information about the Treasurer’s initiatives.
The program also featured Representatives Joe Lyons (D-Chicago) and Lisa Dugan (D-Kankakee) discussing their experiences as credit union board members and members of the Illinois General Assembly. An update of regulatory issues was presented by Patrick Smith, ICUL Director of Strategic Services, and Con O’Mahoney, ICUL Senior Technical Specialist. Steve Olson, ICUL EVP, General Counsel and COO, updated the group about the Regulatory Fee Litigation. Credit union legislative issues were further discussed by both Steve Olson and Keith Sias, ICUL Director of State Governmental Affairs. After visits to the State Capitol, the event concluded with a reception at the President Abraham Lincoln Hotel.
For more information about significant legislation from the Spring session, please see the Bill Status Chart in this issue. You may also check the League’s Web site for a complete listing of “live” and “dead” bills acted upon and/or monitored by ICUL. Please address any questions to Keith Sias in the Springfield office at 217-744-1800 or Steve Olson in the Naperville office at 630-983-3405.
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