Illinois credit unions are getting a $1.4 million payback from their regulator following settlement of a well-publicized 2009 suit against former Gov. Rod Blagojevich in his ill-fated attempt to seize bank/CU examiner fees and move them into the state's general fund.
The Illinois Credit Union League in a statement Wednesday heralded the "welcome boost to the bottom lines" of 290 state-chartered CUs as a result of the return of the moneys.
The CUs, the league said, "received a total holiday on their 2010 4th quarter regulatory fee that would otherwise be due in January to the Illinois Division of Financial Institutions." In addition, the CUs "will also receive a partial holiday on their 2011 first quarter fees to be paid to the regulatory agency in April. In total, an aggregate credit of $1,452,256 will be received by Illinois-chartered credit unions."
The fee holiday, the league explained, was a result of litigation it along with other financial trades pursued to implement the court-approved settlement of the regulatory fee case filed against the state in 2004.
Under the settlement terms, CUs, as well as banks, savings banks and savings & loans received a cash credit in June 2009 representing the overpayment in regulatory fees made under Blagojevich who tried to sharply increase fees and implement a "sweep" of funds into general coffers from 2004-2006. The settlement was signed into law by Gov. Patrick Quinn, effective April 6, 2009.
"The 2009 legislation implementing the settlement also accomplished two other goals," the league said. "It codified a rate reduction in regulatory fees on a going forward basis commencing January 1, 2009 and also reduced the Credit Union Fund margin that triggers a credit back to credit unions."
The Credit Union Fund, the league said, is the dedicated fund into which regulatory fees are deposited to offset the ordinary administrative and operational expenses of the DFI Credit Union Section in supervising state-chartered credit unions. "It is structured as an operating account, not a savings account," the league noted.
"We are particularly pleased the settlement terms we negotiated with the State in 2008 now provide our member credit unions with an additional financial benefit," said Daniel Plauda, ICUL president/CEO."We know it comes at a good time, given the economic and regulatory environment in which our credit unions are operating."