SPRINGFIELD, Ill. – The first legal challenge of the state’s raid on credit union funds dedicated to CU regulation as brought by the Illinois Credit Union League is due in a state court here Jan. 18, League attorneys reported last week. The League, joined by two banking trade groups, filed suit here Dec. 14 seeking a declaratory judgment against Governor Rod Blgojevich over his siphoning funds marked for supervision to ease a long-running budget crisis impacting the state. The League and the banking groups have complained supervision and safety and soundness of financial institutions are being dangerously undermined by the so-called “raid” on departmental funds. The League will be seeking a temporary restraining order from Judge Zappa to halt further fund dispersal and invalidate the transfer, said a spokesman. Illinois CUs argue the raid on CU funds is causing huge increases in supervisory fees. The League contends many of the state’s 400 state-chartered CUs last year experienced a 27.5% increase in fees with some of the largest withstanding a 50% jump.

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