NAPERVILLE, Ill. - Illinois credit unions waiting to learn whatthe next developments are on pending regulatory fee litigation, aregoing to have to continue to be patient. Speaking at the IllinoisCredit Union League's annual meeting April 21-23, Director of StateGovernment Affairs Keith Sias told attendees there has been noaction on the case since Judge Leo Zappa issued an injunction March11 blocking the state from using dedicated funds for credit unionand bank regulation into all-purpose accounts to forestall a statebudget crisis. Sias explained that the state had 30 days to file anappeal, and the League is now waiting for a hearing date to be set."We're waiting for direction from Judge Zappa on the next steps,"said Sias, adding that it's `very typical" for litigation such asthis to take so long because there's a lot of paperwork and motionsthat are filed. Joining the Illinois League in its suit against thestate filed December 2004 were the Illinois League of FinancialInstitutions and the Community Bankers Association of Illinois.According to the League, the suit orders "the State to roll backthe regulatory fee escalation to a level that covers, but does notintentionally exceed, the budgetary costs of regulatory oversight."The suit also "seeks to prohibit the State from raiding thededicated Credit Union Fund and bank funds to pay for unrelatedgeneral operating expenses of the State." Since filing the suit,the Illinois Bankers Association, Illinois Mortgage BankersAssociation, and the Illinois Mortgage Brokers Association havejoined the League as co-plaintiffs. The suit asserts the escalationand sweep actions taken by the State to balance its budget areunconstitutional, a 2005 Legislative Briefing Paper distributed bySias at the League's annual meeting states. At the same briefing,Sias gave attendees an update on the status of legislation directlyaffecting credit unions. S.B. 173 amends several sections of theIllinois Credit Union Act to authorize credit unions to offerhealth savings accounts (HSAs) to qualified CU members; clarifiesthat loan documents can be prepared and executed in electronicformat; explicitly authorizes CUs to make charitable contributions;and establishes authority for the imposition of regulatorypenalties for the unauthorized use of the term "credit union." Themeasure already was unanimously passed by the state Senate March 8by a 56-0 vote and was assigned to the House Financial InstitutionsCommittee April 5. A committee hearing on S.B. 173 was scheduledfor April 27. Sias said there is no opposition to the bill, and heexpects it to pass. The Illinois League is also following two otherbills in the state legislature - H.B. 583, "Unclaimed Property Act"was passed by the state House Feb. 17 and was placed on the SenateCalendar Order of 2nd reading May 3. Lastly, H.B. 947, "VehicleCode" was passed by the House March 16 and assigned to the SenateTransportation Committee April 13. -

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