No Word Yet for Illinois CUs on Regulatory Fee Litigation

NAPERVILLE, Ill. - Illinois credit unions waiting to learn what the next developments are on pending regulatory fee litigation, are going to have to continue to be patient. Speaking at the Illinois Credit Union League's annual meeting April 21-23, Director of State Government Affairs Keith Sias told attendees there has been no action on the case since Judge Leo Zappa issued an injunction March 11 blocking the state from using dedicated funds for credit union and bank regulation into all-purpose accounts to forestall a state budget crisis. Sias explained that the state had 30 days to file an appeal, 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 as this to take so long because there's a lot of paperwork and motions that are filed. Joining the Illinois League in its suit against the state filed December 2004 were the Illinois League of Financial Institutions and the Community Bankers Association of Illinois. According to the League, the suit orders "the State to roll back the regulatory fee escalation to a level that covers, but does not intentionally exceed, the budgetary costs of regulatory oversight." The suit also "seeks to prohibit the State from raiding the dedicated Credit Union Fund and bank funds to pay for unrelated general operating expenses of the State." Since filing the suit, the Illinois Bankers Association, Illinois Mortgage Bankers Association, and the Illinois Mortgage Brokers Association have joined the League as co-plaintiffs. The suit asserts the escalation and sweep actions taken by the State to balance its budget are unconstitutional, a 2005 Legislative Briefing Paper distributed by Sias at the League's annual meeting states. At the same briefing, Sias gave attendees an update on the status of legislation directly affecting credit unions. S.B. 173 amends several sections of the Illinois Credit Union Act to authorize credit unions to offer health savings accounts (HSAs) to qualified CU members; clarifies that loan documents can be prepared and executed in electronic format; explicitly authorizes CUs to make charitable contributions; and establishes authority for the imposition of regulatory penalties for the unauthorized use of the term "credit union." The measure already was unanimously passed by the state Senate March 8 by a 56-0 vote and was assigned to the House Financial Institutions Committee April 5. A committee hearing on S.B. 173 was scheduled for April 27. Sias said there is no opposition to the bill, and he expects it to pass. The Illinois League is also following two other bills in the state legislature - H.B. 583, "Unclaimed Property Act" was passed by the state House Feb. 17 and was placed on the Senate Calendar Order of 2nd reading May 3. Lastly, H.B. 947, "Vehicle Code" was passed by the House March 16 and assigned to the Senate Transportation Committee April 13. -

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