NAPERVILLE, Ill. (8/20/13)--Legislation that addresses interpretive issues involving the Illinois Department of Financial and Professional Regulations' (IDFPR) civil penalty process as it relates to credit unions was signed into law Friday by Illinois Gov. Pat Quinn.
HB 1572 will ensure that due process, fairness and objective standards are applied consistently, said the Illinois Credit Union League, which backed the measure.
Passage of the bill--now PA 98-0400--was unanimous through both chambers of the Illinois General Assembly (IGA): on May 22 with a vote of 55 to 0 in the Senate and a vote of 112-0 in the Illinois House on April 11.
The bill amends the Illinois Credit Union Act to ensure the civil penalty assessment process is fundamentally fair and consistently applied. The intent in establishing the process was that civil penalty orders would be reserved for extraordinary circumstances in which the credit union's conduct was egregious and constituted a willful and material disregard of applicable standards. That was the reason for the procedural due process provisions regarding prior notice and an opportunity to cure, the league said.
In the short time since the civil penalty process has been in place, interpretive issues have arisen regarding key operative terms. HB 1572 addresses those issues by adding substantive due process criteria to provide objective standards of materiality and quality assurance and a cure opportunity before any assessment of a civil penalty, the league said.
In consultation with State Rep. Lou Lang (D-16, Skokie), who sponsored the bill in the Illinois House, the league worked with IDFPR Acting Secretary Manny Flores and Division of Financial Institutions Credit Union Supervisor Francisco Menchaca to fully address the concerns of the credit union movement, said the league. As a result, the department, which oversees the banking and credit union divisions that regulate all Illinois-chartered financial institutions, including 271 credit unions, supported the legislation.
"We are very pleased the Illinois General Assembly concurred with the sentiment expressed by Acting Secretary Manny Flores that the issuance of civil penalties should be handled on a consistent and fair basis by all divisions within the department," said Stephen Olson, ICUL general counsel and chief operating officer.