205 ILCS 305/30

Current through Public Act 103-1052

Section 205 ILCS 305/30 - Duties of Directors

(a) It shall be the duty of the directors to:

(1) Review actions on applications for membership. A record of the membership committee's approval or denial of membership or management's approval or denial of membership if no membership committee has been appointed shall be available to the board of directors for inspection. A person denied membership by the membership committee or credit union management may appeal the denial to the board;

(2) Provide adequate fidelity bond coverage for officers, employees, directors and committee members, and for losses caused by persons outside of the credit union, subject to rules and regulations promulgated by the Secretary;

(3) Determine from time to time the interest rates, not in excess of that allowed under this Act, which shall be charged on loans to members and to authorize interest refunds, if any, to members from income earned and received in proportion to the interest paid by them on such classes of loans and under such conditions as the board prescribes. The directors may establish different interest rates to be charged on different classes of loans;

(4) Within any limitations set forth in the credit union's bylaws, fix the maximum amount which may be loaned with and without security to a member;

(5) Declare dividends on various classes of shares in the manner and form as provided in the bylaws;

(6) Limit the number of shares which may be owned by a member; such limitations to apply alike to all members;

(7) Have charge of the investment of funds, except that the board of directors may designate an investment committee or any qualified individual or entity to have charge of making investments under policies established by the board of directors;

(8) Authorize the employment of or contracting with such persons or organizations as may be necessary to carry on the operations of the credit union, provided that prior approval is received from the Department before delegating substantially all managerial duties and responsibilities to a credit union organization, and fix the compensation, if any, of the officers and provide for compensation for other employees within policies established by the board of directors;

(9) Authorize the conveyance of property;

(10) Borrow or lend money consistent with the provisions of this Act;

(11) Designate a depository or depositories for the funds of the credit union and supervise the investment of funds;

(12) Suspend or remove, or both, any or all officers or any or all members of the membership, credit, or other committees whenever, in the judgment of the board of directors, the best interests of the credit union will be served thereby; provided that members of the supervisory committee may not be suspended or removed except for failure to perform their duties; and provided that removal of any officer shall be without prejudice to the contract rights, if any, of the person so removed;

(13) Appoint any special committees deemed necessary; and

(14) Perform such other duties as the members may direct, and perform or authorize any action not inconsistent with this Act and not specifically reserved by the bylaws to the members.

(b) The board of directors may delegate to the chief management official, according to guidelines established by the board that may include the authority to further delegate one or more duties, all of the following duties:

(1) determining the interest rates on loans;

(2) determining the dividend rates on share accounts; and

(3) hiring employees other than the chief management official and fixing their compensation.

(c) Each director shall have a working familiarity with basic finance and accounting practices consistent with the size and complexity of the credit union operation they serve, including the ability to read and understand the credit union's balance sheet and income and expense statements and the ability to ask, when appropriate, substantive questions of management and auditors. For the purposes of this subsection (c), substantive questions include queries concerning financial services and products offered to the membership; how those activities generate revenue for the credit union; the credit, liquidity, interest rate, compliance, strategic, transaction, and reputation risks associated with those activities; and the internal control structures maintained by the credit union that limit and manage those risks.

A director who was elected or appointed on or after January 1, 2015 and who comes to the position without the requisite financial skills shall have until 6 months after the date of election or appointment to acquire the enumerated skills.

An incumbent director who was elected or appointed before January 1, 2015 and does not possess the requisite financial skills shall have until July 1, 2015 to acquire the enumerated skills.

An incumbent director or a director who is elected or appointed on or after January 1, 2015 who already understands his or her credit union's financial statements shall not be required to do anything further to satisfy the financial skills requirement set forth in subsection (c).

It is the intent of the Department that all credit union directors possess a basic understanding of their credit union's financial condition. It is not the intent of the Department to subject credit union directors to examiner scrutiny of their financial skills. Rather, the Department shall evaluate whether the credit union has in place a policy to make available to their directors appropriate training to enhance their financial knowledge of the credit union. Directors may receive the training through internal credit union training, external training offered by the credit union's retained auditors, trade associations, vendors, regulatory agencies, or any other sources or on-the-job experience, or a combination of those activities. The training may be received through any medium, including, but not limited to, conferences, workshops, audit closing meetings, seminars, teleconferences, webinars, and other internet based delivery channels.

205 ILCS 305/30

Amended by P.A. 098-0784,§ 5, eff. 7/24/2014.

Amended by P.A. 097-0133,§ 5, eff. 1/1/2012.

Amended by P.A. 095-0098,§ 5, eff. 8/13/2007.

Amended by P.A. 093-0916, § 5, eff. 8/12/2004.

P.A. 84-1390; 92-608, eff. 7-1-02; revised 1-20-03.