Illinois Credit Unions Welcome Lower Deposit Insurance Fees | Credit Union Journal


Illinois state-chartered credit unions are getting a much-needed boost in the financial arm in the form of credits applied to their 2021 exam fees.

The credits stem from legislation enacted in 2009 to resolve Illinois Credit Union League disputes. The lawsuit, filed in 2004, alleged that then-governor. Rod Blagojevich was trying to use fees paid to the state’s Credit Union Fund to fill budget shortfalls.

All fees collected by the Department of Financial and Professional Regulation above a 25% spending threshold are returned to the credit unions. These credits have totaled $23 million over the years.

State-chartered credit unions are expected to receive a total of $840,000 in credit in 2021 at a time when many are still dealing with the fallout from the coronavirus crisis.

The credit is a “welcome relief,” said Steven Bugg, president and CEO of Great Lakes Credit Union in Bannockburn, Illinois. Bugg said the billion-dollar credit union plans to allocate some of its credit to digital products and services.

Throughout the COVIS crisis “it became even more apparent that we needed to offer more robust digital services to stay relevant,” Bugg said. He declined to disclose the size of Great Lakes’ credit.

State-chartered credit unions receive an offset credit against total regulatory fees owed to the Illinois Department of Financial and Professional Regulation, said Patrick Smith, senior vice president of regulatory affairs at Illinois Credit. Union League.

The Illinois Credit Union League is the primary trade association of 212 state and federally chartered credit unions.

Although the size of the loan varies depending on the amount paid by an institution in the previous fiscal year, the total amount will be distributed among the 181 state-chartered credit unions.

Each institution should receive a credit equal to 61% of what it would normally pay in regulatory fees, Smith said. For example, a credit union that normally owes $10,000 would only have to pay the Illinois Department of Financial and Professional Regulation approximately $3,900 after credit is applied.

“The formula was designed to maintain a minimum balance in the fund equal to approximately three months of operating expenses,” Smith said. “The credit union section would then have a stamp in the [Credit Union Fund] and not run out of funds before receiving additional quarterly revenue from future regulatory fees collected. »

The state expense credit is unique. A spokesperson for the Credit Union National Association said there were no similar structures in other states.

The 2020 overpayment fee credits will help credit unions return capital to their members, while easing the regulatory burden, said Michael Abraham, president and CEO of First Financial Credit Union, which has with assets of $105 million, in Skokie, Illinois.

“With the impacts of COVID and the large stimulus deposits recently, every little bit counts,” said Abraham, who also declined to disclose the size of his credit union’s credit.

“The timing of credit this year is advantageous,” Abraham added. “I’m all for paying our fair share of the costs of sound regulation, and fee credits serve as a reminder that credit unions and their members will not support a diversion of those funds to cover unnecessary burdens, as the cost of compliance is already high for regulated financial institutions.”


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