State Codes and Statutes

Statutes > Illinois > Chapter205 > 1180 > 020501050HArt_3


      (205 ILCS 105/Art. 3 heading)
ARTICLE 3. MEMBERSHIP AND MANAGEMENT

    (205 ILCS 105/3‑1) (from Ch. 17, par. 3303‑1)
    Sec. 3‑1. Members. (a) The membership of an association consists of:
    (1) Every depositor, holder of a withdrawable capital account of the association, or one or more withdrawable or permanent reserve shares, issued by the association; and
    (2) Every borrower from the association, as long as his loan remains unpaid and he remains liable to the association for the payment thereof; and every obligor of an investment made by the association under the provisions of the section of this Act concerning Investments in Obligations of Members; each of which members shall be known as a borrowing member.
    (b) Each joint ownership and each joint obligation shall constitute one membership.
(Source: P.A. 84‑543.)

    (205 ILCS 105/3‑2) (from Ch. 17, par. 3303‑2)
    Sec. 3‑2. Members' meetings.
    (a) Each annual meeting of the members shall be held at the time specified in the by‑laws; but the failure to hold an annual meeting at the time so specified shall not work a forfeiture or dissolution of the association. The board of directors, or the holders of not less than 20% of the outstanding permanent reserve shares or of the withdrawal value of all withdrawable capital of the association, or such other person or persons as may be designated by the by‑laws, may call a special meeting of the members. Every annual or special meeting shall be held at the business office of the association, or, if the space therein available for such meeting is inadequate, in such other place within the same county as shall be specifically designated in the notice of such meeting.
    (b) Notice of an annual meeting shall be published once not less than 10 days nor more than 40 days before the date of the meeting and shall be posted in areas of public access at the place of business of the association in a manner to be prescribed by the Commissioner. Such notice shall be prominently and continuously displayed up to and including the day of the meeting beginning not less than 60 days immediately preceding the date of such meeting.
    (c) However, for any special meeting, for any annual meeting which is to consider any proposition the affirmative action on which requires two‑thirds vote as set forth in this Act, or for any proposition to amend the articles of incorporation of the association, the notice shall be by mail, post marked not less than 10 days or more than 40 days before the date of the meeting, and by posting at the association's place of business in a like manner as for an annual meeting, with such posting to commence on the date notice is given. Published or mailed notice shall state the place, day, hour and purpose of the meeting.
    (d) A quorum at any meeting of the members shall consist of the members present in person or represented by proxy, who are entitled to cast a majority of the total number of votes which all members of the association are entitled to cast at such meeting; except that the articles of incorporation may specify some other quorum requirement, but not less than one‑third of such total number of votes. Any meeting, including one at which a quorum is not present, may be adjourned by majority vote to a specified date without further notice.
    (e) Voting at a meeting may be either in person or by proxy executed in writing by the member or shareholder or by his duly authorized attorney‑in‑fact. No proxy shall be valid:
        (1) Unless executed in an instrument separate from
     other forms, documents or papers which pertain to any matter of the association or a member's interest therein. The form of such instrument shall be prescribed by the Commissioner, who shall give due regard to size, color, appearance and distinctiveness;
        (2) For any meeting at which the member who gave it
     is present, provided that notice that the member will himself exercise his voting rights is given in writing prior to the taking of any vote to an official whom the association shall at each meeting identify as having responsibility for such matter and provided further that the validity and duration of such proxy will be otherwise unimpaired;
        (3) Unless the member giving the proxy is told by
     the person to whom it is given, or his agent or representative, that the proxy is optional and the voting rights it represents can be exercised by the member himself; that if it is given it can be cancelled at any time by giving notice in writing at the association's office at least 5 days prior to any meeting, and that meeting alone, at which the member is present and has given written notification of his intent to exercise his voting rights; the provisions of this paragraph shall only be applicable to associations not maintaining insurance of the association's withdrawable capital;
        (4) Unless the member giving the proxy is told by
     the person to whom it is given, or his agent or representative, the name of the individual who will exercise the proxy; that the effect of the proxy will be to entitle the person to whom it is given to use the vote or votes the proxy represents as if it or they were that person's own vote or votes; and that, if the proxy is given to someone representing the management of the association, the effect of the proxy will be to support the policies and procedures of the association's management; the provisions of this paragraph shall only be applicable to associations not maintaining insurance of the association's withdrawable capital; or
        (5) After 11 months from the date of its execution,
     unless otherwise provided in the proxy and unless the member giving the proxy is notified in writing when it will terminate.
    (f) In the determination of all questions requiring ascertainment of the members entitled to vote and of the number of outstanding shares, the following rules shall apply:
        (1) The date of determination shall be as provided
     in the Section of this Act concerning Record Date for Voting, Dividend and Other Purposes;
        (2) Each person holding one or more withdrawable
     share accounts shall have the vote of one share for each $100 of the aggregate withdrawal value of such accounts and shall have the vote of one share for any fraction of $100;
        (3) Each holder of permanent reserve shares shall
     have one vote for each permanent reserve share which he holds;
        (4) Each borrowing member as such shall have the
     vote of one share in addition to any vote which he may have otherwise;
        (5) Shares owned by the association shall not be
     counted or voted; and
        (6) Notwithstanding anything contained in this Act
     to the contrary, an association authorized to issue permanent reserve shares may provide in the association's articles of incorporation that voting rights shall be vested exclusively in permanent reserve shareholders.
(Source: P.A. 89‑355, eff. 8‑17‑95.)

    (205 ILCS 105/3‑3) (from Ch. 17, par. 3303‑3)
    Sec. 3‑3. Record date for voting, dividend and other purposes. For the purpose of determining the holders of shares, capital accounts and membership entitled to notice of or to vote at any meeting of the members, or in order to make a determination of the members, holders or other persons for any other proper purpose, the by‑laws may provide for a record date, not less than 10 days nor more than 40 days before the meeting, or other event or transaction with regard to which the determination is to be made; and such determination shall be made as of the close of business on such record date. If the by‑laws do not provide for a record date, the board of directors may fix such a date for each such determination, within the time stated above; and if the board of directors shall fail to so fix a date, the record date for a meeting shall be the date on which the first notice of meeting is given. Shares or share accounts withdrawn or retired after such record date shall not be voted or counted in determining the number of shares outstanding. This Section shall be applicable to the dividend payments on permanent reserve capital, but dividends on withdrawable capital shall be governed by the Section of this Act concerning Dividends.
(Source: P.A. 84‑543.)

    (205 ILCS 105/3‑4) (from Ch. 17, par. 3303‑4)
    Sec. 3‑4. Directors. The business and affairs of the association shall be exercised by its board of directors, which shall be elected and shall exercise its powers as follows:
    (a) The board of directors shall consist of the number of directors fixed by the by‑laws but shall be not less than 5. At all times at least 2/3 of the directors shall be residents of this State. The majority of the directors shall not be salaried employees of the Association. Except with the written approval of the Commissioner, no member shall be eligible to serve as a director of the association who has been adjudicated a bankrupt or convicted of a criminal offense involving dishonesty or a breach of trust;
    (b) To qualify as a director, a member of the association must in good faith and in his own right, or jointly with his spouse, hold either a withdrawable capital account or permanent reserve shares, or a combination of both, in an amount not less than $150 if the assets of the association do not exceed $1,000,000, not less than $500 if the assets of the association equal or exceed $1,000,000 but are less than $5,000,000, or not less than $1,000 if the assets of the association equal or exceed $5,000,000;
    (c) Unless receiving prior written approval of the Commissioner, which approval shall be granted only after a complete exposition of all relevant facts and information, a director shall cease to be a director if the net equity above share loans of all accounts or shares in the association held by him aggregates less than the necessary qualifying interest for a period in excess of 30 days. No action of the board of directors is invalidated through the participation of such director in such action. If a director becomes ineligible under the terms of this paragraph (c) by reason of the exercise by the association of the right of retirement under either Section 4‑5 or 4‑12, he remains validly in office until the expiration of his term or until he otherwise becomes ineligible, resigns or is removed, whichever occurs first;
    (d) Except as hereinafter provided in this paragraph, directors shall be elected for one year and shall serve until their successors are elected and qualified. If the board of directors of an association consists of 6 or more members, in lieu of electing the membership of the whole board of directors annually, the by‑laws of an association may provide that the directors shall be divided into either 2 or 3 classes, each class to be as nearly equal in number as is possible. The term of office of directors of the first class shall expire at the first annual meeting of the members after their election, that of the second class shall expire at the second annual meeting after their election, and that of the third class, if any, shall expire at the third annual meeting after their election. At each annual meeting after such classification, the number of directors equal to the number of the class whose terms expire at the time of such meeting shall be elected to hold office until the second succeeding annual meeting, if there be 2 classes, or until the third succeeding annual meeting, if there be 3 classes. In all elections of directors, cumulative voting shall be permitted as provided in the Constitution of this State. More than 3 consecutive absences from regular or special meetings of the board of directors by any director, unless excused by resolution of the board of directors, shall automatically constitute a resignation. The Commissioner, in the event the board of directors fails to fill a vacancy, may call a special meeting of the members to elect directors to fill vacancies on the board of any association not having the minimum number of directors required under paragraph (a) of Section 3‑4 of this Act;
    (e) If a vacancy on the board of directors occurs from any cause, the remaining directors may continue the management of the association. Temporary vacancies between meetings of the members may be filled at a regular or special meeting of the board of directors prior to which notice has been given to the effect that a vacancy or vacancies will be filled at such meeting. The term of any such temporary director expires at the next regular or special meeting of the members;
    (f) The board of directors shall hold regular meetings as provided in the by‑laws. Special meetings may be held as provided in the by‑laws, and also upon call by the Commissioner after not less than 12 hours' notice by personal or mail service to each director;
    (g) A majority of the board of directors constitutes a quorum for the transaction of business unless a greater number is required in the by‑laws. The act of the majority of the directors present at a meeting at which a quorum is present is the act of the board of directors, unless the act of a greater number is required by law, the articles of incorporation or the by‑laws;
    (h) The board of directors shall have all powers which are necessary and proper to enable the association to accomplish its purposes;
    (i) The board of directors may adopt or amend by‑laws, but no by‑law is effective until it has been submitted to and approved by the Commissioner as being in conformity with this Act. Each adopted amendment shall be subject to the same inquiry by the Commissioner as the corresponding provision in the original by‑laws of the association except as provided in subsection (j);
    (j) If a by‑law amendment provides for a change in the location of an association's business office or the establishment of an additional office, the Commissioner shall not approve the amendment unless he finds that (1) the capital of the association meets the minimum initial capital requirements for a new office as established by regulation of the Commissioner; (2) notice of the association's proposal has been published at least once both in the community of the proposed new location and in the community of the present location; (3) there are no matters pertaining to the association which are of supervisory concern to the Commissioner; and (4) the communities of the existing offices of the association will be properly and adequately served by the association without undue injury to the adequate availability of local credit and thrift services in those communities. The Commissioner may conduct public hearings to determine his findings prior to his approval or disapproval of the amendment; and he may require, as a condition of his approval, ratification of the amendment by the vote (at a meeting of the members) or the written consent of the members of the association who are entitled to cast a majority of the total number of votes which all members of the association are entitled to cast; and
    (k) Every director has the right at any reasonable time to inspect all books, records, documents of every kind and the physical properties of the association of which he is a director.
(Source: P.A. 86‑137.)

    (205 ILCS 105/3‑5) (from Ch. 17, par. 3303‑5)
    Sec. 3‑5. Waiver of notice. Whenever notice is required to be given under this Act, a waiver thereof in writing signed by the person or persons entitled to said notice shall be deemed equivalent thereto.
(Source: P.A. 84‑543.)

    (205 ILCS 105/3‑6) (from Ch. 17, par. 3303‑6)
    Sec. 3‑6. Officers; Suspension and removal of officers, directors and employees. (a) The officers of an association shall consist of a president, one or more vice presidents, secretary, treasurer and such other officers as the by‑laws shall provide, to be elected by the directors; if the by‑laws so provide, any 2 or more offices may be held by the same person, except that one person shall not hold the offices of president and secretary. The duties and powers of the secretary may be set forth in the by‑laws of the association and may be exercised by any other officer designated by the board of directors.
    (b) The existence of an association shall not terminate by reason of the failure to elect officers at the time mentioned in the by‑laws, and each officer shall hold his office until his successor is elected and qualified.
    (c) Whenever any officer, director or employee of an association or of a holding company operating under this Act is charged in any indictment with the commission of or participation in a crime involving the affairs of any association incorporated under this Act or of a holding company operating under this Act, a federal association or any other financial institution, the Commissioner may, by written notice served upon such officer, director or employee, suspend him from office. Such suspension shall remain in effect (unless such officer, director or employee sooner resigns or is not reappointed or reelected at the expiration of his term of office) until such officer, director or employee is convicted or is adjudged not guilty of such offense or the indictment is dismissed or otherwise disposed of. If such officer, director, or employee is convicted of such offense, he shall thereupon cease to be an officer, director, or employee of such association; but if he is found not guilty, his suspension shall automatically be terminated. The Commissioner may request the Attorney General to file an action on his behalf to enforce any order made under this subsection.
    (d) The board of directors shall designate and determine the management structure of the association and elect or appoint all officers. Each of the officers elected or appointed by the board of directors shall serve at the pleasure of the board of directors or pursuant to a written employment contract between the officer and the association.
    (e) Whenever the Commissioner determines that any officer, director or employee of an association or a holding company operating under this Act has committed a violation of any law, rule, regulation or order of the Commissioner, and that such violation or continued violation may result in a substantial financial loss or other substantial damage to the association or holding company or that the interests of its members may be seriously prejudiced by such violation or continued violation, the Commissioner shall notify such officer, director or employee of his intention to issue an order and may thereafter issue an order suspending such person from office or prohibiting his participation in the conduct of the affairs of the association or holding company, or both. The notice to such person shall contain a statement of facts constituting the grounds for such order; shall fix a time when such order will be issued; and shall state the effective date of such order, which shall be not less than 10 days after the date of the order. A copy of such notice and order shall be sent to the association or holding company. Such order shall be and remain in effect from the effective date specified in the notice provided for under this Section until such time as the order is removed by the Commissioner or until the order is removed, modified or stayed pursuant to the Administrative Review Law.
    (f) Officers and directors of any entity operating under this Act shall also disclose to the Commissioner any and all criminal proceedings in which they have been a party or participated which resulted in a grant of immunity from prosecution, a conviction, a plea of nolo contendere or its equivalent, or which are currently pending.
(Source: P.A. 86‑137.)

    (205 ILCS 105/3‑7) (from Ch. 17, par. 3303‑7)
    Sec. 3‑7. Bonds of officers and employees. (a) Every person appointed or elected to any position requiring the receipt, payment, management or use of money belonging to an association, or whose duties permit him to have access to or custody of any of its money or securities or whose duties permit him regularly to make entries in the books or other records of the association, before assuming his duties shall become bonded in some trust or company authorized to issue bonds in this state, or in a fidelity insurance company licensed to do business in this State. Each such bond shall be on a form or forms as the Commissioner shall require and in such amount as the board of directors shall fix and approve. Each such bond, payable to the association, shall be an indemnity for any loss the association may sustain in money or other property through any dishonest or criminal act or omission by any person required to be bonded, committed either alone or in concert with others. Such bond shall be in the form and amount prescribed by the Commissioner, who may at any time require one or more additional bonds. A true copy of every bond, including all riders and endorsements executed subsequent to the effective date of the bond, shall be filed at all times with the Commissioner. Each bond shall provide that a cancellation thereof either by the surety or by the insured shall not become effective unless and until 30 days notice in writing first shall have been given to the Commissioner, unless he shall have approved such cancellation earlier.
    (b) Nothing contained herein shall preclude the Commissioner from proceeding against an association as provided in this Act should he believe that it is being conducted in an unsafe manner in that the form or amount of bonds so fixed and approved by the board of directors is inadequate to give reasonable protection to the association.
(Source: P.A. 85‑1271.)

    (205 ILCS 105/3‑8)(from Ch. 17, par. 3303‑8)
    Sec. 3‑8. Access to books and records; communication with members.
    (a) Every member or holder of capital shall have the right to inspect the books and records of the association that pertain to his account. Otherwise, the right of inspection and examination of the books and records shall be limited as provided in this Act, and no other person shall have access to the books and records or shall be entitled to a list of the members.
    (b) For the purpose of this Section, the term "financial records" means any original, any copy, or any summary of (i) a document granting signature authority over a deposit or account; (ii) a statement, ledger card, or other record on any deposit or account that shows each transaction in or with respect to that account; (iii) a check, draft, or money order drawn on an association or issued and payable by an association; or (iv) any other item containing information pertaining to any relationship established in the ordinary course of an association's business between an association and its customer, including financial statements or other financial information provided by the member or holder of capital.
    (c) This Section does not prohibit:
        (1) The preparation, examination, handling, or
     maintenance of any financial records by any officer, employee, or agent of an association having custody of those records or the examination of those records by a certified public accountant engaged by the association to perform an independent audit.
        (2) The examination of any financial records by, or
     the furnishing of financial records by an association to, any officer, employee, or agent of the Commissioner of Banks and Real Estate or federal depository institution regulator for use solely in the exercise of his duties as an officer, employee, or agent.
        (3) The publication of data furnished from financial
     records relating to members or holders of capital where the data cannot be identified to any particular member, holder of capital, or account.
        (4) The making of reports or returns required under
     Chapter 61 of the Internal Revenue Code of 1986.
        (5) Furnishing information concerning the dishonor
     of any negotiable instrument permitted to be disclosed under the Uniform Commercial Code.
        (6) The exchange in the regular course of business
     of (i) credit information between an association and other associations or financial institutions or commercial enterprises, directly or through a consumer reporting agency or (ii) financial records or information derived from financial records between an association and other associations or financial institutions or commercial enterprises for the purpose of conducting due diligence pursuant to a purchase or sale involving the association or assets or liabilities of the association.
        (7) The furnishing of information to the appropriate
     law enforcement authorities where the association reasonably believes it has been the victim of a crime.
        (8) The furnishing of information pursuant to the
     Uniform Disposition of Unclaimed Property Act.
        (9) The furnishing of information pursuant to the
     Illinois Income Tax Act and the Illinois Estate and Generation‑Skipping Transfer Tax Act.
        (10) The furnishing of information pursuant to the
     federal "Currency and Foreign Transactions Reporting Act", (Title 31, United States Code, Section 1051 et seq.).
        (11) The furnishing of information pursuant to any
     other statute that by its terms or by regulations promulgated thereunder requires the disclosure of financial records other than by subpoena, summons, warrant, or court order.
        (12) The exchange of information between an
     association and an affiliate of the association; as used in this item, "affiliate" includes any company, partnership, or organization that controls, is controlled by, or is under common control with an association.
        (13) The furnishing of information in accordance
     with the federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996. Any association governed by this Act shall enter into an agreement for data exchanges with a State agency provided the State agency pays to the association a reasonable fee not to exceed its actual cost incurred. An association providing information in accordance with this item shall not be liable to any account holder or other person for any disclosure of information to a State agency, for encumbering or surrendering any assets held by the association in response to a lien or order to withhold and deliver issued by a State agency, or for any other action taken pursuant to this item, including individual or mechanical errors, provided the action does not constitute gross negligence or willful misconduct. An association shall have no obligation to hold, encumber, or surrender assets until it has been served with a subpoena, summons, warrant, court or administrative order, lien, or levy.
        (14) The furnishing of information to law
     enforcement authorities, the Illinois Department on Aging and its regional administrative and provider agencies, the Department of Human Services Office of Inspector General, or public guardians: (i) upon subpoena by the investigatory entity or the guardian, or (ii) if there is suspicion by the association that a customer who is an elderly or disabled person has been or may become the victim of financial exploitation. For the purposes of this item (14), the term: (i) "elderly person" means a person who is 60 or more years of age, (ii) "disabled person" means a person who has or reasonably appears to the association to have a physical or mental disability that impairs his or her ability to seek or obtain protection from or prevent financial exploitation, and (iii) "financial exploitation" means tortious or illegal use of the assets or resources of an elderly or disabled person, and includes, without limitation, misappropriation of the elderly or disabled person's assets or resources by undue influence, breach of fiduciary relationship, intimidation, fraud, deception, extortion, or the use of assets or resources in any manner contrary to law. An association or person furnishing information pursuant to this item (14) shall be entitled to the same rights and protections as a person furnishing information under the Elder Abuse and Neglect Act, the Illinois Domestic Violence Act of 1986, and the Abuse of Adults with Disabilities Intervention Act.
        (15) The disclosure of financial records or
     information as necessary to effect, administer, or enforce a transaction requested or authorized by the member or holder of capital, or in connection with:
            (A) servicing or processing a financial product
         or service requested or authorized by the member or holder of capital;
            (B) maintaining or servicing an account of a
         member or holder of capital with the association; or
            (C) a proposed or actual securitization or
         secondary market sale (including sales of servicing rights) related to a transaction of a member or holder of capital.
        Nothing in this item (15), however, authorizes the
     sale of the financial records or information of a member or holder of capital without the consent of the member or holder of capital.
        (16) The disclosure of financial records or
     information as necessary to protect against or prevent actual or potential fraud, unauthorized transactions, claims, or other liability.
        (17)(a) The disclosure of financial records or
     information related to a private label credit program between a financial institution and a private label party in connection with that private label credit program. Such information is limited to outstanding balance, available credit, payment and performance and account history, product references, purchase information, and information related to the identity of the customer.
        (b)(l) For purposes of this paragraph (17) of
     subsection (c) of Section 3‑8, a "private label credit program" means a credit program involving a financial institution and a private label party that is used by a customer of the financial institution and the private label party primarily for payment for goods or services sold, manufactured, or distributed by a private label party.
        (2) For purposes of this paragraph (17) of
     subsection (c) of Section 3‑8, a "private label party" means, with respect to a private label credit program, any of the following: a retailer, a merchant, a manufacturer, a trade group, or any such person's affiliate, subsidiary, member, agent, or service provider.
    (d) An association may not disclose to any person, except to the member or holder of capital or his duly authorized agent, any financial records relating to that member or holder of capital of that association unless:
        (1) The member or holder of capital has authorized
     disclosure to the person; or
        (2) The financial records are disclosed in response
     to a lawful subpoena, summons, warrant, citation to discover assets, or court order that meets the requirements of subsection (e) of this Section.
    (e) An association shall disclose financial records under subsection (d) of this Section pursuant to a lawful subpoena, summons, warrant, citation to discover assets,

State Codes and Statutes

Statutes > Illinois > Chapter205 > 1180 > 020501050HArt_3


      (205 ILCS 105/Art. 3 heading)
ARTICLE 3. MEMBERSHIP AND MANAGEMENT

    (205 ILCS 105/3‑1) (from Ch. 17, par. 3303‑1)
    Sec. 3‑1. Members. (a) The membership of an association consists of:
    (1) Every depositor, holder of a withdrawable capital account of the association, or one or more withdrawable or permanent reserve shares, issued by the association; and
    (2) Every borrower from the association, as long as his loan remains unpaid and he remains liable to the association for the payment thereof; and every obligor of an investment made by the association under the provisions of the section of this Act concerning Investments in Obligations of Members; each of which members shall be known as a borrowing member.
    (b) Each joint ownership and each joint obligation shall constitute one membership.
(Source: P.A. 84‑543.)

    (205 ILCS 105/3‑2) (from Ch. 17, par. 3303‑2)
    Sec. 3‑2. Members' meetings.
    (a) Each annual meeting of the members shall be held at the time specified in the by‑laws; but the failure to hold an annual meeting at the time so specified shall not work a forfeiture or dissolution of the association. The board of directors, or the holders of not less than 20% of the outstanding permanent reserve shares or of the withdrawal value of all withdrawable capital of the association, or such other person or persons as may be designated by the by‑laws, may call a special meeting of the members. Every annual or special meeting shall be held at the business office of the association, or, if the space therein available for such meeting is inadequate, in such other place within the same county as shall be specifically designated in the notice of such meeting.
    (b) Notice of an annual meeting shall be published once not less than 10 days nor more than 40 days before the date of the meeting and shall be posted in areas of public access at the place of business of the association in a manner to be prescribed by the Commissioner. Such notice shall be prominently and continuously displayed up to and including the day of the meeting beginning not less than 60 days immediately preceding the date of such meeting.
    (c) However, for any special meeting, for any annual meeting which is to consider any proposition the affirmative action on which requires two‑thirds vote as set forth in this Act, or for any proposition to amend the articles of incorporation of the association, the notice shall be by mail, post marked not less than 10 days or more than 40 days before the date of the meeting, and by posting at the association's place of business in a like manner as for an annual meeting, with such posting to commence on the date notice is given. Published or mailed notice shall state the place, day, hour and purpose of the meeting.
    (d) A quorum at any meeting of the members shall consist of the members present in person or represented by proxy, who are entitled to cast a majority of the total number of votes which all members of the association are entitled to cast at such meeting; except that the articles of incorporation may specify some other quorum requirement, but not less than one‑third of such total number of votes. Any meeting, including one at which a quorum is not present, may be adjourned by majority vote to a specified date without further notice.
    (e) Voting at a meeting may be either in person or by proxy executed in writing by the member or shareholder or by his duly authorized attorney‑in‑fact. No proxy shall be valid:
        (1) Unless executed in an instrument separate from
     other forms, documents or papers which pertain to any matter of the association or a member's interest therein. The form of such instrument shall be prescribed by the Commissioner, who shall give due regard to size, color, appearance and distinctiveness;
        (2) For any meeting at which the member who gave it
     is present, provided that notice that the member will himself exercise his voting rights is given in writing prior to the taking of any vote to an official whom the association shall at each meeting identify as having responsibility for such matter and provided further that the validity and duration of such proxy will be otherwise unimpaired;
        (3) Unless the member giving the proxy is told by
     the person to whom it is given, or his agent or representative, that the proxy is optional and the voting rights it represents can be exercised by the member himself; that if it is given it can be cancelled at any time by giving notice in writing at the association's office at least 5 days prior to any meeting, and that meeting alone, at which the member is present and has given written notification of his intent to exercise his voting rights; the provisions of this paragraph shall only be applicable to associations not maintaining insurance of the association's withdrawable capital;
        (4) Unless the member giving the proxy is told by
     the person to whom it is given, or his agent or representative, the name of the individual who will exercise the proxy; that the effect of the proxy will be to entitle the person to whom it is given to use the vote or votes the proxy represents as if it or they were that person's own vote or votes; and that, if the proxy is given to someone representing the management of the association, the effect of the proxy will be to support the policies and procedures of the association's management; the provisions of this paragraph shall only be applicable to associations not maintaining insurance of the association's withdrawable capital; or
        (5) After 11 months from the date of its execution,
     unless otherwise provided in the proxy and unless the member giving the proxy is notified in writing when it will terminate.
    (f) In the determination of all questions requiring ascertainment of the members entitled to vote and of the number of outstanding shares, the following rules shall apply:
        (1) The date of determination shall be as provided
     in the Section of this Act concerning Record Date for Voting, Dividend and Other Purposes;
        (2) Each person holding one or more withdrawable
     share accounts shall have the vote of one share for each $100 of the aggregate withdrawal value of such accounts and shall have the vote of one share for any fraction of $100;
        (3) Each holder of permanent reserve shares shall
     have one vote for each permanent reserve share which he holds;
        (4) Each borrowing member as such shall have the
     vote of one share in addition to any vote which he may have otherwise;
        (5) Shares owned by the association shall not be
     counted or voted; and
        (6) Notwithstanding anything contained in this Act
     to the contrary, an association authorized to issue permanent reserve shares may provide in the association's articles of incorporation that voting rights shall be vested exclusively in permanent reserve shareholders.
(Source: P.A. 89‑355, eff. 8‑17‑95.)

    (205 ILCS 105/3‑3) (from Ch. 17, par. 3303‑3)
    Sec. 3‑3. Record date for voting, dividend and other purposes. For the purpose of determining the holders of shares, capital accounts and membership entitled to notice of or to vote at any meeting of the members, or in order to make a determination of the members, holders or other persons for any other proper purpose, the by‑laws may provide for a record date, not less than 10 days nor more than 40 days before the meeting, or other event or transaction with regard to which the determination is to be made; and such determination shall be made as of the close of business on such record date. If the by‑laws do not provide for a record date, the board of directors may fix such a date for each such determination, within the time stated above; and if the board of directors shall fail to so fix a date, the record date for a meeting shall be the date on which the first notice of meeting is given. Shares or share accounts withdrawn or retired after such record date shall not be voted or counted in determining the number of shares outstanding. This Section shall be applicable to the dividend payments on permanent reserve capital, but dividends on withdrawable capital shall be governed by the Section of this Act concerning Dividends.
(Source: P.A. 84‑543.)

    (205 ILCS 105/3‑4) (from Ch. 17, par. 3303‑4)
    Sec. 3‑4. Directors. The business and affairs of the association shall be exercised by its board of directors, which shall be elected and shall exercise its powers as follows:
    (a) The board of directors shall consist of the number of directors fixed by the by‑laws but shall be not less than 5. At all times at least 2/3 of the directors shall be residents of this State. The majority of the directors shall not be salaried employees of the Association. Except with the written approval of the Commissioner, no member shall be eligible to serve as a director of the association who has been adjudicated a bankrupt or convicted of a criminal offense involving dishonesty or a breach of trust;
    (b) To qualify as a director, a member of the association must in good faith and in his own right, or jointly with his spouse, hold either a withdrawable capital account or permanent reserve shares, or a combination of both, in an amount not less than $150 if the assets of the association do not exceed $1,000,000, not less than $500 if the assets of the association equal or exceed $1,000,000 but are less than $5,000,000, or not less than $1,000 if the assets of the association equal or exceed $5,000,000;
    (c) Unless receiving prior written approval of the Commissioner, which approval shall be granted only after a complete exposition of all relevant facts and information, a director shall cease to be a director if the net equity above share loans of all accounts or shares in the association held by him aggregates less than the necessary qualifying interest for a period in excess of 30 days. No action of the board of directors is invalidated through the participation of such director in such action. If a director becomes ineligible under the terms of this paragraph (c) by reason of the exercise by the association of the right of retirement under either Section 4‑5 or 4‑12, he remains validly in office until the expiration of his term or until he otherwise becomes ineligible, resigns or is removed, whichever occurs first;
    (d) Except as hereinafter provided in this paragraph, directors shall be elected for one year and shall serve until their successors are elected and qualified. If the board of directors of an association consists of 6 or more members, in lieu of electing the membership of the whole board of directors annually, the by‑laws of an association may provide that the directors shall be divided into either 2 or 3 classes, each class to be as nearly equal in number as is possible. The term of office of directors of the first class shall expire at the first annual meeting of the members after their election, that of the second class shall expire at the second annual meeting after their election, and that of the third class, if any, shall expire at the third annual meeting after their election. At each annual meeting after such classification, the number of directors equal to the number of the class whose terms expire at the time of such meeting shall be elected to hold office until the second succeeding annual meeting, if there be 2 classes, or until the third succeeding annual meeting, if there be 3 classes. In all elections of directors, cumulative voting shall be permitted as provided in the Constitution of this State. More than 3 consecutive absences from regular or special meetings of the board of directors by any director, unless excused by resolution of the board of directors, shall automatically constitute a resignation. The Commissioner, in the event the board of directors fails to fill a vacancy, may call a special meeting of the members to elect directors to fill vacancies on the board of any association not having the minimum number of directors required under paragraph (a) of Section 3‑4 of this Act;
    (e) If a vacancy on the board of directors occurs from any cause, the remaining directors may continue the management of the association. Temporary vacancies between meetings of the members may be filled at a regular or special meeting of the board of directors prior to which notice has been given to the effect that a vacancy or vacancies will be filled at such meeting. The term of any such temporary director expires at the next regular or special meeting of the members;
    (f) The board of directors shall hold regular meetings as provided in the by‑laws. Special meetings may be held as provided in the by‑laws, and also upon call by the Commissioner after not less than 12 hours' notice by personal or mail service to each director;
    (g) A majority of the board of directors constitutes a quorum for the transaction of business unless a greater number is required in the by‑laws. The act of the majority of the directors present at a meeting at which a quorum is present is the act of the board of directors, unless the act of a greater number is required by law, the articles of incorporation or the by‑laws;
    (h) The board of directors shall have all powers which are necessary and proper to enable the association to accomplish its purposes;
    (i) The board of directors may adopt or amend by‑laws, but no by‑law is effective until it has been submitted to and approved by the Commissioner as being in conformity with this Act. Each adopted amendment shall be subject to the same inquiry by the Commissioner as the corresponding provision in the original by‑laws of the association except as provided in subsection (j);
    (j) If a by‑law amendment provides for a change in the location of an association's business office or the establishment of an additional office, the Commissioner shall not approve the amendment unless he finds that (1) the capital of the association meets the minimum initial capital requirements for a new office as established by regulation of the Commissioner; (2) notice of the association's proposal has been published at least once both in the community of the proposed new location and in the community of the present location; (3) there are no matters pertaining to the association which are of supervisory concern to the Commissioner; and (4) the communities of the existing offices of the association will be properly and adequately served by the association without undue injury to the adequate availability of local credit and thrift services in those communities. The Commissioner may conduct public hearings to determine his findings prior to his approval or disapproval of the amendment; and he may require, as a condition of his approval, ratification of the amendment by the vote (at a meeting of the members) or the written consent of the members of the association who are entitled to cast a majority of the total number of votes which all members of the association are entitled to cast; and
    (k) Every director has the right at any reasonable time to inspect all books, records, documents of every kind and the physical properties of the association of which he is a director.
(Source: P.A. 86‑137.)

    (205 ILCS 105/3‑5) (from Ch. 17, par. 3303‑5)
    Sec. 3‑5. Waiver of notice. Whenever notice is required to be given under this Act, a waiver thereof in writing signed by the person or persons entitled to said notice shall be deemed equivalent thereto.
(Source: P.A. 84‑543.)

    (205 ILCS 105/3‑6) (from Ch. 17, par. 3303‑6)
    Sec. 3‑6. Officers; Suspension and removal of officers, directors and employees. (a) The officers of an association shall consist of a president, one or more vice presidents, secretary, treasurer and such other officers as the by‑laws shall provide, to be elected by the directors; if the by‑laws so provide, any 2 or more offices may be held by the same person, except that one person shall not hold the offices of president and secretary. The duties and powers of the secretary may be set forth in the by‑laws of the association and may be exercised by any other officer designated by the board of directors.
    (b) The existence of an association shall not terminate by reason of the failure to elect officers at the time mentioned in the by‑laws, and each officer shall hold his office until his successor is elected and qualified.
    (c) Whenever any officer, director or employee of an association or of a holding company operating under this Act is charged in any indictment with the commission of or participation in a crime involving the affairs of any association incorporated under this Act or of a holding company operating under this Act, a federal association or any other financial institution, the Commissioner may, by written notice served upon such officer, director or employee, suspend him from office. Such suspension shall remain in effect (unless such officer, director or employee sooner resigns or is not reappointed or reelected at the expiration of his term of office) until such officer, director or employee is convicted or is adjudged not guilty of such offense or the indictment is dismissed or otherwise disposed of. If such officer, director, or employee is convicted of such offense, he shall thereupon cease to be an officer, director, or employee of such association; but if he is found not guilty, his suspension shall automatically be terminated. The Commissioner may request the Attorney General to file an action on his behalf to enforce any order made under this subsection.
    (d) The board of directors shall designate and determine the management structure of the association and elect or appoint all officers. Each of the officers elected or appointed by the board of directors shall serve at the pleasure of the board of directors or pursuant to a written employment contract between the officer and the association.
    (e) Whenever the Commissioner determines that any officer, director or employee of an association or a holding company operating under this Act has committed a violation of any law, rule, regulation or order of the Commissioner, and that such violation or continued violation may result in a substantial financial loss or other substantial damage to the association or holding company or that the interests of its members may be seriously prejudiced by such violation or continued violation, the Commissioner shall notify such officer, director or employee of his intention to issue an order and may thereafter issue an order suspending such person from office or prohibiting his participation in the conduct of the affairs of the association or holding company, or both. The notice to such person shall contain a statement of facts constituting the grounds for such order; shall fix a time when such order will be issued; and shall state the effective date of such order, which shall be not less than 10 days after the date of the order. A copy of such notice and order shall be sent to the association or holding company. Such order shall be and remain in effect from the effective date specified in the notice provided for under this Section until such time as the order is removed by the Commissioner or until the order is removed, modified or stayed pursuant to the Administrative Review Law.
    (f) Officers and directors of any entity operating under this Act shall also disclose to the Commissioner any and all criminal proceedings in which they have been a party or participated which resulted in a grant of immunity from prosecution, a conviction, a plea of nolo contendere or its equivalent, or which are currently pending.
(Source: P.A. 86‑137.)

    (205 ILCS 105/3‑7) (from Ch. 17, par. 3303‑7)
    Sec. 3‑7. Bonds of officers and employees. (a) Every person appointed or elected to any position requiring the receipt, payment, management or use of money belonging to an association, or whose duties permit him to have access to or custody of any of its money or securities or whose duties permit him regularly to make entries in the books or other records of the association, before assuming his duties shall become bonded in some trust or company authorized to issue bonds in this state, or in a fidelity insurance company licensed to do business in this State. Each such bond shall be on a form or forms as the Commissioner shall require and in such amount as the board of directors shall fix and approve. Each such bond, payable to the association, shall be an indemnity for any loss the association may sustain in money or other property through any dishonest or criminal act or omission by any person required to be bonded, committed either alone or in concert with others. Such bond shall be in the form and amount prescribed by the Commissioner, who may at any time require one or more additional bonds. A true copy of every bond, including all riders and endorsements executed subsequent to the effective date of the bond, shall be filed at all times with the Commissioner. Each bond shall provide that a cancellation thereof either by the surety or by the insured shall not become effective unless and until 30 days notice in writing first shall have been given to the Commissioner, unless he shall have approved such cancellation earlier.
    (b) Nothing contained herein shall preclude the Commissioner from proceeding against an association as provided in this Act should he believe that it is being conducted in an unsafe manner in that the form or amount of bonds so fixed and approved by the board of directors is inadequate to give reasonable protection to the association.
(Source: P.A. 85‑1271.)

    (205 ILCS 105/3‑8)(from Ch. 17, par. 3303‑8)
    Sec. 3‑8. Access to books and records; communication with members.
    (a) Every member or holder of capital shall have the right to inspect the books and records of the association that pertain to his account. Otherwise, the right of inspection and examination of the books and records shall be limited as provided in this Act, and no other person shall have access to the books and records or shall be entitled to a list of the members.
    (b) For the purpose of this Section, the term "financial records" means any original, any copy, or any summary of (i) a document granting signature authority over a deposit or account; (ii) a statement, ledger card, or other record on any deposit or account that shows each transaction in or with respect to that account; (iii) a check, draft, or money order drawn on an association or issued and payable by an association; or (iv) any other item containing information pertaining to any relationship established in the ordinary course of an association's business between an association and its customer, including financial statements or other financial information provided by the member or holder of capital.
    (c) This Section does not prohibit:
        (1) The preparation, examination, handling, or
     maintenance of any financial records by any officer, employee, or agent of an association having custody of those records or the examination of those records by a certified public accountant engaged by the association to perform an independent audit.
        (2) The examination of any financial records by, or
     the furnishing of financial records by an association to, any officer, employee, or agent of the Commissioner of Banks and Real Estate or federal depository institution regulator for use solely in the exercise of his duties as an officer, employee, or agent.
        (3) The publication of data furnished from financial
     records relating to members or holders of capital where the data cannot be identified to any particular member, holder of capital, or account.
        (4) The making of reports or returns required under
     Chapter 61 of the Internal Revenue Code of 1986.
        (5) Furnishing information concerning the dishonor
     of any negotiable instrument permitted to be disclosed under the Uniform Commercial Code.
        (6) The exchange in the regular course of business
     of (i) credit information between an association and other associations or financial institutions or commercial enterprises, directly or through a consumer reporting agency or (ii) financial records or information derived from financial records between an association and other associations or financial institutions or commercial enterprises for the purpose of conducting due diligence pursuant to a purchase or sale involving the association or assets or liabilities of the association.
        (7) The furnishing of information to the appropriate
     law enforcement authorities where the association reasonably believes it has been the victim of a crime.
        (8) The furnishing of information pursuant to the
     Uniform Disposition of Unclaimed Property Act.
        (9) The furnishing of information pursuant to the
     Illinois Income Tax Act and the Illinois Estate and Generation‑Skipping Transfer Tax Act.
        (10) The furnishing of information pursuant to the
     federal "Currency and Foreign Transactions Reporting Act", (Title 31, United States Code, Section 1051 et seq.).
        (11) The furnishing of information pursuant to any
     other statute that by its terms or by regulations promulgated thereunder requires the disclosure of financial records other than by subpoena, summons, warrant, or court order.
        (12) The exchange of information between an
     association and an affiliate of the association; as used in this item, "affiliate" includes any company, partnership, or organization that controls, is controlled by, or is under common control with an association.
        (13) The furnishing of information in accordance
     with the federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996. Any association governed by this Act shall enter into an agreement for data exchanges with a State agency provided the State agency pays to the association a reasonable fee not to exceed its actual cost incurred. An association providing information in accordance with this item shall not be liable to any account holder or other person for any disclosure of information to a State agency, for encumbering or surrendering any assets held by the association in response to a lien or order to withhold and deliver issued by a State agency, or for any other action taken pursuant to this item, including individual or mechanical errors, provided the action does not constitute gross negligence or willful misconduct. An association shall have no obligation to hold, encumber, or surrender assets until it has been served with a subpoena, summons, warrant, court or administrative order, lien, or levy.
        (14) The furnishing of information to law
     enforcement authorities, the Illinois Department on Aging and its regional administrative and provider agencies, the Department of Human Services Office of Inspector General, or public guardians: (i) upon subpoena by the investigatory entity or the guardian, or (ii) if there is suspicion by the association that a customer who is an elderly or disabled person has been or may become the victim of financial exploitation. For the purposes of this item (14), the term: (i) "elderly person" means a person who is 60 or more years of age, (ii) "disabled person" means a person who has or reasonably appears to the association to have a physical or mental disability that impairs his or her ability to seek or obtain protection from or prevent financial exploitation, and (iii) "financial exploitation" means tortious or illegal use of the assets or resources of an elderly or disabled person, and includes, without limitation, misappropriation of the elderly or disabled person's assets or resources by undue influence, breach of fiduciary relationship, intimidation, fraud, deception, extortion, or the use of assets or resources in any manner contrary to law. An association or person furnishing information pursuant to this item (14) shall be entitled to the same rights and protections as a person furnishing information under the Elder Abuse and Neglect Act, the Illinois Domestic Violence Act of 1986, and the Abuse of Adults with Disabilities Intervention Act.
        (15) The disclosure of financial records or
     information as necessary to effect, administer, or enforce a transaction requested or authorized by the member or holder of capital, or in connection with:
            (A) servicing or processing a financial product
         or service requested or authorized by the member or holder of capital;
            (B) maintaining or servicing an account of a
         member or holder of capital with the association; or
            (C) a proposed or actual securitization or
         secondary market sale (including sales of servicing rights) related to a transaction of a member or holder of capital.
        Nothing in this item (15), however, authorizes the
     sale of the financial records or information of a member or holder of capital without the consent of the member or holder of capital.
        (16) The disclosure of financial records or
     information as necessary to protect against or prevent actual or potential fraud, unauthorized transactions, claims, or other liability.
        (17)(a) The disclosure of financial records or
     information related to a private label credit program between a financial institution and a private label party in connection with that private label credit program. Such information is limited to outstanding balance, available credit, payment and performance and account history, product references, purchase information, and information related to the identity of the customer.
        (b)(l) For purposes of this paragraph (17) of
     subsection (c) of Section 3‑8, a "private label credit program" means a credit program involving a financial institution and a private label party that is used by a customer of the financial institution and the private label party primarily for payment for goods or services sold, manufactured, or distributed by a private label party.
        (2) For purposes of this paragraph (17) of
     subsection (c) of Section 3‑8, a "private label party" means, with respect to a private label credit program, any of the following: a retailer, a merchant, a manufacturer, a trade group, or any such person's affiliate, subsidiary, member, agent, or service provider.
    (d) An association may not disclose to any person, except to the member or holder of capital or his duly authorized agent, any financial records relating to that member or holder of capital of that association unless:
        (1) The member or holder of capital has authorized
     disclosure to the person; or
        (2) The financial records are disclosed in response
     to a lawful subpoena, summons, warrant, citation to discover assets, or court order that meets the requirements of subsection (e) of this Section.
    (e) An association shall disclose financial records under subsection (d) of this Section pursuant to a lawful subpoena, summons, warrant, citation to discover assets,

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Statutes > Illinois > Chapter205 > 1180 > 020501050HArt_3


      (205 ILCS 105/Art. 3 heading)
ARTICLE 3. MEMBERSHIP AND MANAGEMENT

    (205 ILCS 105/3‑1) (from Ch. 17, par. 3303‑1)
    Sec. 3‑1. Members. (a) The membership of an association consists of:
    (1) Every depositor, holder of a withdrawable capital account of the association, or one or more withdrawable or permanent reserve shares, issued by the association; and
    (2) Every borrower from the association, as long as his loan remains unpaid and he remains liable to the association for the payment thereof; and every obligor of an investment made by the association under the provisions of the section of this Act concerning Investments in Obligations of Members; each of which members shall be known as a borrowing member.
    (b) Each joint ownership and each joint obligation shall constitute one membership.
(Source: P.A. 84‑543.)

    (205 ILCS 105/3‑2) (from Ch. 17, par. 3303‑2)
    Sec. 3‑2. Members' meetings.
    (a) Each annual meeting of the members shall be held at the time specified in the by‑laws; but the failure to hold an annual meeting at the time so specified shall not work a forfeiture or dissolution of the association. The board of directors, or the holders of not less than 20% of the outstanding permanent reserve shares or of the withdrawal value of all withdrawable capital of the association, or such other person or persons as may be designated by the by‑laws, may call a special meeting of the members. Every annual or special meeting shall be held at the business office of the association, or, if the space therein available for such meeting is inadequate, in such other place within the same county as shall be specifically designated in the notice of such meeting.
    (b) Notice of an annual meeting shall be published once not less than 10 days nor more than 40 days before the date of the meeting and shall be posted in areas of public access at the place of business of the association in a manner to be prescribed by the Commissioner. Such notice shall be prominently and continuously displayed up to and including the day of the meeting beginning not less than 60 days immediately preceding the date of such meeting.
    (c) However, for any special meeting, for any annual meeting which is to consider any proposition the affirmative action on which requires two‑thirds vote as set forth in this Act, or for any proposition to amend the articles of incorporation of the association, the notice shall be by mail, post marked not less than 10 days or more than 40 days before the date of the meeting, and by posting at the association's place of business in a like manner as for an annual meeting, with such posting to commence on the date notice is given. Published or mailed notice shall state the place, day, hour and purpose of the meeting.
    (d) A quorum at any meeting of the members shall consist of the members present in person or represented by proxy, who are entitled to cast a majority of the total number of votes which all members of the association are entitled to cast at such meeting; except that the articles of incorporation may specify some other quorum requirement, but not less than one‑third of such total number of votes. Any meeting, including one at which a quorum is not present, may be adjourned by majority vote to a specified date without further notice.
    (e) Voting at a meeting may be either in person or by proxy executed in writing by the member or shareholder or by his duly authorized attorney‑in‑fact. No proxy shall be valid:
        (1) Unless executed in an instrument separate from
     other forms, documents or papers which pertain to any matter of the association or a member's interest therein. The form of such instrument shall be prescribed by the Commissioner, who shall give due regard to size, color, appearance and distinctiveness;
        (2) For any meeting at which the member who gave it
     is present, provided that notice that the member will himself exercise his voting rights is given in writing prior to the taking of any vote to an official whom the association shall at each meeting identify as having responsibility for such matter and provided further that the validity and duration of such proxy will be otherwise unimpaired;
        (3) Unless the member giving the proxy is told by
     the person to whom it is given, or his agent or representative, that the proxy is optional and the voting rights it represents can be exercised by the member himself; that if it is given it can be cancelled at any time by giving notice in writing at the association's office at least 5 days prior to any meeting, and that meeting alone, at which the member is present and has given written notification of his intent to exercise his voting rights; the provisions of this paragraph shall only be applicable to associations not maintaining insurance of the association's withdrawable capital;
        (4) Unless the member giving the proxy is told by
     the person to whom it is given, or his agent or representative, the name of the individual who will exercise the proxy; that the effect of the proxy will be to entitle the person to whom it is given to use the vote or votes the proxy represents as if it or they were that person's own vote or votes; and that, if the proxy is given to someone representing the management of the association, the effect of the proxy will be to support the policies and procedures of the association's management; the provisions of this paragraph shall only be applicable to associations not maintaining insurance of the association's withdrawable capital; or
        (5) After 11 months from the date of its execution,
     unless otherwise provided in the proxy and unless the member giving the proxy is notified in writing when it will terminate.
    (f) In the determination of all questions requiring ascertainment of the members entitled to vote and of the number of outstanding shares, the following rules shall apply:
        (1) The date of determination shall be as provided
     in the Section of this Act concerning Record Date for Voting, Dividend and Other Purposes;
        (2) Each person holding one or more withdrawable
     share accounts shall have the vote of one share for each $100 of the aggregate withdrawal value of such accounts and shall have the vote of one share for any fraction of $100;
        (3) Each holder of permanent reserve shares shall
     have one vote for each permanent reserve share which he holds;
        (4) Each borrowing member as such shall have the
     vote of one share in addition to any vote which he may have otherwise;
        (5) Shares owned by the association shall not be
     counted or voted; and
        (6) Notwithstanding anything contained in this Act
     to the contrary, an association authorized to issue permanent reserve shares may provide in the association's articles of incorporation that voting rights shall be vested exclusively in permanent reserve shareholders.
(Source: P.A. 89‑355, eff. 8‑17‑95.)

    (205 ILCS 105/3‑3) (from Ch. 17, par. 3303‑3)
    Sec. 3‑3. Record date for voting, dividend and other purposes. For the purpose of determining the holders of shares, capital accounts and membership entitled to notice of or to vote at any meeting of the members, or in order to make a determination of the members, holders or other persons for any other proper purpose, the by‑laws may provide for a record date, not less than 10 days nor more than 40 days before the meeting, or other event or transaction with regard to which the determination is to be made; and such determination shall be made as of the close of business on such record date. If the by‑laws do not provide for a record date, the board of directors may fix such a date for each such determination, within the time stated above; and if the board of directors shall fail to so fix a date, the record date for a meeting shall be the date on which the first notice of meeting is given. Shares or share accounts withdrawn or retired after such record date shall not be voted or counted in determining the number of shares outstanding. This Section shall be applicable to the dividend payments on permanent reserve capital, but dividends on withdrawable capital shall be governed by the Section of this Act concerning Dividends.
(Source: P.A. 84‑543.)

    (205 ILCS 105/3‑4) (from Ch. 17, par. 3303‑4)
    Sec. 3‑4. Directors. The business and affairs of the association shall be exercised by its board of directors, which shall be elected and shall exercise its powers as follows:
    (a) The board of directors shall consist of the number of directors fixed by the by‑laws but shall be not less than 5. At all times at least 2/3 of the directors shall be residents of this State. The majority of the directors shall not be salaried employees of the Association. Except with the written approval of the Commissioner, no member shall be eligible to serve as a director of the association who has been adjudicated a bankrupt or convicted of a criminal offense involving dishonesty or a breach of trust;
    (b) To qualify as a director, a member of the association must in good faith and in his own right, or jointly with his spouse, hold either a withdrawable capital account or permanent reserve shares, or a combination of both, in an amount not less than $150 if the assets of the association do not exceed $1,000,000, not less than $500 if the assets of the association equal or exceed $1,000,000 but are less than $5,000,000, or not less than $1,000 if the assets of the association equal or exceed $5,000,000;
    (c) Unless receiving prior written approval of the Commissioner, which approval shall be granted only after a complete exposition of all relevant facts and information, a director shall cease to be a director if the net equity above share loans of all accounts or shares in the association held by him aggregates less than the necessary qualifying interest for a period in excess of 30 days. No action of the board of directors is invalidated through the participation of such director in such action. If a director becomes ineligible under the terms of this paragraph (c) by reason of the exercise by the association of the right of retirement under either Section 4‑5 or 4‑12, he remains validly in office until the expiration of his term or until he otherwise becomes ineligible, resigns or is removed, whichever occurs first;
    (d) Except as hereinafter provided in this paragraph, directors shall be elected for one year and shall serve until their successors are elected and qualified. If the board of directors of an association consists of 6 or more members, in lieu of electing the membership of the whole board of directors annually, the by‑laws of an association may provide that the directors shall be divided into either 2 or 3 classes, each class to be as nearly equal in number as is possible. The term of office of directors of the first class shall expire at the first annual meeting of the members after their election, that of the second class shall expire at the second annual meeting after their election, and that of the third class, if any, shall expire at the third annual meeting after their election. At each annual meeting after such classification, the number of directors equal to the number of the class whose terms expire at the time of such meeting shall be elected to hold office until the second succeeding annual meeting, if there be 2 classes, or until the third succeeding annual meeting, if there be 3 classes. In all elections of directors, cumulative voting shall be permitted as provided in the Constitution of this State. More than 3 consecutive absences from regular or special meetings of the board of directors by any director, unless excused by resolution of the board of directors, shall automatically constitute a resignation. The Commissioner, in the event the board of directors fails to fill a vacancy, may call a special meeting of the members to elect directors to fill vacancies on the board of any association not having the minimum number of directors required under paragraph (a) of Section 3‑4 of this Act;
    (e) If a vacancy on the board of directors occurs from any cause, the remaining directors may continue the management of the association. Temporary vacancies between meetings of the members may be filled at a regular or special meeting of the board of directors prior to which notice has been given to the effect that a vacancy or vacancies will be filled at such meeting. The term of any such temporary director expires at the next regular or special meeting of the members;
    (f) The board of directors shall hold regular meetings as provided in the by‑laws. Special meetings may be held as provided in the by‑laws, and also upon call by the Commissioner after not less than 12 hours' notice by personal or mail service to each director;
    (g) A majority of the board of directors constitutes a quorum for the transaction of business unless a greater number is required in the by‑laws. The act of the majority of the directors present at a meeting at which a quorum is present is the act of the board of directors, unless the act of a greater number is required by law, the articles of incorporation or the by‑laws;
    (h) The board of directors shall have all powers which are necessary and proper to enable the association to accomplish its purposes;
    (i) The board of directors may adopt or amend by‑laws, but no by‑law is effective until it has been submitted to and approved by the Commissioner as being in conformity with this Act. Each adopted amendment shall be subject to the same inquiry by the Commissioner as the corresponding provision in the original by‑laws of the association except as provided in subsection (j);
    (j) If a by‑law amendment provides for a change in the location of an association's business office or the establishment of an additional office, the Commissioner shall not approve the amendment unless he finds that (1) the capital of the association meets the minimum initial capital requirements for a new office as established by regulation of the Commissioner; (2) notice of the association's proposal has been published at least once both in the community of the proposed new location and in the community of the present location; (3) there are no matters pertaining to the association which are of supervisory concern to the Commissioner; and (4) the communities of the existing offices of the association will be properly and adequately served by the association without undue injury to the adequate availability of local credit and thrift services in those communities. The Commissioner may conduct public hearings to determine his findings prior to his approval or disapproval of the amendment; and he may require, as a condition of his approval, ratification of the amendment by the vote (at a meeting of the members) or the written consent of the members of the association who are entitled to cast a majority of the total number of votes which all members of the association are entitled to cast; and
    (k) Every director has the right at any reasonable time to inspect all books, records, documents of every kind and the physical properties of the association of which he is a director.
(Source: P.A. 86‑137.)

    (205 ILCS 105/3‑5) (from Ch. 17, par. 3303‑5)
    Sec. 3‑5. Waiver of notice. Whenever notice is required to be given under this Act, a waiver thereof in writing signed by the person or persons entitled to said notice shall be deemed equivalent thereto.
(Source: P.A. 84‑543.)

    (205 ILCS 105/3‑6) (from Ch. 17, par. 3303‑6)
    Sec. 3‑6. Officers; Suspension and removal of officers, directors and employees. (a) The officers of an association shall consist of a president, one or more vice presidents, secretary, treasurer and such other officers as the by‑laws shall provide, to be elected by the directors; if the by‑laws so provide, any 2 or more offices may be held by the same person, except that one person shall not hold the offices of president and secretary. The duties and powers of the secretary may be set forth in the by‑laws of the association and may be exercised by any other officer designated by the board of directors.
    (b) The existence of an association shall not terminate by reason of the failure to elect officers at the time mentioned in the by‑laws, and each officer shall hold his office until his successor is elected and qualified.
    (c) Whenever any officer, director or employee of an association or of a holding company operating under this Act is charged in any indictment with the commission of or participation in a crime involving the affairs of any association incorporated under this Act or of a holding company operating under this Act, a federal association or any other financial institution, the Commissioner may, by written notice served upon such officer, director or employee, suspend him from office. Such suspension shall remain in effect (unless such officer, director or employee sooner resigns or is not reappointed or reelected at the expiration of his term of office) until such officer, director or employee is convicted or is adjudged not guilty of such offense or the indictment is dismissed or otherwise disposed of. If such officer, director, or employee is convicted of such offense, he shall thereupon cease to be an officer, director, or employee of such association; but if he is found not guilty, his suspension shall automatically be terminated. The Commissioner may request the Attorney General to file an action on his behalf to enforce any order made under this subsection.
    (d) The board of directors shall designate and determine the management structure of the association and elect or appoint all officers. Each of the officers elected or appointed by the board of directors shall serve at the pleasure of the board of directors or pursuant to a written employment contract between the officer and the association.
    (e) Whenever the Commissioner determines that any officer, director or employee of an association or a holding company operating under this Act has committed a violation of any law, rule, regulation or order of the Commissioner, and that such violation or continued violation may result in a substantial financial loss or other substantial damage to the association or holding company or that the interests of its members may be seriously prejudiced by such violation or continued violation, the Commissioner shall notify such officer, director or employee of his intention to issue an order and may thereafter issue an order suspending such person from office or prohibiting his participation in the conduct of the affairs of the association or holding company, or both. The notice to such person shall contain a statement of facts constituting the grounds for such order; shall fix a time when such order will be issued; and shall state the effective date of such order, which shall be not less than 10 days after the date of the order. A copy of such notice and order shall be sent to the association or holding company. Such order shall be and remain in effect from the effective date specified in the notice provided for under this Section until such time as the order is removed by the Commissioner or until the order is removed, modified or stayed pursuant to the Administrative Review Law.
    (f) Officers and directors of any entity operating under this Act shall also disclose to the Commissioner any and all criminal proceedings in which they have been a party or participated which resulted in a grant of immunity from prosecution, a conviction, a plea of nolo contendere or its equivalent, or which are currently pending.
(Source: P.A. 86‑137.)

    (205 ILCS 105/3‑7) (from Ch. 17, par. 3303‑7)
    Sec. 3‑7. Bonds of officers and employees. (a) Every person appointed or elected to any position requiring the receipt, payment, management or use of money belonging to an association, or whose duties permit him to have access to or custody of any of its money or securities or whose duties permit him regularly to make entries in the books or other records of the association, before assuming his duties shall become bonded in some trust or company authorized to issue bonds in this state, or in a fidelity insurance company licensed to do business in this State. Each such bond shall be on a form or forms as the Commissioner shall require and in such amount as the board of directors shall fix and approve. Each such bond, payable to the association, shall be an indemnity for any loss the association may sustain in money or other property through any dishonest or criminal act or omission by any person required to be bonded, committed either alone or in concert with others. Such bond shall be in the form and amount prescribed by the Commissioner, who may at any time require one or more additional bonds. A true copy of every bond, including all riders and endorsements executed subsequent to the effective date of the bond, shall be filed at all times with the Commissioner. Each bond shall provide that a cancellation thereof either by the surety or by the insured shall not become effective unless and until 30 days notice in writing first shall have been given to the Commissioner, unless he shall have approved such cancellation earlier.
    (b) Nothing contained herein shall preclude the Commissioner from proceeding against an association as provided in this Act should he believe that it is being conducted in an unsafe manner in that the form or amount of bonds so fixed and approved by the board of directors is inadequate to give reasonable protection to the association.
(Source: P.A. 85‑1271.)

    (205 ILCS 105/3‑8)(from Ch. 17, par. 3303‑8)
    Sec. 3‑8. Access to books and records; communication with members.
    (a) Every member or holder of capital shall have the right to inspect the books and records of the association that pertain to his account. Otherwise, the right of inspection and examination of the books and records shall be limited as provided in this Act, and no other person shall have access to the books and records or shall be entitled to a list of the members.
    (b) For the purpose of this Section, the term "financial records" means any original, any copy, or any summary of (i) a document granting signature authority over a deposit or account; (ii) a statement, ledger card, or other record on any deposit or account that shows each transaction in or with respect to that account; (iii) a check, draft, or money order drawn on an association or issued and payable by an association; or (iv) any other item containing information pertaining to any relationship established in the ordinary course of an association's business between an association and its customer, including financial statements or other financial information provided by the member or holder of capital.
    (c) This Section does not prohibit:
        (1) The preparation, examination, handling, or
     maintenance of any financial records by any officer, employee, or agent of an association having custody of those records or the examination of those records by a certified public accountant engaged by the association to perform an independent audit.
        (2) The examination of any financial records by, or
     the furnishing of financial records by an association to, any officer, employee, or agent of the Commissioner of Banks and Real Estate or federal depository institution regulator for use solely in the exercise of his duties as an officer, employee, or agent.
        (3) The publication of data furnished from financial
     records relating to members or holders of capital where the data cannot be identified to any particular member, holder of capital, or account.
        (4) The making of reports or returns required under
     Chapter 61 of the Internal Revenue Code of 1986.
        (5) Furnishing information concerning the dishonor
     of any negotiable instrument permitted to be disclosed under the Uniform Commercial Code.
        (6) The exchange in the regular course of business
     of (i) credit information between an association and other associations or financial institutions or commercial enterprises, directly or through a consumer reporting agency or (ii) financial records or information derived from financial records between an association and other associations or financial institutions or commercial enterprises for the purpose of conducting due diligence pursuant to a purchase or sale involving the association or assets or liabilities of the association.
        (7) The furnishing of information to the appropriate
     law enforcement authorities where the association reasonably believes it has been the victim of a crime.
        (8) The furnishing of information pursuant to the
     Uniform Disposition of Unclaimed Property Act.
        (9) The furnishing of information pursuant to the
     Illinois Income Tax Act and the Illinois Estate and Generation‑Skipping Transfer Tax Act.
        (10) The furnishing of information pursuant to the
     federal "Currency and Foreign Transactions Reporting Act", (Title 31, United States Code, Section 1051 et seq.).
        (11) The furnishing of information pursuant to any
     other statute that by its terms or by regulations promulgated thereunder requires the disclosure of financial records other than by subpoena, summons, warrant, or court order.
        (12) The exchange of information between an
     association and an affiliate of the association; as used in this item, "affiliate" includes any company, partnership, or organization that controls, is controlled by, or is under common control with an association.
        (13) The furnishing of information in accordance
     with the federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996. Any association governed by this Act shall enter into an agreement for data exchanges with a State agency provided the State agency pays to the association a reasonable fee not to exceed its actual cost incurred. An association providing information in accordance with this item shall not be liable to any account holder or other person for any disclosure of information to a State agency, for encumbering or surrendering any assets held by the association in response to a lien or order to withhold and deliver issued by a State agency, or for any other action taken pursuant to this item, including individual or mechanical errors, provided the action does not constitute gross negligence or willful misconduct. An association shall have no obligation to hold, encumber, or surrender assets until it has been served with a subpoena, summons, warrant, court or administrative order, lien, or levy.
        (14) The furnishing of information to law
     enforcement authorities, the Illinois Department on Aging and its regional administrative and provider agencies, the Department of Human Services Office of Inspector General, or public guardians: (i) upon subpoena by the investigatory entity or the guardian, or (ii) if there is suspicion by the association that a customer who is an elderly or disabled person has been or may become the victim of financial exploitation. For the purposes of this item (14), the term: (i) "elderly person" means a person who is 60 or more years of age, (ii) "disabled person" means a person who has or reasonably appears to the association to have a physical or mental disability that impairs his or her ability to seek or obtain protection from or prevent financial exploitation, and (iii) "financial exploitation" means tortious or illegal use of the assets or resources of an elderly or disabled person, and includes, without limitation, misappropriation of the elderly or disabled person's assets or resources by undue influence, breach of fiduciary relationship, intimidation, fraud, deception, extortion, or the use of assets or resources in any manner contrary to law. An association or person furnishing information pursuant to this item (14) shall be entitled to the same rights and protections as a person furnishing information under the Elder Abuse and Neglect Act, the Illinois Domestic Violence Act of 1986, and the Abuse of Adults with Disabilities Intervention Act.
        (15) The disclosure of financial records or
     information as necessary to effect, administer, or enforce a transaction requested or authorized by the member or holder of capital, or in connection with:
            (A) servicing or processing a financial product
         or service requested or authorized by the member or holder of capital;
            (B) maintaining or servicing an account of a
         member or holder of capital with the association; or
            (C) a proposed or actual securitization or
         secondary market sale (including sales of servicing rights) related to a transaction of a member or holder of capital.
        Nothing in this item (15), however, authorizes the
     sale of the financial records or information of a member or holder of capital without the consent of the member or holder of capital.
        (16) The disclosure of financial records or
     information as necessary to protect against or prevent actual or potential fraud, unauthorized transactions, claims, or other liability.
        (17)(a) The disclosure of financial records or
     information related to a private label credit program between a financial institution and a private label party in connection with that private label credit program. Such information is limited to outstanding balance, available credit, payment and performance and account history, product references, purchase information, and information related to the identity of the customer.
        (b)(l) For purposes of this paragraph (17) of
     subsection (c) of Section 3‑8, a "private label credit program" means a credit program involving a financial institution and a private label party that is used by a customer of the financial institution and the private label party primarily for payment for goods or services sold, manufactured, or distributed by a private label party.
        (2) For purposes of this paragraph (17) of
     subsection (c) of Section 3‑8, a "private label party" means, with respect to a private label credit program, any of the following: a retailer, a merchant, a manufacturer, a trade group, or any such person's affiliate, subsidiary, member, agent, or service provider.
    (d) An association may not disclose to any person, except to the member or holder of capital or his duly authorized agent, any financial records relating to that member or holder of capital of that association unless:
        (1) The member or holder of capital has authorized
     disclosure to the person; or
        (2) The financial records are disclosed in response
     to a lawful subpoena, summons, warrant, citation to discover assets, or court order that meets the requirements of subsection (e) of this Section.
    (e) An association shall disclose financial records under subsection (d) of this Section pursuant to a lawful subpoena, summons, warrant, citation to discover assets,

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