Loading ...ICUL Legisltative Update
Robert Meza, the director of the Department of Financial Institutions, was the main speaker during this morning’s legislative update at the Illinois Credit Union League’s annual convention. Although most in the room were fellow board members, there was a significant number of managers, a switch from last year.
What most wanted to hear from Meza was a time-table for the state of Illinois to payout a legal settlement authorized by SB 2513. The law, signed by Governor Quinn ten days ago, settles a lawsuit brought by Illinois credit unions over a fee increase by then Governor Blagojevich. Unfortunately, Meza has no time-table to announce.
The settlement will reimburse credit unions for fees they were charged by the state for services unrealted to direct regulation. The fees were little more than an indirect tax on credit unions and other financial institutions that Blagojevich used to pay for other state services unrelated to banking.
On corproate credit unions, Meza stated that 8 Illinois credit unions require corrective measures. Capitalization is an issue with these institutions. There are also 20 credit unions approaching inadequate capitalization. However, Meza described the overall health of the state’s 400 credit unions as “healthy.” In the past 12 months, credit unions have witnessed a $4.3-billion increase in capitalization.
Meza explained that DFI examiners will take a harder look at credit unions during their reviews. He said that there will be closer examination of the “usual suspects” such as provisions for loan loss.
Meza also explained that examiners want to understand Board involvment with investment decisions. This is a prudent approach because Board members are responsible for the performance of their institutions. Fortunately, Meza doesn’t want his examiners to become “activists.”
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