Illinois Administrative Code
Title 38 - FINANCIAL INSTITUTIONS
Part 190 - ILLINOIS CREDIT UNION ACT
Subpart A - GENERAL PROVISIONS
Section 190.190 - Liquidation
Universal Citation: 38 IL Admin Code ยง 190.190
Current through Register Vol. 48, No. 12, March 22, 2024
A credit union may enter liquidation through actions initiated by its board of directors to voluntarily dissolve or by actions initiated by the Secretary of the Department to involuntarily dissolve and be liquidated by a Liquidating Agent of one person or a committee under the following procedures:
a) Voluntary Liquidation:
1) After completing the
requirements in Section 62 of the Act, the Liquidating Agent must furnish a
fidelity bond in compliance with section
190.120.
2) Upon receipt and approval of the fidelity
bond, the Secretary shall issue a Certificate of Voluntary Dissolution
attesting to compliance with Section 62 of the Act, stating the names of the
Liquidating Agent and authorizing the taking of possession and control of the
books, records and assets of the credit union for the purpose of conserving and
collecting the assets, paying all indebtedness and distributing the remaining
assets to the membership. Certified copies of the Certificate of Voluntary
Dissolution shall be furnished to the Liquidating Agent for use in securing
access to the credit union's funds in depositories, withdrawal of investments
or for any other purpose to carry out the liquidation.
b) Involuntary Liquidation:
1) Under the provisions of Sections 61 and 62
of the Act, the Secretary shall issue to the credit union by certified mail,
with a copy to each director, an order for Possession and Control for purpose
of liquidation.
2) A Liquidating
Agent (person or committee) shall be appointed by the Secretary to carry out
liquidation under the direction and control of the Secretary. Except when the
Liquidating Agent is the NCUA or other insurer or agent under the share
insurance interest, the procedures listed in subsection (c) shall be
followed.
c) The liquidation, whether voluntary or involuntary, shall be under the direction of the Secretary and shall proceed in the following manner:
1) The Certificate shall be promptly filed at
the County Recorder's office in the county in which the main office of the
credit union is located and the recording information shall be forwarded to the
Division.
2) An itemized inventory,
in duplicate, as of the date of the Certificate listing the following, shall be
prepared to include:
A) all assets;
B) all known liabilities;
C) a list of all members accounts' by name,
address, account numbers, share and loan balances, notes payable on file, and
security offered;
D) a balance
sheet as of the date of the Certificate;
E) a Statement of Income and Expenses as of
the date of the Certificate;
F) the
name and address of all depositories, including the credit union's account
numbers and balance.
3)
A signed and dated copy of the items listed in subsections (c)(1) and (c)(2)
shall be forwarded to the Division. One copy of each of the items listed in
subsections (c)(1) and (c)(2) is to be retained by the Liquidating
Agent.
4) The books and records are
to be kept posted currently throughout the liquidation.
5) All funds received shall be promptly
deposited in the credit union's depositories. The Secretary shall approve a
change in depositories upon receipt of written request from the agent stating
the reason for the change.
6) All
disbursement of funds shall have prior approval of the Division and be in
accordance with the priority established in Section 62(7) of the Act. The
Division shall approve in writing disbursement of funds during liquidation upon
written request from the Liquidating Agent. Each request must contain a current
financial statement and a total dollar amount to be distributed pro rata to the
shareholders.
7) Monthly reports,
consisting of a balance sheet, statement of income and expense, and an analysis
of funds received and expended, shall be prepared on forms furnished by the
Division as of each month's end and forwarded to the Division on or before the
15th of the subsequent month.
8) An initial report on all accounts turned
over to an attorney and/or collection agency for collection is to be forwarded
to the Division with subsequent periodic reports showing collection activity on
these accounts.
9) Subject to the
prior approval of the Secretary, the Liquidating Agent may prosecute and defend
all suits or intervene and execute all necessary deeds, releases or other
instruments necessary to consummate any sale of real estate or personal
property, or compromise any debt or claim to the same effect as if the
instruments were executed by the officers of the credit union. The agent shall
request approval, in writing, detailing the specific instances. The Secretary
shall base his or her approval on maximizing the return of funds and protecting
the interests of the shareholders.
10) Compensation paid for the Liquidating
Agent's services shall be determined by the Secretary, so as to maximize the
return of shareholders' funds and to provide reasonable compensation for the
professional services required.
11)
All expenses incurred in the liquidation shall be paid out of the funds of the
credit union.
12) Completion of the
liquidation shall be in compliance with provisions of Section 62 of the
Act.
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