State-chartered credit unions in Illinois will receive a smallerregulatory fee bill for the fourth quarter, thanks to a credit foroverpayment made during former Gov. Rod Blagojevich'sadministration.

The credit stems from a court-approved settlement over fees paid as a result ofBlagojevich's fee escalation and transfer budgetary arrangementduring fiscal years 2004 through 2006, the disgraced governor'sattempt to siphon examiner fees to pay the state's budgetdeficit.

The Illinois Credit Union League initiated legislation toimplement the settlement, resulting in a 2009 aggregate cashpayment of approximately $6.2 million. The 2012 credit is more than$1 million, slightly less than fourth-quarter regulatory fees.

The 2009 legislation also accomplished two other goals, saidStephen Olson, ICUL executive vice president and general counsel.First, it codified a rate reduction in regulatory fees on a goingforward basis commencing Jan. 1, 2009. Second, the 2009 legislationreduced the Credit Union Fund margin that triggers a credit back toIllinois state-chartered credit unions.

The legislation reduced the fund margin level from 50% to 25%;when the fiscal year-end fund balance exceeds 25% of the expensesincurred by the state, the excess must be credited to creditunions.

Previously, Illinois state-chartered credit unions received anaggregate margin credit of $1,256,893, which equaled a full fourthquarter fee holiday for 2011, as well as a partial holiday on their2012 first quarter fees paid to the regulatory agency in April2012. Illinois state-chartered credit unions also received anaggregate credit of $1,452,256, which provided a total holiday onthe fourth quarter regulatory fee in 2010 as well as a partialholiday for the first quarter of 2011.

Olson said the amount of the credit is determined on aproportionate basis, by taking into account the regulatory fee acredit union paid versus the aggregate amount of all fees collectedby DFI from credit unions.

Dan Plauda, ICUL president/CEO, said, “We are particularlypleased the settlement terms we negotiated with the state in 2008continues to provide Illinois state-chartered credit unions with anadditional financial benefit. This is especially significantgiven the sluggish economic recovery and extreme regulatory burdenour credit unions are facing.”