Illinois Gov. Pat Quinn signed into law House Bill 1572 thatamends the state's Credit Union Act, which is expected to establisha fair and consistent civil penalty assessment process, accordingto the Illinois Credit Union League.

The act's new amendment authorizes the state's Department ofFinancial and Professional Regulation to impose civil penalties butonly when the DFPR secretary reasonably determines through“objective facts and an accurate assessment of accurate legalstandards” when a credit union violates the Credit Union Act, DFPRorders, or participates in any unsafe or unsound practices that ledto financial loss or created a reasonable probability that asubstantial financial loss will result.

Credit union directors, officers and committee members also willbe held responsible if the DFPR secretary determines through thenewly established civil penalty assessment process that a violationwas caused by their “willful misconduct or material breach offiduciary duty,” according to the new amendment.

“In the short time since the civil penalty process has been inplace, interpretive issues have arisen regarding key operativeterms,” ICUL said in a statement. “HB 1572 addresses those issues byadding substantive due process criteria to provide objectivestandards of materiality and quality assurance and a cureopportunity before any assessment of a civil penalty.”

The new amendment also authorizes the DFPR secretary to assesscivil penalties if the financial loss or probable financial loss isequal to or greater than either one percent of the credit union'stotal assets or one percent of the credit union's total grossincome.

The DFPR may also post its civil penalty orders on its website,but only after the final administrative decision is made and“adjudicated to finality.”

Gov. Quinn signed the bill into law on Aug. 16 and it becameeffective immediately, according to the Illinois league.