Sec. 61. Suspension.

597 words·~3 min read·/il/chapter-205/act-305/61

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(1)If the Secretary determines that any credit union is bankrupt, insolvent, impaired or that it has violated this Act, or is operating in an unsafe or unsound manner, he shall issue an order temporarily suspending the credit union's operations for not more than 60 days. The board of directors shall be given notice by registered or certified mail of such suspension, which notice shall include the reasons for such suspension and a list of specific violations of the Act. The Secretary shall also notify the members of the credit union board of advisors of any suspension. The Director may assess to the credit union a penalty, not to exceed the regulatory fee as set forth in this Act, to offset costs incurred in determining the condition of the credit union's books and records.

(2)Upon receipt of such suspension notice, the credit union shall cease all operations, except those authorized by the Secretary, or the Secretary may appoint a manager-trustee to operate the credit union during the suspension period. The board of directors shall, within 10 days of the receipt of the suspension notice, file with the Secretary a reply to the suspension notice by submitting a corrective plan of action or a request for formal hearing on said action pursuant to the Department's rules and regulations.

(3)Upon receipt from the suspended credit union of evidence that the conditions causing the order of suspension have been corrected, and after determining that the proposed corrective plan of action submitted is factual, the Secretary shall revoke the suspension notice, permit the credit union to resume normal operations, and notify the board of credit union advisors of such action.

(4)If the Secretary determines that the proposed corrective plan of action will not correct such conditions, he may take possession and control of the credit union. The Secretary may permit the credit union to operate under his direction and control and may appoint a manager-trustee to manage its affairs until such time as the condition requiring such action has been remedied, or in the case of insolvency or danger of insolvency where an emergency requiring expeditious action exists, the Secretary may involuntarily merge the credit union without the vote of the suspended credit union's board of directors or members (hereafter involuntary merger) subject to rules promulgated by the Secretary. No credit union shall be required to serve as a surviving credit union in any involuntary merger. Upon the request of the Secretary, a credit union by a vote of a majority of its board of directors may elect to serve as a surviving credit union in an involuntary merger. If the Secretary determines that the suspended credit union should be liquidated, he may appoint a liquidating agent and require of that person such bond and security as he considers proper.

(5)Upon receipt of a request for a formal hearing, the Secretary shall conduct proceedings pursuant to rules and regulations of the Department. The credit union may request the appropriate court to stay execution of such action. Involuntary liquidation or involuntary merger may not be ordered prior to the conclusion of suspension procedures outlined in this Section.

(6)If, within the suspension period, the credit union fails to answer the suspension notice or fails to request a formal hearing, or both, the Secretary may then

(i)involuntarily merge the credit union if the credit union is insolvent or in danger of insolvency and an emergency requiring expeditious action exists or

(ii)revoke the credit union's charter, appoint a liquidating agent and liquidate the credit union.