For the second year in a row, Illinois credit unions will enjoy a holiday boost to their bottom line — $1.25 million — thanks to a payback from the state on overpayment of regulatory fees during the administration of former Gov. Rod Blagojevich.
Return of the fourth quarter examiner fees is the result of a 2008 court settlement on the jailed governor's attempt to seize CU and bank examiner fees and sweep them into a state general fund, a procedure financial institutions charged as illegal.
The Illinois Credit Union League, which along with banker trades had been party to the legal challenge, said the $1.25 million credit "is anticipated to be slightly less than the total 2011 fourth quarter billing to credit unions for regulatory fees."
The payback, said the league, occurs as an outgrowth of a 2009 bill signed by Gov. Patrick Quinn outlining the schedule of future cash payments.
"Under the terms of the settlement, Illinois state-chartered credit unions received a cash payment from the State in June 2009 of approximately $6.2 million," said the league. The payment represented the credit "for the overpayment in regulatory fees made under the Blagojevich Administration's fee escalation and transfer sweep arrangement adopted by the state in fiscal years 2004 through 2006."
Stephen Olson, ICUL executive vice president and general counsel of the league, said the timetable for future return of the funds is based on a codified rate reduction schedule which started Jan. 1 2009. The schedule is keyed to a "margin threshold" on funds deposited by CUs to offset ordinarily administrative operating expenses to run the CU section of the Department of Financial Institutions.
"As was the case last year, I am pleased to report the margin threshold has again been surpassed for the state's fiscal year ending June 30, 2011, and Illinois state-chartered credit unions are therefore entitled to a credit," said Olson.
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