AB807,3,3
1186.07 (8) Director conflict of interest. (a) In this subsection, "conflict of
2interest transaction" means a transaction with the credit union in which a director
3of the credit union has a direct or indirect interest.
AB807,3,54 (b) A conflict of interest transaction is not voidable by the credit union solely
5because of the director's interest in the transaction if any of the following is true:
AB807,3,96 1. The material facts of the transaction and the director's interest were
7disclosed or known to the board of directors or a committee of the board of directors
8and the board of directors or committee authorized, approved, or specifically ratified
9the transaction under par. (d).
AB807,3,1010 2. The transaction was fair to the credit union.
AB807,3,1311 (c) For purposes of this subsection, the circumstances in which a director of the
12credit union has an indirect interest in a transaction include a transaction under any
13of the following circumstances:
AB807,3,1514 1. Another entity in which the director has a material financial interest or in
15which the director is a general partner is a party to the transaction.
AB807,3,1816 2. Another entity of which the director is a director, officer, or trustee is a party
17to the transaction and the transaction is or, because of its significance to the credit
18union, should be considered by the board of directors of the credit union.
AB807,4,319 (d) For purposes of par. (b) 1., a conflict of interest transaction is authorized,
20approved, or specifically ratified if it receives the affirmative vote of a majority of the
21directors on the board of directors or on the committee acting on the transaction who
22have no direct or indirect interest in the transaction. If a majority of the directors
23who have no direct or indirect interest in the transaction vote to authorize, approve,
24or ratify the transaction, a quorum is present for the purpose of taking action under
25this subsection. The presence of, or a vote cast by, a director with a direct or indirect

1interest in the transaction does not affect the validity of any action taken under par.
2(b) 1. if the transaction is otherwise authorized, approved, or ratified as provided in
3this subsection.
AB807,3 4Section 3. 186.071 (1) (e) of the statutes is amended to read:
AB807,4,65 186.071 (1) (e) Avoid initiating or participating in any action that may be in
6that person's
present to that person a personal pecuniary conflict of interest.
AB807,4 7Section 4. 186.11 (2) (a) of the statutes is renumbered 186.11 (2) and amended
8to read:
AB807,4,119 186.11 (2) Credit union property. Subject to par. (b), a A credit union may
10purchase, hold, and dispose of property as necessary for or incidental to its
11operations.
AB807,5 12Section 5. 186.11 (2) (b) of the statutes is repealed.
AB807,6 13Section 6. 186.113 (8) of the statutes is amended to read:
AB807,4,1814 186.113 (8) Donations. Make donations and grants, the total of which may not
15exceed 1.0 percent of regular reserves within a given year,
if the board of directors
16approves any such donation or grant and the approval is based on a determination
17that the donation or grant is in the best interest of the credit union and is reasonable
18given the size and financial condition of the credit union.
AB807,7 19Section 7. 186.12 (3) of the statutes is amended to read:
AB807,4,2420 186.12 (3) Expenditures. The To the extent permitted by a credit union's
21bylaws, the
officers elected by the board of directors, and the members of the credit
22committee and loan officers may receive such compensation as the board authorizes,
23but the expenditures of the credit union for all purposes shall be paid from its
24earnings.
AB807,8 25Section 8. 186.13 of the statutes is amended to read:
AB807,5,10
1186.13 Expulsion. If the board of directors adopts a written policy, a credit
2union may expel a member if the member neglects or refuses to comply with this
3chapter or the credit union bylaws or if the board has other just cause. The credit
4union shall provide notice to the member in writing of the reason for expulsion. The
5notice shall include a description of the member's right to a hearing petition the
6board for reconsideration of the member's expulsion
and the time period for the
7member to request a hearing petition. If a member requests a hearing petitions the
8board
in writing within 45 days of receipt of the expulsion notice, the board shall give
9the member an opportunity to be heard on
reconsider the expulsion within 90 days
10after the date of the expulsion notice.
AB807,9 11Section 9. 186.17 of the statutes is repealed and recreated to read:
AB807,5,17 12186.17 Reserves. A credit union shall maintain sufficient reserves to meet
13anticipated withdrawals, commitments, and loan demand. A credit union shall
14maintain at least the level of reserves required for it by the national credit union
15administration. The office of credit unions may prescribe additional reserve
16requirements for an individual credit union based on examination findings or other
17reports available to the office.
AB807,10 18Section 10. 186.22 of the statutes is repealed.
AB807,11 19Section 11. 186.235 (7) (b) 3. of the statutes is created to read:
AB807,5,2220 186.235 (7) (b) 3. Provide examination reports to a credit union's attorneys,
21independent certified public accountants, or other consultants or advisers who have
22agreed in writing to maintain the confidentiality of the reports.
AB807,12 23Section 12. 186.235 (7m) of the statutes is amended to read:
AB807,6,424 186.235 (7m) Return of examination reports. Examination reports possessed
25by a credit union are confidential, remain the property of the office of credit unions,

1and shall be returned to the office of credit unions immediately upon request. This
2subsection does not prohibit a credit union from providing an examination report to
3its attorneys, independent certified public accountants, or other consultants or
4advisers who have agreed in writing to maintain the confidentiality of the report.
AB807,13 5Section 13. 186.235 (16) of the statutes is renumbered 186.235 (16) (a) and
6amended to read:
AB807,6,127 186.235 (16) (a) At Except as provided in par. (b), at least once every 18 months,
8the office of credit unions shall examine the records and accounts of each credit
9union. For that purpose the office of credit unions shall have full access to, and may
10compel the production of, each credit union's records and accounts. The office of
11credit unions may administer oaths to and examine each credit union's officers and
12agents.
AB807,14 13Section 14. 186.235 (16) (b) of the statutes is created to read:
AB807,6,1614 186.235 (16) (b) In lieu of the examination under par. (a), the office of credit
15unions may accept an examination conducted by the national credit union
16administration.
AB807,15 17Section 15. 186.70 (title) of the statutes is amended to read:
AB807,6,18 18186.70 (title) Record search; members' inspection of records.
AB807,16 19Section 16. 186.70 of the statutes is renumbered 186.70 (1) and amended to
20read:
AB807,7,621 186.70 (1) A credit union is entitled to reimbursement for expenses and costs
22incurred in searching for, reproducing and transporting books, papers, records and
23other data required to be produced by legal process, unless otherwise prohibited by
24law from collecting these expenses and costs or unless the person seeking the
25production is a government unit, as defined in s. 108.02 (17). The expenses and costs

1shall be paid by persons seeking such production. If a credit union is entitled to
2reimbursement under this section subsection, a credit union may not be required to
3produce books, papers, records and other data in response to legal process unless the
4expenses and costs, identified in an itemized invoice to be provided by the credit
5union, are paid or unless payment is tendered to the credit union in cash or by
6certified check or draft.
AB807,17 7Section 17. 186.70 (2) of the statutes is created to read:
AB807,7,108 186.70 (2) (a) A group of members of a credit union has the right, upon
9submission of a petition to the credit union that satisfies the requirements under par.
10(b), to inspect and copy nonconfidential portions of all of the following:
AB807,7,1111 1. The credit union's accounting books and records.
AB807,7,1312 2. The credit union's minutes of the proceedings of the credit union's members,
13board of directors, and committees of directors.
AB807,8,614 (b) The petition under par. (a) shall describe the particular records to be
15inspected and state a proper purpose for the inspection, which must be a purpose
16related to the protection of the members' financial interests in the credit union. The
17petition shall state that the petitioners as a whole, or certain named petitioners,
18agree to pay the direct and reasonable costs associated with search and duplication
19of requested material. The petition shall also state that the inspection is not desired
20for any purpose other than the stated purpose; that the members signing the petition
21will not sell or offer for sale any information obtained from the credit union; and that
22the members signing the petition have not within 5 years immediately preceding the
23signature date sold or offered for sale any information acquired from the credit union
24or aided or abetted any person in procuring any information from the credit union
25for purposes of sale. The petition shall name one member, and one alternate member,

1who shall represent the petitioners on issues such as inspection procedures, costs,
2and potential disputes. At least one percent of the credit union's members, with a
3minimum of 20 members and a maximum of 500 members, must sign the petition.
4Each member who signs the petition must have been a member of the credit union
5for at least 180 days at the time the petitioners submit the petition to the credit
6union.
AB807,8,147 (c) 1. A credit union shall respond to petitioners within 14 days of receiving a
8petition under par. (b). In its response, a credit union shall inform petitioners either
9that it will provide inspection of the requested material and, if so, when, or, if a credit
10union is going to withhold all or part of the requested material, it shall inform
11petitioners what part of the requested material it intends to withhold and the
12reasons for withholding the requested material. As soon as possible after receiving
13a petition, a credit union shall schedule inspection and copying of nonconfidential
14requested material it determines petitioners may inspect and copy.
AB807,8,1915 2. Inspection may be made in person or by agent or attorney and at any
16reasonable time. The credit union may, at its option, skip inspection and deliver
17copies of requested documents directly to the petitioners. Member inspection rights
18under this subsection are in addition to any other member inspection rights afforded
19by the credit union's charter or bylaws or other statutory provisions or rules.
AB807,8,2220 3. If the credit union denies inspection because the petitioners have failed to
21obtain the minimum number of valid signatures, the credit union shall inform the
22petitioners which signatures were not valid and why.
AB807,8,2423 (d) Members do not have the right to inspect any portion of the books, records,
24or minutes of a credit union if any of the following applies:
AB807,8,2525 1. Statutory provisions or rules prohibit disclosure of that portion.
AB807,9,2
12. The publication of that portion could cause the credit union predictable and
2substantial financial harm.
AB807,9,433. That portion contains nonpublic personal information, as defined in 12 CFR
41016.3
.
AB807,9,75 4. That portion contains information about credit union employees or officials
6the disclosure of which would constitute a clearly unwarranted invasion of personal
7privacy.
AB807,9,108 (e) A credit union may charge petitioners the direct and reasonable costs
9associated with search and duplication. The credit union may not charge for other
10costs, including indirect costs or attorney fees.
AB807,9,1711 (f) In the event of a dispute between a credit union and its members concerning
12a petition for inspection or the associated costs, either party may submit the dispute
13to the director of the office of credit unions. The director, after obtaining the views
14of both parties, shall direct the credit union either to withhold the disputed materials
15or to make them available for member inspection and copying. The director may
16place conditions upon release. The decision of the director is a final agency decision
17and is not appealable to the credit union review board.
AB807,18 18Section 18. DFI-CU 63.03 of the administrative code is amended to read:
AB807,9,25 19DFI-CU 63.03 Advance notice and approval required. Each credit union
20proposing to engage in an activity authorized under s. 186.113 (15), Stats., or
21proposing to change the place or manner in which it engages in such an activity, shall
22file with the director an application a written notice containing such information as
23the director may from time to time prescribe. If the director regularly receives
24information on additions, deletions or changes in locations of remote terminals from
25a supplier, a credit union is excused from filing an application a written notice merely

1to change the place at which it offers the services. No credit union may commence
2any such activity unless the place and manner in which the activity is conducted has
3been approved by the director in writing or the director does not take written
4objection to the credit union's completed application within 30 days after it has been
5filed
until the credit union has filed the written notice under this section. A credit
6union may not commence or continue to engage in any activity authorized under s.
7186.113 (15), Stats., if, in the opinion of the director, the activity is beyond the
8financial or management capabilities of the credit union, would result in unfair
9competition among financial institutions, or is otherwise in violation of this chapter.
AB807,19 10Section 19. DFI-CU 69.02 of the administrative code is amended to read:
AB807,10,13 11DFI-CU 69.02 Definition. In this chapter, "official" means any director,
12executive officer, loan officer, credit committee member or internal auditor of a credit
13union.
AB807,10,1414 (End)
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