Wisconsin Legislature: 151,244

(b) In lieu Instead of an annual examination of a credit union under par. (a), the commissioner may accept an audit report of the condition of the credit union made by a certified public accountant not an employe of the credit union in accordance with rules promulgated by the commissioner. The cost of the audit shall be paid by the credit union. A copy of each audit under this paragraph shall be furnished to the Wisconsin credit union savings insurance corporation if the credit union's savings are protected or guaranteed by the Wisconsin credit union savings insurance corporation or may accept an examination or audit made or approved by the national board.

151,236 Section 236 . 186.26 (2) of the statutes is repealed.

151,237 Section 237 . 186.27 (title) of the statutes is renumbered 186.235 (7) (title).

151,238 Section 238 . 186.27 (intro.), (1) and (2) of the statutes are renumbered 186.235 (7) (a) (intro.), 1. and 2. and amended to read:

186.235 (7) (a) (intro.) The commissioner, all other officers and employes of the office of the commissioner, and members of the review board shall keep secret all the facts and information obtained in the course of examinations, except in any of the following situations:

1. So far as If the public duty of such the person requires the that person to report upon or take special action regarding the affairs of any credit union; or.

2. When If the person is called as a witness in any criminal proceeding or trial in a court of justice; or.

151,239 Section 239 . 186.27 (3) of the statutes is renumbered 186.235 (7) (b) and amended to read:

186.235 (7) (b) The Notwithstanding par. (a) and unless otherwise provided by rule, the commissioner may do any of the following:

1. Furnish to the national board or any official or examiner of it a copy of any examination made by the commissioner's office of any credit union or of any report made by the credit union.

2. Give access to and disclose to the national board or any official or examiner of it any information possessed by the commissioner about the conditions or affairs of any credit union whose savings are insured by the national board federal share insurance.

151,240 Section 240 . 186.28 of the statutes is renumbered 186.235 (18) and amended to read:

186.235 (18) (title) Bookkeeping; forfeiture for failure to obey commissioner Record-keeping and accounting procedure. (a) A credit union shall open and keep accurate and convenient records of its transactions and accounts in a manner consistent with generally accepted accounting principles or with standards prescribed by the commissioner. If the commissioner determines that a credit union does not keep its books records and accounts in a manner which enables the commissioner to readily ascertain the true condition of the credit union consistent with generally accepted accounting principles, the commissioner may require any officer of the credit union to open and keep such books or records and accounts as under standards prescribed by the commissioner may prescribe in order to remedy the deficiency.

(b) Any The commissioner may require a credit union that refuses or neglects fails to open records or maintain books prescribed records or accounts in the manner prescribed under sub. (1) shall be subject, upon written notification of the commissioner, to a forfeiture not to exceed $10 to forfeit not more than $100 for each day it is in violation. If any the credit union fails or refuses to pay the forfeiture, the commissioner may institute proceedings to enforce its collection recover the forfeiture.

151,241 Section 241 . 186.29 (title) of the statutes is renumbered 186.235 (11) (title).

151,242 Section 242 . 186.29 (1) (intro.), (a) to (c), (e) and (g) to (k) of the statutes are renumbered 186.235 (11) (a) (intro.) and 1. to 9. and amended to read:

186.235 (11) (a) Conditions for taking possession. (intro.) The commissioner may forthwith take possession and control of the business and property of any credit union to which this chapter is applicable whenever the commissioner finds a if the credit union violating violates this chapter or that if the credit union does any of the following:

1. Is conducting Conducts its business contrary to law; or.

2. Has violated Violates its charter, or any law; or.

3. Is conducting Conducts its business in an unauthorized or unsafe manner; or.

4. Has an impairment of its capital; or.

5. Has suspended Suspends payment of its obligations; or.

6. Has neglected or refused Neglects or refuses to comply with the terms of a duly issued an order of the commissioner; or.

7. Has refused Refuses to submit its books, papers, records, accounts or affairs for inspection to any a credit union examiner; or.

8. Has refused Refuses to be examined upon oath regarding its affairs.

9. Has been given Receives notice of intent to terminate insured status by the national board.

151,243 Section 243 . 186.29 (1) (d) and (f) of the statutes are repealed.

151,244 Section 244 . 186.29 (1m) of the statutes is renumbered 186.235 (11) (b) and amended to read:

186.235 (11) (b) Suspension. 1. The commissioner may suspend, for a period of up to 120 days, the business or an officer, director, committee member or employe of a credit union from engaging in credit union business if the commissioner finds the existence of any condition under sub. (1) (a) to (k) par. (a) 1. to 9. The commissioner may renew a suspension under this paragraph subdivision any number of times and for periods of up to 120 days if the commissioner finds that the condition or conditions continue to exist.

2. The commissioner shall suspend the business of a credit union, other than a corporate central credit union, if the credit union does not comply with s. 186.34 (2) (a). The commissioner shall then liquidate the credit union under this section unless the credit union files a complete application for federal share insurance from the national board within 30 days after the date the suspension under this paragraph commences. The commissioner shall authorize a credit union to resume its business if it files an application within the time period specified in this paragraph.

151,245 Section 245 . 186.29 (1p) (title) of the statutes is renumbered 186.235 (11) (c) (title).

151,246 Section 246 . 186.29 (1p) (a) (title) of the statutes is repealed.

151,247 Section 247 . 186.29 (1p) (a) of the statutes is renumbered 186.235 (11) (c) 1. and amended to read:

186.235 (11) (c) 1. The commissioner may take possession of the business and property of a credit union if the commissioner finds the existence of any condition under sub. (1) (a) to (k) par. (a) 1. to 9.

151,248 Section 248 . 186.29 (1p) (b) (title) of the statutes is repealed.

151,249 Section 249 . 186.29 (1p) (b) of the statutes is renumbered 186.235 (11) (c) 2. and amended to read:

186.235 (11) (c) 2. The commissioner shall take possession of the business and property of a credit union that violates s. 186.34 (2) (b), unless the commissioner approves a consolidation merger under s. 186.31, and of a credit union that the commissioner is required to liquidate under sub. (1m) (b).

151,250 Section 250 . 186.29 (2) (intro.) and (a) of the statutes are renumbered 186.235 (11) (d) (intro.) and 1. and amended to read:

186.235 (11) (d) Procedure on taking possession. (intro.) Upon taking possession of the business and property of any such a credit union , the commissioner shall forthwith:

1. Serve a notice in writing upon the president and secretary of said the credit union setting forth therein stating that the commissioner has taken possession and control of the business and property of said the credit union. Said The notice shall be executed in duplicate, and immediately after the same has been served service, one of the said notices shall be filed with the clerk of the circuit court of the county where said in which the credit union is located together with proof of service.

151,251 Section 251 . 186.29 (2) (b) of the statutes is renumbered 186.235 (11) (d) 2. and amended to read:

186.235 (11) (d) 2. Give notice to all individuals, partnerships, corporations, limited liability companies and associations known to the commissioner to be holding or in possession of any assets of such the credit union.

151,252 Section 252 . 186.29 (2) (c) of the statutes is renumbered 186.235 (11) (dg) and amended to read:

186.235 (11) (dg) (title) Special deputy commissioners. The commissioner may appoint one or more special deputy commissioners as agent to assist in the duty of liquidation and distribution of the assets of one or more credit unions of whose business and property the commissioner shall have taken possession pursuant to the provisions of this chapter holds. A certificate of such appointment shall be filed in the office of the commissioner and a certified copy in the office of the clerk of the circuit court for the county in which such the credit union is located. The commissioner may employ such counsel and procure such expert assistance and advice as may be necessary in the liquidation and distribution of the assets of such the credit union, and may retain such of the any officers or employes of such the credit union as that the commissioner deems considers to be necessary. The special deputy commissioner and assistants shall furnish such security for the faithful discharge of their duties as in an amount that the commissioner deems proper. Such considers to be necessary. The special deputy commissioner may execute, acknowledge and deliver any and all deeds, assignments, releases or other instruments necessary and proper to effect any sale and transfer or incumbrance of real estate or personal property and may borrow money for use in the liquidation after the same liquidation has been approved by the commissioner and an order obtained from the circuit court of the county in which said the credit union is located as hereinafter provided.

151,253 Section 253 . 186.29 (2) (d) of the statutes is renumbered 186.235 (11) (dr) and amended to read:

186.235 (11) (dr) (title) Special deputy commissioner duties. Upon taking possession of the property and business of such the credit union, the special deputy commissioner is authorized to collect all moneys due to such the credit union, and to do such other acts as are necessary to conserve its assets and business, and shall proceed to liquidate the affairs thereof as hereinafter provided of the credit union. The special deputy commissioner shall collect all debts due and claims belonging to it the credit union, and upon a petition approved by the commissioner and upon order of the circuit court of the county in which such the credit union is located, may sell or compound all bad or doubtful debts, or do any act or execute any other necessary instruments and upon like petition and order may sell all the real and personal property of such the credit union on such terms as the court shall approve. Such special deputy commissioner may, if necessary, enforce individual liability of the stockholders to pay the debts of such corporation.

151,254 Section 254 . 186.29 (3) of the statutes is renumbered 186.235 (11) (e) and amended to read:

186.235 (11) (e) Notice, allowance and payment of claims. The special deputy commissioner shall cause publish a class 3 notice, under ch. 985, to be published, calling on all persons who may have claims a claim against such the credit union , to present the same claim to the special deputy commissioner and make legal proof thereof of the claim at a place and within a time, not earlier than the last day of publication, to be therein specified in the notice. The special deputy commissioner shall mail a similar notice to all persons, at their last-known address, whose names appear as creditors upon the books of the credit union. Proof of service of such the notice shall be filed with the clerk of said court. The special deputy commissioner may reject any claim. Any party interested may also file written objections to any claim with the special deputy commissioner and, after notice by registered mail of such the rejection, said the claimant shall be barred unless the claimant commences an action thereon on the claim within 3 months. Claims presented after the expiration of the time fixed in the notice to creditors shall be entitled to an equitable share in from the distribution only to the extent of the any assets then remaining in the hands of the special deputy commissioner equitably applicable thereto after properly filed claims have been paid.

151,255 Section 255 . 186.29 (4) of the statutes is renumbered 186.235 (11) (f) and amended to read:

186.235 (11) (f) Inventory of assets and statement of liabilities. Upon taking possession of the property and assets of such the credit union, the special deputy commissioner shall make an inventory of the assets of such the credit union, in duplicate, one to be filed in the office of the commissioner and one in the office of the clerk of circuit court for the county in which such the credit union is located. Upon the expiration of the time fixed for the presentation of claims, the special deputy commissioner shall make in duplicate a full and complete list of the claims presented, including and specifying such the claims as have been rejected by the special deputy commissioner, one to be filed in the office of the commissioner, and one in the office of the clerk of circuit court for the county in which such the credit union is located. Such The inventory and list of claims shall be open at all reasonable times to inspection.

151,256 Section 256 . 186.29 (5) of the statutes is renumbered 186.235 (11) (g) and amended to read:

186.235 (11) (g) Adjustment of loans and withdrawal value of shares. The value of shares pledged upon a loan to the credit union shall be applied and credited to the loan and the borrower shall be liable only for the balance. The rate of interest charged upon the balance shall be the legal rate. The value shall be determined in such manner as the commissioner prescribes, and shall be made under s. 186.30 (1) and (3), or in such other manner as the commissioner may prescribe. Upon the approval of the value by the commissioner and the circuit court of the county in which the credit union is located, the book value of each member shall may be reduced proportionately. At least 5 days' written notice of the determination of value shall be given to all shareholders of the time and place the value shall be submitted to the circuit court for approval. Approval of the circuit court shall be by an order entered under s. 807.11 (2). Any stockholder or creditor of the credit union aggrieved by the determination of value may appeal to the court of appeals.

151,257 Section 257 . 186.29 (6) of the statutes is renumbered 186.235 (11) (h) and amended to read:

186.235 (11) (h) Compensation and expenses in connection with liquidation. The compensation of the special deputy commissioners, counsel and other employes and assistants, and all expenses of supervision and liquidation shall be fixed by the commissioner, subject to the approval of the circuit court for the county in which the credit union is located, and shall upon the certificate of the commissioner be paid out of the funds of the credit union. Expenses of supervision and liquidation include the cost of the services rendered by the office of the commissioner to the credit union being liquidated. The cost of these services shall be determined by the commissioner and paid to the office of the commissioner from the assets of the credit union as other expenses of liquidation are paid. The moneys collected by the special deputy commissioner shall be deposited in one or more a corporate central credit unions union, and, in case of the suspension or insolvency of a depository, such deposits shall be preferred before all other deposits.

151,258 Section 258 . 186.29 (7) of the statutes is renumbered 186.235 (11) (i) and amended to read:

186.235 (11) (i) Liquidating dividends. At any time after the expiration of the date fixed for the presentation of claims, the special deputy commissioner in charge of the liquidation of such the credit union may, upon a petition approved by the commissioner and an order of the circuit court of the county in which such the credit union is located, out of the funds remaining, after the payment of expenses and debts, declare one or more dividends, and may declare a final dividend, such dividend to be paid to such persons, and in such amounts as may be directed by the circuit court.

151,259 Section 259 . 186.29 (8) of the statutes is renumbered 186.235 (11) (j) and amended to read:

186.235 (11) (j) Title passes to commissioner. Immediately upon filing the notice as provided for in sub. (2) under par. (d), the possession of all assets and property of such the credit union of every kind and nature, wheresoever situated shall be deemed considered to be transferred from such the credit union to, and assumed by the commissioner; and. The filing of the notice mentioned herein, shall of itself, and without the execution or delivery of any instruments of conveyance, assignment, transfer or indorsement endorsement, vest the title to all such assets and property in the commissioner. Such The filing shall also operate as a bar to any attachment, garnishment, execution or other legal proceedings against such the credit union, or its assets and property, or its liabilities.

151,260 Section 260 . 186.29 (9) of the statutes is renumbered 186.235 (11) (k).

151,261 Section 261 . 186.29 (10) of the statutes is renumbered 186.235 (11) (L) and amended to read:

186.235 (11) (L) Appeal. Whenever any such If a credit union, whose property and business the commissioner has taken possession of, as aforesaid, deems considers itself aggrieved thereby by the commissioner's action, it may, at any time within 10 30 days after such the date of the taking, appeal to the credit union review board for relief from such the possession by the commissioner. In the event If the credit union review board sustains the commissioner, the said credit union may then, at any time within 10 30 days after the decision of the credit union review board, apply to the circuit court of the county in which such the credit union is located to enjoin further proceedings; and said. The court, after citing the commissioner to show cause why further proceedings should not be enjoined and after hearing all allegations and proofs of the parties and determining the facts, may, upon the merits dismiss such the application or enjoin the commissioner from further proceedings, and may direct it the commissioner to surrender such the business and property to such the credit union.

151,262 Section 262 . 186.29 (11) (intro.) and (a) to (d) of the statutes are renumbered 186.235 (11) (m) (intro.), 1., 2., 4. and 5. and amended to read:

186.235 (11) (m) Reinstatement. (intro.) Whenever After the commissioner shall have taken takes over the possession and control of the business and property of any a credit union, the same credit union may resume business when and if all of the following apply:

1. The owners of at least two-thirds of such the credit union dollar value of outstanding shares, execute a petition to such effect resume business, the form of which petition shall be prescribed by the commissioner , and.

2. There is submitted to the commissioner by such the shareholders, or a committee duly selected by them, a plan for the reorganization and reinstatement of such the credit union, and.

4. The commissioner recommends that control of the business and property of such the credit union be returned to the shareholders, and.

5. The court in which such the liquidation is pending, upon application of the commissioner, makes an order approving the commissioner's recommendations, which order shall contain a finding that such the credit union will be in a safe and sound condition when control is resumed by the shareholders.

151,263 Section 263 . 186.29 (12) of the statutes is renumbered 186.235 (11) (n) and amended to read:

186.235 (11) (n) Reinstatement upon restricted basis. Such In addition to the procedure under par. (m), a credit union may also resume business upon a restricted basis, and upon such limitations and conditions as may be prescribed by the commissioner when approved by the circuit court in and for the county in which such the credit union is located, upon application of the commissioner. Such The restrictions and conditions may include, among others, a prohibition against the selling of new shares, reasonable restrictions upon withdrawals and the payment of other liabilities. Such On approval, the credit union shall thereupon be relieved from the control and supervision of the commissioner as provided in this section, but nothing herein shall, in any manner, the approval does not prohibit the commissioner from again proceeding against such the credit union as provided herein if conditions warrant the commissioner's action.

151,264 Section 264 . 186.29 (13) of the statutes is renumbered 186.235 (11) (p) and amended to read:

186.235 (11) (p) Liquidating dividends and unclaimed funds. 1. The special deputy commissioner shall deposit unclaimed liquidating dividends and unclaimed funds remaining unpaid in the hands of the special deputy commissioner for 6 months after the order for final distribution in one or more a corporate central credit unions union in the commissioner's name in trust for the shareholders and creditors of the liquidated credit union. The commissioner shall annually report to the governor and the chief clerk of each house of legislature for distribution to the legislature under s. 13.172 (2) the names of credit unions of which the commissioner has taken possession and liquidated, and the sums of unclaimed and unpaid liquidating dividends and unclaimed funds with respect to each of the credit unions respectively, including and include a statement of interest earned upon such those funds.

2. The commissioner may pay over the moneys so funds held by the commissioner under subd. 1. to the persons respectively entitled thereto to the funds, upon being furnished satisfactory evidence of their right to the same funds. In case of doubt or conflicting claims, the commissioner may require an order of the circuit court authorizing and directing the payment thereof. The commissioner may apply the interest earned by the moneys so held by the commissioner towards funds toward defraying the expenses in the payment and distribution of such unclaimed liquidating dividends and unclaimed funds to the stockholders and creditors entitled to receive the same dividends and funds.

3. After one One year from after the time date of the order for final distribution, the commissioner shall report and deliver to the state treasurer all unclaimed funds as provided in ch. 177. All claims subsequently arising shall be presented to the commissioner. If the commissioner determines that any claim should be allowed, he or she the commissioner shall certify to the department of administration the name and address of the person entitled to payment and the amount thereof of the payment and shall attach the claim to the certificate. The department of administration shall certify the claim to the state treasurer for payment.

151,265 Section 265 . 186.30 of the statutes is repealed.

151,266 Section 266 . 186.31 of the statutes is amended to read:

186.31 (title) Consolidation of credit unions Mergers. (1) (title) Transfer of assets and liabilities. Any credit union, which is in good faith winding up its business for the purpose of consolidating merging with some other another credit union, may transfer its assets and liabilities to the credit union with which it is in the process of consolidation merging; but no consolidation merger may be made without the consent of the commissioner, and not then to defeat or defraud any of its creditors in the collection of debts against such credit union. No consolidation may be carried out without the consent of the Wisconsin credit union savings insurance corporation if it protects or guarantees the accounts of any credit union participating in the consolidation, or the national board if it insures the shares of any credit union participating in the consolidation.

(2) (title) Approval. With the approval of the commissioner credit unions may consolidate. To effect a consolidation merger, the board of directors of each consolidating credit union shall, by resolution, propose a specific plan for consolidation merger which shall be agreed to by a majority of the board of each credit union joining in the consolidation and directing that the merger. The proposed merger plan of consolidation shall be submitted to a vote at a an annual or special meeting of members of the merging credit unions being absorbed which may be either an annual or a special meeting union. Written notice of the meeting setting forth the proposed plan of consolidation merger or a summary shall be given to each member of the merging credit unions being absorbed union within the time and in the manner provided for the giving of notice of meetings of members of the credit union. The proposed plan shall be adopted upon receiving a majority of the votes entitled to be cast by members present at the meeting.

(3) (title) Rights transferred. The credit union consolidating merging with another credit union under the subs. (1) and (2) shall not be required to go into liquidation but its assets and liabilities shall be reported by the credit union with which it has consolidated merged, and all the rights, franchises and interests of said the merging credit union so consolidated in and to any species of property, personal and mixed, and choses in action thereto belonging, to the credit union shall be deemed considered to be transferred, and the said consolidated resulting credit union shall hold and enjoy the same and all rights of property, franchises and interest in the same manner and to the same extent as was held and enjoyed by the merging credit union so consolidated therewith; and the. The members or shareholders of such absorbed the merging credit union shall without any further act on their part be members and shareholders of such consolidated the resulting credit union and be subject to all rights, privileges and duties as provided for in the bylaws of the resulting credit union which has so absorbed their credit union.

151,267 Section 267 . 186.31 (1) of the statutes, as affected by 1995 Wisconsin Acts 27 and .... (this act), is repealed and recreated to read:

186.31 (1) Transfer of assets and liabilities. Any credit union, which is in good faith winding up its business for the purpose of merging with another credit union, may transfer its assets and liabilities to the credit union with which it is in the process of merging; but no merger may be made without the consent of the office of credit unions, and not then to defeat or defraud any of its creditors in the collection of debts against such credit union.

151,268 Section 268 . 186.31 (2) of the statutes, as affected by 1995 Wisconsin Acts 27 and .... (this act), is repealed and recreated to read:

186.31 (2) Approval. To effect a merger, the board of directors of each credit union shall, by resolution, propose a specific plan for merger which shall be agreed to by a majority of the board of each credit union joining in the merger. The proposed merger plan shall be submitted to a vote at an annual or special meeting of members of the merging credit union. Written notice of the meeting setting forth the proposed plan of merger or a summary shall be given to each member of the merging credit union within the time and in the manner provided for the giving of notice of meetings of members of the credit union. The proposed plan shall be adopted upon receiving a majority of the votes entitled to be cast by members present at the meeting.

151,269 Section 269 . 186.31 (2m) of the statutes is created to read:

186.31 (2m) Emergency merger. Notwithstanding sub. (2), if the commissioner determines that the merging credit union is in danger of insolvency, and that the proposed merger would reduce or avoid a threatened loss to federal share insurance, the commissioner may permit the merger to become effective without an affirmative vote of the membership of the merging credit union.

151,270 Section 270 . 186.31 (2m) of the statutes, as created by 1995 Wisconsin Act .... (this act), is amended to read:

186.31 (2m) Emergency merger. Notwithstanding sub. (2), if the commissioner office of credit unions determines that the merging credit union is in danger of insolvency, and that the proposed merger would reduce or avoid a threatened loss to federal share insurance, the commissioner office of credit unions may permit the merger to become effective without an affirmative vote of the membership of the merging credit union.

151,271 Section 271 . 186.314 of the statutes is amended to read:

186.314 Conversion. A credit union chartered under this chapter may be converted convert to a federal credit union by complying with the following:

(1) The proposition for a conversion shall first be approved by unanimous recommendation of the directors of the credit union. The directors shall set a date for a vote by the members on the conversion. Written notice specifying the reason for conversion and the date set for the vote shall be delivered in person or mailed to each member at the address for such member appearing on the records of the credit union, not more than 30 45 days nor less than 7 15 days prior to such date before the meeting. A majority of the members voting, in person or in writing, may approve the proposition for conversion, provided not more than 15 members or 10% of the total membership, whichever is greater, object by written notice , object.