AB569: Bill Text

The bill eliminates the authority of the review board to promulgate rules affecting credit union depositors or shareholders, leaving that authority to the commissioner, but permits the review board to promulgate rules concerning its procedure.

Credit union organization

The bill expands the information required to be included in the bylaws. Under the bill, a credit union's bylaws must include terms that describe the responsibilities and qualifications of directors, director nomination and election procedures, bond requirements for directors, meeting notice requirements and director removal procedures.

The bill permits a credit union to move its principal office within a 20-mile radius of its present location without obtaining the approval of its membership.

Under current law, upon the unanimous recommendation of the board of directors, the members may vote to dissolve the credit union. Under the bill, only the recommendation of two-thirds of the directors is required. Under current law, a credit union may vote to dissolve itself if the total number of members voting on the issue exceeds 50% of the total number of members eligible to vote and other conditions are satisfied. The bill reduces the total number of members needed for a valid dissolution vote to 25%.

Credit union membership

The bill modifies the requirements for eligibility for membership in a credit union. In addition to groups having a common bond of occupation or association, current law permits residents of well-defined neighborhoods, communities or rural districts, or employes of vicinal industries, to be eligible to join a credit union. Under the bill, individuals residing or employed in neighborhoods, communities, rural districts or multicounty regions, or employes of related industries, are eligible to join a credit union, in addition to groups having a common bond.

The bill permits a credit union to determine under its bylaws who is eligible for membership as a family member of a member. The bill also permits a credit union to expand its field of membership to states that border this state.

Under the bill, if a credit union expels a member for cause, a member has 90 days in which to appeal the expulsion. Current law does not specify a time for appeals.

Provisions regarding annual and special membership meetings are revised under the bill. The bill deletes certain specific provisions relating to the manner of calling meetings and permits a credit union to hold such meetings in any manner provided in the bylaws. Additionally, the types of issues that members may decide at a meeting are narrowed under the bill.

Board of directors and officers

The bill specifically gives the board of directors the general oversight responsibility and final decision-making authority for a credit union.

The bill directs the board to appoint a president of the credit union and any necessary committee. Currently, the board is directed to appoint credit committees, loan officers and other officers. Under the bill, most appointment authority is given to the president of the credit union.

Eligibility for, and election to, a board of directors of a credit union is to be determined under the bylaws in the bill. The bill creates specific criteria for removing a director from the board and creates an appeal mechanism for a director removed for cause from a board.

Under the bill, directors, officers and employes are required to take an oath of office. By taking an oath, credit union personnel agree to keep member information confidential and to avoid acting in matters in which they may have a pecuniary interest.

Current provisions relating to the bonding of credit union officers are eliminated under the bill and replaced with a requirement that a credit union maintain bonds for officers that satisfy standards set by the national board that administers the federal share (deposit) insurance fund for credit unions.

Loans to members and borrowing by credit unions

Current law specifies the value of collateral that may be used to secure a loan. The bill eliminates this restriction on collateral levels and authorizes the board of directors to set policies regarding acceptable collateral.

The bill expands the appeal rights of a person who has had a loan application turned down and requires a loan appeal to be in writing. The appeal may be made to the credit union's president and the president's decision may be appealed to the board of directors.

Under the bill, a credit union may engage in open-end, or credit card type, lending without the approval of the commissioner as is presently required. Credit unions may also participate in loans with other lenders if the loan is of the type that a credit union could make individually, subject to rules promulgated by the commissioner.

The bill permits a credit union to have a lien against the deposit accounts of a member and the right of setoff against those accounts to secure payment of loans made to the member.

Current law permits a credit union to borrow money if the amount borrowed does not exceed 50% of the credit union's total deposits and reserves and if the loan is for less than 12 months. The bill revises this provision by reducing the borrowing limit to 30% of total deposits and reserves and by eliminating the 12-month term requirement. The new 30% limit may be exceeded with commissioner approval.

Credit union powers

The bill specifies that a credit union may, with the commissioner's approval, establish branch offices inside or outside of this state. Currently, only in-state branch offices are referred to in the branch authorization provision. The bill also permits a credit union to establish service centers (offices at which some member services may be obtained but at which permanent records are not kept) upon notice to the commissioner.

The bill expands the authority of a credit union to offer safe deposit boxes, to provide debit cards, to make government-guaranteed loans and to make donations. The bill also expands a credit union's authority to sell and purchase assets and to dispose of dormant accounts.

Under present law, a credit union may offer products or services that other financial institutions offer if the commissioner finds the product or service to be financially related. The bill retains this authority but eliminates redundant provisions on this subject.

Reserve requirements and financial information

The present formula for establishing adequate reserve levels is eliminated in the bill and replaced by a requirement that a credit union set aside reserves at a level set by the national board that administers the federal share (deposit) insurance fund for credit unions.

The bill expands current provisions relating to annual audits of a credit union. The bill permits a board of directors to appoint an audit committee and permits the commissioner to order an independent audit of a credit union if the commissioner finds an annual audit to be unsatisfactory. In addition, the bill updates the provisions that require a credit union to file financial information annually with the commissioner.

Mergers

The bill revises the procedures for the merger of credit unions and deletes the use of the term "consolidation" in referring to mergers. The bill authorizes the commissioner to permit emergency mergers if one of the merging credit unions is insolvent or in danger of causing a loss to the federal share (deposit) insurance fund, without the affirmative vote of the membership of the merging credit union.

Other

The bill eliminates obsolete references to the American share deposit insurance corporation, repeals account disclosure provisions, eliminates gender-specific references and adds subsection titles throughout the credit union chapter.

For further information see the state fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB569, s. 1 Section 1. 186.01 (2) of the statutes is amended to read:

AB569,8,3 186.01 (2) "Credit union" means a cooperative, nonprofit corporation, incorporated under this chapter to encourage thrift among its members, create a source of credit and other financial services at a fair and reasonable rate of interest cost and provide an opportunity for its members to improve their economic and social conditions.

AB569, s. 2 Section 2. 186.01 (3) of the statutes is amended to read:

AB569,8,7 186.01 (3) "Deposit account" means an account limited to members and treated as a any form of savings. Deposit accounts are subject to conditions established by the board of directors.

AB569, s. 3 Section 3. 186.01 (3c) of the statutes is created to read:

AB569,8,10 186.01 (3c) "Federal share insurance" means the national credit union share insurance fund under 12 USC 1783.

AB569, s. 4 Section 4. 186.01 (3g) of the statutes is created to read:

AB569,8,12 186.01 (3g) "Fixed assets" has the meaning given in 12 CFR 701.36 (b).

AB569, s. 5 Section 5. 186.01 (3m) of the statutes is amended to read:

AB569,8,17 186.01 (3m) "National board" means the national credit union administration board of the national credit union administration established under 12 USC 1752 or the managing body of any successor that is authorized to provide federal share insurance for state-chartered credit unions.

AB569, s. 6 Section 6. 186.01 (4) of the statutes is repealed.

AB569, s. 7 Section 7. 186.01 (4m) of the statutes is created to read:

AB569,8,21 186.01 (4m) "Public depositor" means a governmental body, as defined in s. 895.52 (1) (a), that deposits money in a public depository.

AB569, s. 8 Section 8. 186.01 (5) of the statutes is amended to read:

AB569,8,24 186.01 (5) "Regular reserve" means the an irrevocable reserve set aside to cover losses.

AB569, s. 9 Section 9. 186.01 (6) of the statutes is repealed and recreated to read:

AB569,9,1 186.01 (6) "Risk assets" has the meaning given in 12 CFR 700.1 (i).

AB569, s. 10 Section 10. 186.01 (7) of the statutes is repealed.

AB569, s. 11 Section 11. 186.01 (7m) of the statutes is created to read:

AB569,9,6 186.01 (7m) "Share deposit" means a balance that is established and maintained by a person at a credit union that confers membership rights to that person.

AB569, s. 12 Section 12. 186.01 (8) of the statutes is repealed.

AB569, s. 13 Section 13. 186.012 (title) of the statutes is renumbered 186.235 (title) and amended to read:

AB569,9,11 186.235 (title) Commissioner Office of the commissioner of credit unions.

AB569, s. 14 Section 14. 186.012 (1) of the statutes is renumbered 186.235 (1m) and amended to read:

AB569,9,24 186.235 (1m) (title) Deputy commissioner. The commissioner shall appoint a deputy commissioner subject to s. 15.04 (2) and (3) who. The deputy commissioner shall possess all powers and perform the duties attached to the office of the commissioner during a vacancy thereof and during the absence or inability of the commissioner to serve. No person may be appointed deputy commissioner who has not had at least one year of actual experience either in the operation of a credit union, or serving in a credit union supervisory capacity, or a combination of both. The commissioner may also employ such examiners and clerks to assist him or her and the deputy in the discharge of the several duties imposed upon of the commissioner by under this chapter as he or she finds necessary, and who shall perform such other duties as the commissioner directs.

AB569, s. 15 Section 15. 186.012 (2) of the statutes is renumbered 186.235 (2) and amended to read:

AB569,10,4 186.235 (2) (title) Enforcement. The commissioner of credit unions shall enforce the laws of this chapter and other laws relating to credit unions.

AB569, s. 16 Section 16. 186.012 (3) of the statutes is repealed.

AB569, s. 17 Section 17. 186.012 (4) of the statutes is renumbered 186.235 (21).

AB569, s. 18 Section 18. 186.015 (1) of the statutes is amended to read:

AB569,10,13 186.015 (1) (title) Confer with commissioner. The commissioner shall confer with the credit union review board on matters affecting credit unions and the commissioner's office of the commissioner. Detailed minutes of each review board meeting shall be kept, and the decision of the review board with reference to all orders issued, or policies established by the commissioner pursuant to this chapter is final, except for judicial review as provided in ch. 227.

AB569, s. 19 Section 19. 186.015 (1) of the statutes, as affected by 1995 Wisconsin Acts 27 and .... (this act), is repealed and recreated to read:

AB569,10,21 186.015 (1) Confer with office. The office of credit unions shall confer with the credit union review board on matters affecting credit unions and the office. Detailed minutes of each review board meeting shall be kept, and the decision of the review board with reference to all orders issued, or policies established by the office of credit unions pursuant to this chapter is final, except for judicial review as provided in ch. 227.

AB569, s. 20 Section 20. 186.015 (2) of the statutes is renumbered 186.015 (2) (intro.) and amended to read:

AB569,10,25 186.015 (2) (title) Duties. (intro.) The review board shall advise do all of the following:

AB569,11,2 (a) Advise the commissioner, the deputy commissioner and others in improving the condition and service of credit unions. In addition, the board shall review

AB569,11,4 (b) Review the acts and decisions of the commissioner in relation to credit unions and shall serve and conduct reviews under sub. (5).

AB569,11,6 (d) Serve as an appeal board for credit unions with the same procedure and powers as the banking review board has under ch. 220 and perform.

AB569,11,8 (e) Perform other credit union review functions in relation to credit unions as provided by law. The board may issue subpoenas or rule.

AB569,11,10 (f) Conduct hearings, take testimony, issue subpoenas and administer oaths to witnesses.

AB569, s. 21 Section 21. 186.015 (2) (a) and (b) of the statutes, as affected by 1995 Wisconsin Act .... (this act), are amended to read:

AB569,11,14 186.015 (2) (a) Advise the commissioner, the deputy commissioner office of credit unions and others in improving the condition and service of credit unions.

AB569,11,16 (b) Review the acts and decisions of the commissioner office of credit unions and conduct reviews under sub. (5).

AB569, s. 22 Section 22. 186.015 (2) (c) of the statutes is created to read:

AB569,11,19 186.015 (2) (c) Respond promptly on credit union matters and to questions submitted to the review board by the commissioner or by a credit union.

AB569, s. 23 Section 23. 186.015 (2) (c) of the statutes, as created by 1995 Wisconsin Act .... (this act), is amended to read:

AB569,11,24 186.015 (2) (c) Respond promptly on credit union matters and to questions submitted to the review board by the commissioner office of credit unions or by a credit union.

AB569, s. 24 Section 24. 186.015 (3) (a) of the statutes is renumbered 186.015 (3) and amended to read:

AB569,12,5 186.015 (3) (title) Approval of actions. The review board may require the commissioner to submit any of the commissioner's official actions to the review board for its approval. The board may make rules of procedure as provided in ch. 227.

AB569, s. 25 Section 25. 186.015 (3) of the statutes, as affected by 1995 Wisconsin Act .... (this act), is amended to read:

AB569,12,10 186.015 (3) Approval of actions. The review board may require the commissioner office of credit unions to submit any of the commissioner's office's official actions to the review board for its approval.

AB569, s. 26 Section 26. 186.015 (3) (b) of the statutes is renumbered 186.015 (5) and amended to read:

AB569,13,9 186.015 (5) (title) Reviews. Any interested person aggrieved by any act, order or determination of the commissioner that relates to credit unions may, within 60 days after the date of the act, order or determination, apply for review thereof by filing a petition with the secretary of the board within 30 days after the act, order or determination to be reviewed. The petition shall state the nature of the petitioner's interest, facts showing that the petitioner is aggrieved and directly affected by the act, order or determination to be reviewed and the ground or grounds upon which the petitioner claims that the act, order or determination should be modified or reversed. The issues raised by the petition for review shall be considered by the board upon giving at least 10 days' written notice of the time and place when said matter will be heard to the commissioner and the person applying for review or the applying person's attorney and upon any other person who participated in the proceedings before the commissioner or that other person's attorney. Notice of hearing may be given by registered mail, return receipt requested, and the return receipt signed by the addressee or the addressee's agent shall be presumptive evidence that such notice was received by the addressee on the day stated on the receipt. Any other interested party shall have the right to appear in any proceeding before by the review board. The review board shall determine if the commissioner acted within the scope of the commissioner's authority, has not acted in an arbitrary or capricious manner and has based the act, order or determination on evidence supported by the record. The review board shall dispose of a review application within 60 days after the date on which it is received.