3) Investment powers: A universal bank may purchase, sell, underwrite, and
hold investment securities, consistent with safe and sound banking practices, in an
amount up to 100% of the universal bank's capital. Investment securities include
commercial paper; banker's acceptances; marketable securities in the form of bonds,
notes, and debentures; and similar instruments. A universal bank may not invest
greater than 20% of its capital in any one obligor or issuer. A universal bank may
purchase, sell, underwrite, and hold equity securities, consistent with safe and
sound banking practices, in an amount up to 20% of the universal bank's capital,
unless the division of banking approves a greater percentage. A universal bank may

also invest in certain housing properties and projects, except that the total
investment in any one project may not exceed 15% of the universal bank's capital and
except that the total amount invested in housing properties and projects may not
exceed 50% of the universal bank's capital. A universal bank may take equity
positions in profit-participation projects, including projects funded through loans
from the universal bank, in an aggregate amount not to exceed 20% of the universal
bank's capital. The division of banking may suspend a universal bank's authority to
invest in profit-participation projects.
The bill permits a universal bank to invest without limitation in certain types
of securities, including: 1) obligations of certain federal agencies or federally
chartered corporations and associations; 2) deposit accounts or insured obligations
of insured financial institutions; 3) securities of certain business development
corporations and urban renewal investment corporations; 4) certain securities of
bank insurance companies; 5) securities of certain corporations operating automated
teller machines; 6) securities of service corporation subsidiaries of the universal
bank; 7) advances of federal funds; 8) risk management instruments, including
financial futures transactions, financial operations transactions, and forward
commitments, but solely for the purpose of reducing, hedging, or otherwise
managing its interest rate risk exposure; 9) securities of subsidiaries exercising
certain fiduciary powers; and 10) securities of agricultural credit corporations. A
universal bank may invest in other financial institutions. The investment powers
of a universal bank may be exercised directly or indirectly through a subsidiary,
unless the division of banking requires the investment to be made through a
subsidiary to limit the risk exposure of the universal bank. The bill contains specific
provisions governing the purchase by a universal bank of its own stock and of stock
in banks and bank holding companies.
4) Deposit and trust powers: The bill permits a universal bank to establish the
types and terms of deposits that the universal bank will solicit and accept. A
universal bank may pledge its assets as security for deposits. With the approval of
the division of banking, a universal bank may securitize its assets for sale to the
public, subject to any procedures established by the division of banking. A universal
bank may exercise safe deposit powers and have a lien for its safekeeping charges
on the contents of property accepted for safekeeping. If these charges remain unpaid
for two years or if property accepted for safekeeping is not called for within two years,
a universal bank may sell the property at public auction. The bill authorizes a
universal bank to exercise the same trust powers that trust company banks are
permitted to exercise under current law.
5) Incidental and related powers: Under the bill, a universal bank may exercise
all powers necessary or convenient to effect the purposes for which the universal
bank is organized or to further the businesses in which the universal bank is lawfully
engaged. Current law does not have a similar provision.
In addition to these necessary or convenient powers, the bill allows a universal
bank to engage in activities that are reasonably related or incident to the purposes
of the universal bank. With certain exceptions, a universal bank may engage in these
activities either directly or indirectly through a subsidiary. Under the bill, any

activity permitted under the federal Bank Holding Act satisfies the reasonably
related or incidental criterion. The bill also contains a list of specific activities that
meet the reasonably related or incidental criterion. The listed activities include: 1)
business and professional services; 2) data processing; 3) courier and messenger
services; 4) credit-related activities; 5) consumer services; 6) real estate-related
services; 7) insurance services, other than insurance underwriting; 8) securities
brokerage; 9) investment advice; 10) securities and bond underwriting; 11) mutual
fund activities; 12) financial consulting; 13) tax planning and preparation; 14)
community development and charitable activities; and 15) debt cancellation
contracts.
A universal bank may also engage in activities that the division of banking
determines by rule are reasonably related or incidental to these listed activities. In
addition, the division of banking, by rule, may determine that other activities are
reasonably related or incidental activities. In promulgating these rules, the division
of banking need not follow the standard notice, hearing, and publication
requirements that generally apply to administrative rule making.
A universal bank must give 60 days' prior written notice to the division of
banking of the universal bank's intention to exercise a necessary or convenient power
or to engage in a reasonably related or incidental activity. The division of banking
may deny a universal bank the authority to exercise a necessary or convenient power
or to engage in a reasonably related or incidental activity, other than an activity that
is contained in the specific list of reasonably related or incidental activities, if the
division of banking determines that the activity is not a reasonably related or
incidental activity, that the financial institution is not well-capitalized, that the
financial institution is the subject of an enforcement action, or that the financial
institution does not have sufficient management expertise for the activity. The
division of banking may also require a universal bank to engage in certain of these
activities through a subsidiary, with appropriate safeguards to limit the risk
exposure of the universal bank. Amounts invested in a single subsidiary that
engages in these activities may not exceed 20% of the universal bank's capital, unless
a higher percentage is approved by the division of banking.
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:
AB299, s. 1 1Section 1. 93.01 (1m) of the statutes is amended to read:
AB299,9,42 93.01 (1m) "Business" includes any business, except that of banks, savings
3banks, credit unions, savings and loan associations , and insurance companies.
4"Business" includes public utilities and telecommunications carriers to the extent

1that their activities, beyond registration, notice, and reporting activities, are not
2regulated by the public service commission and includes public utility and
3telecommunications carrier methods of competition or trade and advertising
4practices that are exempt from regulation by the public service commission under s.
5196.195, 196.196, 196.202, 196.203, 196.219, or 196.499 or by other action of the
6commission.
AB299, s. 2 7Section 2. 186.01 (2) of the statutes is amended to read:
AB299,10,128 186.01 (2) "Credit union" means, except as specifically provided under ss.
9186.41 (1) and 186.45 (1),
a cooperative, nonprofit corporation, incorporated under
10this chapter to encourage thrift among its members, create a source of credit at a fair
11and reasonable cost, and provide an opportunity for its members to improve their
12economic and social conditions.
AB299, s. 3 13Section 3. 186.02 (2) (a) 1. of the statutes is amended to read:
AB299,10,1514 186.02 (2) (a) 1. The conditions of residence or occupation which qualify persons
15that determine eligibility for membership.
AB299, s. 4 16Section 4. 186.02 (2) (b) 2. of the statutes is amended to read:
AB299,10,2417 186.02 (2) (b) 2. Residents Except as otherwise provided in this subdivision,
18individuals who reside or are employed
within a well-defined neighborhood,
19community or rural district
and contiguous neighborhoods and communities. If the
20office of credit unions, subsequent to a credit union merger, determines that it would
21be inappropriate under the circumstances to require members of the credit union
22that results from the merger to reside or be employed in contiguous neighborhoods
23and communities, the requirement that these neighborhoods and communities be
24contiguous does not apply
.
AB299, s. 5 25Section 5. 186.02 (2) (b) 2m. of the statutes is created to read:
AB299,11,2
1186.02 (2) (b) 2m. Individuals who reside or are employed within well-defined
2and contiguous rural districts or multicounty regions.
AB299, s. 6 3Section 6. 186.02 (2) (c) of the statutes is amended to read:
AB299,11,84 186.02 (2) (c) Members of the immediate family of all qualified persons are
5eligible for membership. In this paragraph, "members of the immediate family"
6include the wife, husband, parents, stepchildren and children of a member whether
7living together in the same household or not and any other relatives of the member
8or spouse of a member living together in the same household as the member.
AB299, s. 7 9Section 7. 186.02 (2) (d) of the statutes is renumbered 186.02 (2) (d) 1. and
10amended to read:
AB299,11,1411 186.02 (2) (d) 1. Organizations and associations An organization or association
12of individuals, the majority of whom the directors, owners, or members of which are
13eligible for membership, may be admitted to membership in the same manner and
14under the same conditions as individuals.
AB299, s. 8 15Section 8. 186.02 (2) (d) 2. of the statutes is created to read:
AB299,11,1816 186.02 (2) (d) 2. An organization or association that has its principal business
17location within any geographic limits of the credit union's field of membership may
18be admitted to membership.
AB299, s. 9 19Section 9. 186.11 (4) (title) of the statutes is amended to read:
AB299,11,2120 186.11 (4) (title) Investment in credit union service corporations
21organizations.
AB299, s. 10 22Section 10. 186.11 (4) (a) of the statutes is renumbered 186.11 (4) (a) (intro.)
23and amended to read:
AB299,12,224 186.11 (4) (a) (intro.) A Unless the office of credit unions approves a higher
25percentage, a
credit union may invest not more than 1.5% of its total assets in the

1capital shares or obligations of a credit union service corporation organizations that
2satisfy all of the following:
AB299,12,4 32. Are organized primarily to provide goods and services to credit unions, credit
4union organizations, and credit union members.
AB299, s. 11 5Section 11. 186.11 (4) (a) 1. of the statutes is created to read:
AB299,12,86 186.11 (4) (a) 1. Are corporations, limited partnerships, limited liability
7companies, or other entities that are permitted under the laws of this state and that
8are approved by the office of credit unions.
AB299, s. 12 9Section 12. 186.11 (4) (b) (intro.) and 1. of the statutes are amended to read:
AB299,12,1110 186.11 (4) (b) (intro.) A credit union service corporation organization under par.
11(a) may provide goods and services including any of the following:
AB299,12,1712 1. Credit union operations services, including service centers, credit and debit
13card services, automated teller and remote terminal services, electronic transaction
14services,
accounting systems, data processing, management training and support,
15payment item processing, record retention and storage, locator services, research,
16debt collection, credit analysis and loan servicing, coin and currency services, and
17marketing and advertising services.
AB299, s. 13 18Section 13. 186.11 (4) (c) of the statutes is amended to read:
AB299,12,2019 186.11 (4) (c) A credit union service corporation organization may be subject
20to audit by the office of credit unions.
AB299, s. 14 21Section 14. 186.113 (1) of the statutes is amended to read:
AB299,13,222 186.113 (1) Branch offices. If the need and necessity exist and with With the
23approval of the office of credit unions, establish branch offices inside this state or no
24more than 25 miles
or outside of this state. Permanent records may be maintained
25at branch offices established under this subsection. In this subsection, the term

1"branch office" does not include a remote terminal, a limited services office, or a
2service center.
AB299, s. 15 3Section 15. 186.113 (1m) (a) (intro.) of the statutes is amended to read:
AB299,13,64 186.113 (1m) (a) (intro.) Establish Before the effective date of this paragraph
5.... [revisor inserts date], establish
limited services offices outside this state to serve
6any member of the credit union if all of the following requirements are met:
AB299, s. 16 7Section 16. 186.113 (6) (b) and (c) of the statutes are amended to read:
AB299,13,108 186.113 (6) (b) Act as trustees or custodians of member tax deferred retirement
9funds, individual retirement accounts, medical savings accounts, or other employee
10benefit accounts or funds
permitted by federal law to be deposited in a credit union.
AB299,13,1211 (c) Act as a depository for member-deferred member qualified and
12nonqualified deferred
compensation funds as permitted by federal law.
AB299, s. 17 13Section 17. 186.113 (24) of the statutes is created to read:
AB299,13,1514 186.113 (24) Funeral trusts. Accept deposits made by members for the
15purpose of funding burial agreements by trusts created pursuant to s. 445.125.
AB299, s. 18 16Section 18. 186.20 of the statutes is created to read:
AB299,13,19 17186.20 Financial privacy. A credit union shall comply with any applicable
18requirements under 15 USC 6801 to 6803 and any applicable regulations prescribed
19by the national credit union administration under 15 USC 6804.
AB299, s. 19 20Section 19. 186.235 (7) (a) (intro.) of the statutes is amended to read:
AB299,14,221 186.235 (7) (a) (intro.) Employees of the office of credit unions and members
22of the review board shall keep secret all the facts and information obtained in the
23course of examinations, except or contained in any report provided by a credit union
24other than any semiannual or quarterly financial report that is regularly filed with

1the office of credit unions. This requirement does not apply
in any of the following
2situations:
AB299, s. 20 3Section 20. 186.235 (7) (c) of the statutes is created to read:
AB299,14,94 186.235 (7) (c) If any person mentioned in par. (a) discloses any information
5about the private account or transactions of a credit union or any information
6obtained in the course of an examination of a credit union, except as provided in pars.
7(a) and (b), that person may be required to forfeit his or her office or position and may
8be fined not less than $100 nor more than $1,000, or imprisoned for not less than 6
9months nor more than 3 years, or both.
AB299, s. 21 10Section 21. 186.235 (7m) of the statutes is created to read:
AB299,14,1311 186.235 (7m) Return of examination reports. Examination reports possessed
12by a credit union are confidential, remain the property of the office of credit unions,
13and shall be returned to the office of credit unions immediately upon request.
AB299, s. 22 14Section 22. 186.235 (16) (a) of the statutes is renumbered 186.235 (16).
AB299, s. 23 15Section 23. 186.235 (16) (b) of the statutes is repealed.
AB299, s. 24 16Section 24. 186.235 (16m) of the statutes is created to read:
AB299,14,1817 186.235 (16m) Financial privacy examination. The office of credit unions shall
18examine a credit union to determine the credit union's compliance with s. 186.20.
AB299, s. 25 19Section 25. 186.36 of the statutes is amended to read:
AB299,14,23 20186.36 Sale of insurance in credit unions. Any officer or employee of a
21credit union, when acting as an agent for the sale of insurance on behalf of the credit
22union, shall pay all commissions received from the sale of credit life insurance or
23credit accident and sickness
insurance to the credit union.
AB299, s. 26 24Section 26. 186.41 (title) of the statutes is amended to read:
AB299,15,2
1186.41 (title) Interstate acquisition acquisitions and merger mergers
2of credit unions.
AB299, s. 27 3Section 27. 186.41 (1) (a) of the statutes is renumbered 186.41 (1) (bm) and
4amended to read:
AB299,15,65 186.41 (1) (bm) "In-state Wisconsin credit union" means a credit union having
6its principal office located in this state.
AB299, s. 28 7Section 28. 186.41 (1) (c) of the statutes is renumbered 186.41 (1) (am) and
8amended to read:
AB299,15,119 186.41 (1) (am) "Regional Out-of-state credit union" means a state or federal
10credit union that has its, the principal office of which is located in one of the regional
11states
a state other than this state.
AB299, s. 29 12Section 29. 186.41 (1) (d) of the statutes is repealed.
AB299, s. 30 13Section 30. 186.41 (2) and (3) of the statutes are amended to read:
AB299,15,1514 186.41 (2) In-state Wisconsin credit union. (a) An in-state A Wisconsin credit
15union may do any of the following:
AB299,15,1716 1. Acquire an interest in, or some or all of the assets and liabilities of, one or
17more regional out-of-state credit unions.
AB299,15,1818 2. Merge with one or more regional out-of-state credit unions.
AB299,15,2219 (b) An in-state A Wisconsin credit union proposing any action under par. (a)
20shall provide the office of credit unions a copy of any original application seeking
21approval by a federal agency or by an agency of the regional another state and of any
22supplemental material or amendments filed in connection with any application.
AB299,15,24 23(3) Regional Out-of-state credit unions. Except as provided in sub. (4), a
24regional
an out-of-state credit union may do any of the following:
AB299,16,2
1(a) Acquire an interest in, or some or all of the assets of, one or more in-state
2Wisconsin credit unions.
AB299,16,33 (b) Merge with one or more in-state Wisconsin credit unions.
AB299, s. 31 4Section 31. 186.41 (4) (intro.), (a) to (d) and (f) of the statutes are amended to
5read:
AB299,16,76 186.41 (4) Limitations. (intro.) A regional An out-of-state credit union may
7not take any action under sub. (3) until all of the following conditions have been met:
AB299,16,118 (a) The office of credit unions finds that the statutes of the regional state in
9which the regional out-of-state credit union has its principal office permit in-state
10Wisconsin credit unions to both acquire regional out-of-state credit union assets and
11merge with one or more regional out-of-state credit unions in the regional that state.
AB299,16,1412 (b) The office of credit unions has not disapproved the acquisition of in-state
13Wisconsin credit union assets or the merger with the in-state Wisconsin credit union
14under sub. (5).
AB299,16,2315 (c) The office of credit unions gives a class 3 notice, under ch. 985, in the official
16state newspaper, of the application to take an action under sub. (3) and of the
17opportunity for a hearing and, if at least 25 residents of this state petition for a
18hearing within 30 days of the final notice or if the office of credit unions on its own
19motion calls for a hearing within 30 days of the final notice, the office of credit unions
20holds a public hearing on the application, except that a hearing is not required if the
21office of credit unions finds that an emergency exists and that the proposed action
22under sub. (3) is necessary and appropriate to prevent the probable failure of an
23in-state
a Wisconsin credit union that is closed or in danger of closing.
AB299,17,224 (d) The office of credit unions is provided a copy of any original application
25seeking approval by a federal agency of the acquisition of in-state Wisconsin credit

1union assets or of the merger with an in-state a Wisconsin credit union and of any
2supplemental material or amendments filed with the application.
AB299,17,53 (f) With regard to an acquisition of assets of an in-state a Wisconsin credit
4union that is chartered on or after May 9, 1986, the in-state Wisconsin credit union
5has been in existence for at least 5 years before the date of acquisition.
AB299, s. 32 6Section 32. 186.41 (5) (a), (b), (c) and (cr) of the statutes are amended to read:
AB299,17,107 186.41 (5) (a) Considering the financial and managerial resources and future
8prospects of the applicant and of the in-state Wisconsin credit union concerned, the
9action would be contrary to the best interests of the members of the in-state
10Wisconsin credit union.
AB299,17,1311 (b) The action would be detrimental to the safety and soundness of the
12applicant or of the in-state Wisconsin credit union concerned, or to a subsidiary or
13affiliate of the applicant or of the in-state Wisconsin credit union.
AB299,17,1814 (c) Because the applicant, its executive officers, or directors have not
15established a record of sound performance, efficient management, financial
16responsibility, and integrity, the action would be contrary to the best interests of the
17creditors, the members or, the other customers of the applicant or of the in-state , the
18Wisconsin
credit union, or contrary to the best interests of the public.
AB299,17,2219 (cr) The applicant has failed to propose to provide adequate and appropriate
20services of the type contemplated by the community reinvestment act of 1977 in the
21community in which the in-state Wisconsin credit union which the applicant
22proposes to acquire or merge with is located.
AB299, s. 33 23Section 33. 186.41 (6) (a) of the statutes is renumbered 186.41 (6).
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