LRB-4167/1
ARG:lmk:pg
2007 - 2008 LEGISLATURE
February 28, 2008 - Introduced by Representative Gottlieb. Referred to
Committee on Financial Institutions.
AB897,1,6 1An Act to renumber 186.314 (intro.) and 214.66 (intro.); to amend 186.235 (7)
2(a) (intro.) and 214.40 (3); and to create 186.117, 186.314 (1m) (title), 186.314
3(2), 214.66 (1m) (title) and 214.66 (2) of the statutes; relating to: community
4reinvestment assessments and ratings of credit unions, the conversion of credit
5unions to mutual savings banks, providing an exemption from emergency rule
6procedures, and granting rule-making authority.
Analysis by the Legislative Reference Bureau
This bill requires the Office of Credit Unions (OCU) attached to the Department
of Financial Institutions to annually assess and rate the state's credit unions'
performance in helping to meet the credit needs of their communities. By March 1,
2009, and annually thereafter, each credit union must prepare and file with the OCU
a community credit needs statement (statement). The OCU must annually assess
a credit union's performance in helping to meet the credit needs of its community
(assessment) and, in making this assessment, must consider the credit union's
statement and specified other factors. The OCU must prepare a written report
summarizing the results of its assessment for each credit union and must provide
each credit union with a numerical rating, from 1 to 5, of the credit union's
performance in helping to meet the credit needs of its community. The assessment
report is generally publicly available and the credit union must post, in a manner
prescribed by the OCU, its numerical rating. In considering a credit union's

application for authorization to undertake certain actions, the OCU must consider
the credit union's assessment and may use the assessment as a basis for denying the
application. If a credit union fails to maintain a rating of 3 or better, the OCU may
also limit the powers that the credit union would otherwise be authorized to exercise.
The OCU, with the approval of the credit union review board, must promulgate rules
for the efficient administration of these provisions, which rules shall include the form
and content of credit union statements.
Current law provides procedures for the organizational conversion of certain
financial institutions, including the conversion of state savings and loan associations
into state savings banks, mutual savings banks into stock savings banks, and state
credit unions into federal credit unions.
This bill allows state credit unions to convert to mutual savings banks if certain
requirements are met. The credit union must follow certain procedural
requirements related to voting for the conversion and a majority of credit union
members who vote must vote to approve the conversion. If the credit union members
vote to approve the conversion, the OCU must verify the vote and the credit union
must take all necessary action to complete the conversion to a mutual savings bank.
After receiving a certificate of incorporation as a mutual savings bank, the credit
union must file a copy of the certificate with the OCU and the OCU must issue a
certificate of conversion if the OCU determines that the conversion complies with
applicable law. The date specified in the certificate of conversion is the effective date
of the conversion. Upon conversion, the credit union ceases to be a credit union and
becomes a mutual savings bank, but all assets, rights, and obligations of the credit
union immediately vest in the mutual savings bank to the same extent as though the
conversion had not taken place.
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:
AB897, s. 1 1Section 1. 186.117 of the statutes is created to read:
AB897,2,5 2186.117 Community reinvestment. (1) Required information. A credit
3union shall prepare a community credit needs statement for filing with the office of
4credit unions under sub. (2) and shall post a community credit needs notice
5indicating the credit union's numerical rating under sub. (4) (a).
AB897,3,4 6(2) Filing. No later than March 1 of each year, a credit union shall file with
7the office of credit unions a community credit needs statement. In addition to the

1community credit needs statement, the office of credit unions may require a credit
2union to file additional information in making an assessment of the credit union
3under sub. (3) and in considering an application of a credit union that is listed under
4sub. (5).
AB897,3,9 5(3) Annual assessment. The office of credit unions shall assess annually a
6credit union's performance in helping to meet the credit needs of its community,
7consistent with safe and sound operation of the credit union. In making an
8assessment under this subsection, the office of credit unions shall consider the credit
9union's community needs statement and all of the following:
AB897,3,1110 (a) Activities conducted by the credit union to determine the credit needs of its
11community.
AB897,3,1312 (b) The credit union's marketing efforts to make community members aware
13of the credit services offered by the credit union.
AB897,3,1614 (c) Participation by the board of directors of the credit union in formulating the
15credit union's policies and reviewing the credit union's performance in helping to
16meet the credit needs of its community.
AB897,3,2117 (d) Practices that the credit union, or an officer, employee, or director of the
18credit union, engages in that are intended to discourage, or have the effect of
19discouraging, applications for the types of credit identified in any plan prepared by
20the credit union specifying the credit union's goals for helping to meet the credit
21needs of its community.
AB897,3,2322 (e) The geographic distribution of the credit union's credit applications,
23extensions, and denials.
AB897,3,2524 (f) Evidence of prohibited discriminatory or other illegal credit practices by the
25credit union.
AB897,4,2
1(g) The credit union's record of opening and closing branch offices and of
2providing services at branch offices.
AB897,4,43 (h) The credit union's participation in, and investments in, community
4development and redevelopment projects and programs.
AB897,4,85 (i) The credit union's origination, to members of its community, of residential
6mortgage loans, housing rehabilitation or improvement loans, and small farm loans,
7and the credit union's purchase of these types of loans made by others to members
8of its community.
AB897,4,109 (j) The credit union's participation in government-insured, guaranteed, or
10subsidized loan programs for housing, small businesses, or small farms.
AB897,4,1311 (k) The credit union's ability to meet the credit needs of its community based
12on the credit union's size and financial condition, local economic conditions, or other
13factors.
AB897,4,1514 (L) The geographic distribution and use of remote terminals under s. 186.113
15(15) that are operated by the credit union.
AB897,4,1716 (m) The credit union's participation in credit counseling services in its
17community.
AB897,4,1918 (n) Any other factor that affects a credit union's performance in helping to meet
19the credit needs of its community.
AB897,5,2 20(4) Assessment report; confidentiality. (a) The office of credit unions shall
21prepare a written report summarizing the results of each assessment under sub. (3).
22The office of credit unions shall provide the credit union that is the subject of the
23report with a copy of the report and, except as provided in par. (b), shall make the
24report available for public inspection. The report shall include a numerical rating
25of the credit union's performance in helping to meet the credit needs of its community.

1The numerical rating shall use a 1 to 5 rating system, with 1 representing excellent
2performance and 5 representing unsatisfactory performance.
AB897,5,73 (b) The office of credit unions may not make available for public inspection
4under par. (a) any statement obtained or made by the office of credit unions in the
5course of the assessment that, in the discretion of the office of credit unions, is too
6sensitive or speculative in nature to disclose to the public, or any personal financial
7information.
AB897,5,11 8(5) Use of assessment upon consideration of certain applications. The office
9of credit unions shall consider the assessment of a credit union under sub. (3)
10whenever the office of credit unions considers any of the following applications from
11the credit union:
AB897,5,1212 (a) An application to invest under s. 186.11 (1) (e).
AB897,5,1313 (b) An application to establish a branch office under s. 186.113 (1).
AB897,5,1514 (c) An application to operate a remote terminal in a mobile facility under s.
15186.113 (15) (a).
AB897,5,1616 (d) An application to merge with a credit union under s. 186.31.
AB897,5,1817 (e) An application to acquire or merge with an out-of-state credit union under
18s. 186.41 (2) (a).
AB897,5,21 19(6) Assessment as basis for denial of application. The office of credit unions
20may use the assessment of a credit union under sub. (3) as a basis for denying an
21application of the credit union that is listed under sub. (5).
AB897,5,25 22(7) Limitation of authority. If a credit union fails to maintain a rating of 3 or
23better in the annual assessment performed by the office of credit unions under sub.
24(3), the office of credit unions may limit the credit union's exercise of powers under
25ss. 186.113 and 186.115.
AB897,6,4
1(8) Hearing. The office of credit unions may hold a public hearing on an
2application of a credit union that is listed under sub. (5) if the office of credit unions
3receives an objection to the application that is based on any of the factors used in
4making the assessment under sub. (3).
AB897,6,9 5(9) Administration. The office of credit unions, with the approval of the credit
6union review board, shall promulgate rules for the efficient administration of this
7section. The rules shall include the form and content of a community credit needs
8statement and the form and content of, and acceptable manner of posting, a
9community credit needs notice under sub. (1).
AB897, s. 2 10Section 2. 186.235 (7) (a) (intro.) of the statutes is amended to read:
AB897,6,1611 186.235 (7) (a) (intro.) Employees Except as provided in s. 186.117 (4) (a),
12employees
of the office of credit unions and members of the review board shall keep
13secret all the facts and information obtained in the course of examinations or
14contained in any report provided by a credit union other than any semiannual or
15quarterly financial report that is regularly filed with the office of credit unions. This
16requirement does not apply in any of the following situations:
AB897, s. 3 17Section 3. 186.314 (intro.) of the statutes is renumbered 186.314 (1m).
AB897, s. 4 18Section 4. 186.314 (1m) (title) of the statutes is created to read:
AB897,6,1919 186.314 (1m) (title) To federal credit union.
AB897, s. 5 20Section 5. 186.314 (2) of the statutes is created to read:
AB897,6,2221 186.314 (2) To mutual savings bank. (a) A credit union may convert to a mutual
22savings bank by complying with pars. (b) to (d).
AB897,7,1523 (b) The proposition for a conversion shall first be approved by a majority
24recommendation of the directors of the credit union. The directors shall, by a
25majority vote of the directors, set a date for a meeting of credit union members to vote

1on the conversion. Credit union members may also vote by written ballot to be filed
2on or before the meeting date. Written notice specifying the purpose and subject
3matter of the meeting and the date that is set for the meeting and for voting by
4submission of a written ballot shall be sent to each member eligible to vote at the
5member's address appearing on the records of the credit union. This notice shall be
6sent to each credit union member 3 times, once not more than 95 days nor less than
790 days before the date of the meeting to vote on the conversion, once not more than
865 days nor less than 60 days before the date of the meeting to vote on the conversion,
9and once not more than 35 days nor less than 30 days before the date of the meeting
10to vote on the conversion. The 3rd such notice shall be accompanied by a written
11ballot, shall clearly inform the member that the member may vote at the meeting or
12by submitting the written ballot, and shall state the time and place of the meeting
13in addition to the date of the meeting. Approval of the proposition for conversion
14shall be by affirmative vote, in person or in writing, of a majority of the credit union
15members voting at the meeting or by written ballot.
AB897,7,2416 (c) A credit union that proposes to convert to a mutual savings bank under this
17subsection shall file with the office of credit unions a notice of its intent to convert
18and, within 10 days after the member vote on the conversion under par. (b), a
19statement of the results of the member vote. If the credit union members vote to
20approve the proposition for conversion, the member vote shall be verified by the office
21of credit unions and, if the office of credit unions disapproves of the methods or
22procedures used in relation to that member vote, the member vote shall be taken
23again in the manner directed by the office of credit unions and consistent with the
24requirements under par. (b).
AB897,8,9
1(d) Upon approval by the credit union members of the proposition for
2conversion under par. (b), the credit union shall take all necessary action under ch.
3214 to complete the conversion to a mutual savings bank. Within 10 days after
4receipt from the division of banking of a certificate of incorporation as a mutual
5savings bank, the credit union shall file a copy of the certificate with the office of
6credit unions. The office of credit unions shall issue to a converting credit union a
7certificate of conversion to a mutual savings bank if the office determines that the
8conversion complies with this subsection and all requirements under ch. 214. The
9date specified in the certificate of conversion is the effective date of the conversion.
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