DFI-CU 56.01 Rules of procedure. The following rules of procedure shall govern all types of proceedings had before the credit union review board. In any case where the statute involved provides a procedure inconsistent with these rules, the statute shall govern to the extent of such inconsistency. If in any case the forms set out in these rules be found are not appropriate for a particular situation, parties may devise forms substantially similar to those herein prescribed, in this chapter to meet such situations.
SECTION 6. DFI-CU 56.06 is amended to read:
DFI-CU 56.06 Conduct of hearings; continuances; appearances; examination of witnesses. Continuances and adjournments may be granted by the board for cause shown. The appellant may appear in person or by an officer, regular employee, or attorney. Any other interested person may likewise so appear. Proceedings shall be in conformity to s. 220.035 (1) (c), Stats. Witnesses competent to take an oath shall be sworn by the chair of the board or the presiding officers and may be examined on behalf of the board by the chair or presiding officer or by a representative of the attorney general acting as counsel for the board, or with the permission of the chair or presiding officer, by any employee of the board or director or by any other interested party or their attorneys. Any interested party or any of his or her agents, officers, or employees may be examined adversely as prescribed by s. 885.14, 1973 906.11, Stats. In all other respects, proceedings shall be had as prescribed in ch. 227, Stats. SECTION 7. DFI-CU 56.07 is amended to read:
DFI-CU 56.07 Subpoenas. The board shall have the powers granted by s. 885.01 (4), 1973 Stats. SECTION 8. DFI-CU 56.09 is amended to read:
DFI-CU 56.09 Arguments. Except as provided in s. 227.49, Stats., arguments shall be submitted to the board in writing, unless otherwise ordered. Eight copies An electronic or paper copy of such written arguments shall be filed with the director who shall forthwith send a an electronic or paper copy to each member of the board. The time for filing arguments shall be fixed by the officer presiding at the hearing. SECTION 9. DFI-CU 56.10 is amended to read:
DFI-CU 56.10 The provisions of s. 263.28, 1973 802.09 (2) Stats., with reference to variances between the allegations and the proof, shall apply to proceedings under these rules. SECTION 10. DFI-CU 59 is repealed.
SECTION 11. DFI-CU 62.01 (1) (intro.), (a) and (b) are amended to read:
DFI-CU 62.01 (1) (intro.) The director may issue a supervisory order to cease and desist whenever he or she determines that a credit union is doing any of the following:
(a) Violating the provisions of its articles or by-laws, or the laws of this state, or the laws of the United States, or any lawful rule, order, or regulation promulgated by the director and the credit union review board; or .
(b) Violating any order of the director which may restrict, limit, or prohibit the credit union from engaging in any act or practice specified under s. 186.235 (11) (a) 1. to 9., Stats., inclusive; SECTION 12. DFI-CU 62.01 (1) (c) is renumbered 62.01 (1m) and as renumbered is amended to read:
(c) The (1m) Contents of order. A supervisory order could issued under sub. (1) may include but would not be limited to the declaration and/or payment of dividends on member savings; the granting or payout of member loans; the acceptance of payments on member savings; the payout of member requests for member savings; or any other portion of the business of a credit union. any of the following:
(a) The declaration of dividends on member savings.
(b) The payment of dividends on member savings.
(c) The granting of member loans.
(d) The payout of member loans.
(e) The acceptance of payments on member savings.
(f) The payout of member requests for member savings.
(g) Any other portion of the business of a credit union.
SECTION 13. DFI-CU 62.01 (2) is amended to read:
(2) The director shall deliver or cause to have delivered a formal written signed order to the board of directors of the credit union in which the facts known to the director are set forth and. The director shall demand the discontinuance of such the practice(s) or practices giving rise to the order and, whenever applicable, shall order the credit union to comply and/or or institute corrective action or both.
SECTION 14. DFI-CU 63.02 (4) is amended to read:
63.02 (4) Remote terminal. “Remote terminal" means a remote terminal as defined in s. 186.113 (15) (b), Stats., a remote service unit as defined in s. 215.13 (46) (a) 2., Stats., or a customer bank communications terminal as defined in s. 221.0303 (1), Stats. SECTION 15. DFI-CU 63.04 (2) (intro.) and (a) are amended to read:
DFI-CU 63.04 (2) Exceptions. (intro.) The temporary limitation of access to a remote terminal to designated customers of designated financial institutions for reasonable test periods determined by the director will not be deemed in violation of this section if approved by the director in writing. The director may approve such limitations if any of the following apply:
(a) The director considers it necessary or desirable to permit restricted operation during periods of testing or experimentation; or,.
SECTION 16. DFI-CU 63.06 (intro.), (2) (intro.), (a) and (b), and (3) (intro.) and (a) are amended to read:
DFI-CU 63.06 Confidentiality and security requirements. (intro.) No credit union may directly or indirectly acquire, place or operate a remote terminal, and no credit union may participate in the acquisition, placement or operation of a remote terminal, unless precautions acceptable to the director are provided to do any of the following:
(2) (intro.) Prevent information regarding a transaction conducted through the terminal from being disclosed to any person other than any of the following:
(a) The customer making the transaction; .
(b) Any other person who is a party to the transaction or is necessary to effect the transaction, but only to the extent that the information disclosed is necessary to effect the transaction; or .
(3) (intro.) Ensure that the plastic card or other means providing its customers access to the terminal is issued only for any of the following purposes:
(a) In response to a request or application therefore; or .
SECTION 17. DFI-CU 68.06 (2) is amended to read:
DFI-CU 68.06 (2) Authorized depository financial institutions. A credit union may invest in deposit accounts of any authorized depository financial institution, provided the aggregate investment per institution shall does not exceed the greater of the deposit insurance limit under federal deposit insurance corporation or 1/2 the unimpaired balance of the credit union's regular reserve retained earnings unless the director of credit unions approves investment by the credit union exceeding this amount.
SECTION 18. DFI-CU 69.03 is amended to read:
DFI-CU 69.03 Preferential loan treatment prohibited. The interest rates, terms and conditions of any loan made to an official or on which loan an official is a co-maker or guarantor, or of a loan made for the substantial benefit of any official, shall may not be more favorable than the rates, terms and conditions prevailing at that time for comparable loan transactions of any other member.
SECTION 19. DFI-CU 71.02 (1) (intro.), (a), and (b), and (2) (a) to (d) are amended to read:
DFI-CU 71.02 (1) (intro.) “Full-payout lease" means a lease from which the lessor can reasonably expect to realize a return of its full investment in the leased property plus the estimated cost of financing the property over the term of the lease from any of the following:
(a) Rentals;.
(b) Estimated tax benefits if applicable; and.
(2) (a) The servicing, repair or maintenance of the leased property during the lease term;.
(b) The purchasing of parts and accessories for the leased property. However, except that improvements and additions to the leased property may be leased to the lessee upon its request in accordance with the full-payout requirements of this chapter;.
(c) The loan of replacement or substitute property while the leased property is being serviced;.
(d) The purchasing of insurance for the lessee, except where the lessee has failed in its contractual obligation to purchase or maintain the required insurance; or.
SECTION 20. DFI-CU 71.03 (intro.) is amended to read:
DFI-CU 71.03 Authority to lease personal property. (intro.) Subject to the limitations in this chapter and provided the lease is a net, full-payout lease representing a noncancelable obligation of the lessee, notwithstanding the possible early termination of that lease, a credit union may do any of the following:
SECTION 21. DFI-CU 71.03 (1) (a) and (b), and (2) are renumbered 71.03 (1) to (3) and (1) and (2) as renumbered, are amended to read:
DFI-CU 71.03 (1) (a) Become the legal or beneficial owner and lessor of specific personal property or otherwise acquire such property at the request of the lessee who wishes to lease it from the credit union; or .
(b) (2) Become the owner and lessor of personal property by purchasing the property from another lessor in connection with its purchase of the related lease; and .
(2) (3) Incur obligations incidental to its position as the legal or beneficial owner and lessor of the leased property.
SECTION 22. DFI-CU 71.04 (intro.) and (1) are amended to read:
DFI-CU 71.04 (intro.) If, in good faith, a credit union determines that there has been an unanticipated change in conditions which threatens its financial position by significantly increasing its exposure to loss, the credit union may do any of the following:
(1) As the owner and lessor under a net, full-payout, lease, take reasonable and appropriate action to salvage or protect the value of the property or its interests arising under the lease, or.
SECTION 23. DFI-CU 72.02 is repealed and recreated to read:
DFI-CU 72.02. Member business loan. (1) “Member business loan” means a loan, line of credit, letter of credit including unfunded commitments, and any interest a credit union obtains in such loans made by another lender to individuals, sole proprietorships, partnerships, corporations, or other business enterprises for commercial, industrial, agricultural, or professional purposes.
(2) “Member business loan” does not include any of the following:
(a) Loans for personal expenditure purposes.
(b) Loans made by a corporate credit union.
(c) Loans made by a federally insured credit union to another federally insured credit union.
(d) Loans made by a credit union to a credit union service organization.
(e) Loans secured by a one- to four-family residential property.
(f) Loans fully secured by shares in the credit union making the extension of credit or deposits in other financial institutions.
(g) Loans secured by a vehicle manufactured for household use, except that such loans will be considered member business loans if they will be used for a purpose set forth in sub. (1) and the outstanding aggregate net member business loan balance is $50,000 or greater.
(h) Business purpose loans that are equal to or less than $50,000 after calculating the aggregate outstanding balances plus unfunded commitments less any portion secured by shares in the credit union held by the borrower or an associated borrower.
(i) Loans for which a federal or state agency fully insures repayment, fully guarantees repayment, or provides an advance commitment to purchase the loan in full.
(j) Any non-member business purpose loan or non-member participation interest in a business purpose loan made by another lender, provided the credit union acquired the loan or interest in compliance with all relevant laws and regulations and the credit union is not, in conjunction with another credit union, trading member business loans to circumvent the aggregate limit.
SECTION 24. DFI-CU 74.04 (1) to (3) are amended to read:
DFI-CU 74.04 (1) Anti-tying. A credit union shall may not extend credit or alter the terms or conditions of an extension of credit conditioned upon the customer entering into a debt cancellation contract or debt suspension agreement with the credit union.
(2) Misrepresentations generally. A credit union shall may not engage in any practice or use any advertisement that is false, misleading or deceptive, or which omits fails to state material information, or otherwise would cause a reasonable person to reach an erroneous belief with respect to information that may be disclosed under this section.
(3) A credit union shall may not offer debt cancellation contracts or debt suspension agreements that contain any of the following:
SECTION 25. DFI-CU 74.09 is amended to read:
DFI-CU 74.09 A credit union shall manage the risks associated with debt cancellation contracts and debt suspension agreements in accordance with safety and soundness principles. A credit union shall establish and maintain effective risk management and control processes over its debt cancellation contracts and debt suspension agreements. The processes shall include appropriate recognition and financial reporting of income, expenses, assets and liabilities, and appropriate treatment of all expected and unexpected losses associated with the products. A credit union shall assess the adequacy of its internal control and risk mitigation activities in view of the nature and scope of its debt cancellation contract and debt suspension agreement programs. The director may limit, restrict or prohibit a credit union from providing debt cancellation contracts and debt suspension agreements if examination results indicate that the credit union is conducting its business in an unauthorized or unsafe manner or is violating any of the provisions of this chapter.
