8. Comparison with rules in adjacent states:
Credit unions chartered under the laws of Illinois, Iowa, Michigan, and Minnesota are federally insured and apply the federal definition of “member business loan” set forth in the Economic Growth, Regulatory Relief, and Consumer Protection Act and accompanying rules. See 12 C.F.R. § 723.8(b) (excluding from the definition of “member business loan” any loan that is “fully secured by a lien on a 1- to 4-family dwelling”); 38 Ill. Admin. Code §§ 190.165(b)(2) & 190.165(h)(2) (same). 9. Summary of factual data and analytical methodologies:
Proposed changes to ch. DFI—CU 72 are based on staff regulatory experience and multiple discussions with the Credit Union Review Board and industry groups.
The proposed changes are also based on the Office’s knowledge of and desire to fix erroneous cross-references to state or federal rules or statutes and the need to modify the structure of existing rules in nonsubstantive ways to be consistent with modern drafting practices of the legislative reference bureau and the form and style requirements of the bureau and the legislative council staff.
10. Analysis and supporting documents used to determine effect on small business or in preparation of an economic impact analysis:
The proposed revisions are definitional or non-substantive; they do not require credit unions or other businesses to assume any new duties, change existing practices, or incur new costs.
11. Effect on small business:
The proposed revisions are definitional or non-substantive and will have little effect on small business. As noted above, they do not require credit unions or other businesses to assume any new duties, change existing practices, or incur new costs.
12. Agency contact person:
Thomas Theune
Director, Office of Credit Unions
Wisconsin Department of Financial Institutions
PO Box 8861
Madison, WI 53708-8861
Telephone (608) 267-2608
13. Place where comments are to be submitted and deadline for submission:
Comments may be submitted to the contact person shown below no later than the date on which the public hearing on this proposed rule order is conducted. Information as to the place, date and time of the public hearing will be published in the Wisconsin Administrative Register.
By mail: Marc Shovers, Assistant Chief Legal Counsel, Department of Financial Institutions, PO Box 8861, Madison, WI 53708-8861.
By delivery: Marc Shovers, Assistant Chief Legal Counsel, Department of Financial Institutions, 4822 Madison Yards Way, North Tower, Madison, WI 53705.
Rule Text
SECTTION 1. DFI-CU 51.01 is amended to read:
DFI-CU 51.01 (1) A credit union member shall be considered as is a person whose application has been approved in accordance with the provisions of as provided under the credit union’s by-laws. Said The person shall pay the entrance fee only if required to do so by resolution of the board of directors and shall subscribe for at least one share of stock and who shall. The person may either pay for this share in full upon credit union approval of the person’s application or may make the an initial payment thereon and shall and then pay the outstanding balance within 3 months.
SECTTION 2. DFI-CU 54.02 (5) (intro.) and (a) to (d) is amended to read:
DFI-CU 54.02 (5) (intro.) “Market value" means the most probable price, which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby where all of the following apply:
(a) Buyer and seller are typically motivated;.
(b) Both parties are well informed or well advised, and acting in what they consider their own best interests;.
(c) A reasonable time is allowed for exposure in the open market;.
(d) Payment is made in terms of cash in U.S. dollars or in terms of comparable financial arrangements comparable thereto; and.
SECTTION 3. DFI-CU 54.03 (1) (intro.) and (a) to (c) and (3) (a) to (d) is amended to read:
DFI-CU 54.03 (1) (intro.) Purchase money loans, excluding amounts financed for accident, health and credit life insurance premiums, may not exceed 90% of the market value of the subject real estate except if any of the following apply:
(a) The part of the loan that exceeds the 90% limitation is insured or guaranteed by a qualified private mortgage insurer;.
(b) The loan or the part of the loan that exceeds the 90% limitation is insured or guaranteed by an agency or instrumentality of a local, state or federal government;.
(c) The loan is to facilitate the sale of real estate owned by the credit union or real estate in foreclosure; or.
(3) (a) The date of closing;.
(b) The date of the first contractual principal and interest payment;.
(c) The date of any additional advance;.
(d) The date of any properly executed loan modification agreement; or.
SECTION 4. DFI-CU 54.05 (intro.) and (1) to (7) is renumbered 54.05 (1) (a) to (g) and (2) and, as renumbered, is amended to read:
DFI-CU 54.05 (1) Each real estate loan shall be supported by the following documents and information:
(1) (a) A note properly executed, together with the related mortgage properly executed and recorded.
(2) (b) Documentation establishing the quality and validity of the credit union's lien position by one of the following, for each category of loan:
(a) 1. For purchase money loans, one of the following:
1. a. A title policy in favor of the credit union covering its interest as mortgagee in the property; or.
2. b. An abstract showing title in the borrower's name and the credit union's mortgage, together with an attorney's opinion indicating the credit union's lien position.
(b) 2. For equity loans, one of the following:
1. a. An abstract of title and a signed report of title opinion by an attorney;.
2. b. A title insurance policy; or.
3. c. A final title letter report showing the status of the current lien.
(c) If the credit union has obtained the supporting documentation in accordance with par. (a) or (b) par. (b) 1. or 2., a subsequent extension of credit secured with the same real estate mortgage may be supported by a letter report from the title or abstract company, or a certified abstract showing the credit union's interest in the property as of the most recent extension of credit. No additional title documentation is required in connection with refinancing a loan on which no additional funds are advanced. Accrued interest debits, refinance charges and costs for insurance premiums are not considered additional advances. (3) (d) An appraisal or a valuation if required by NCUA rules and regulations 12 CFR Part 722. (4) (e) A copy of insurance policies, with a mortgage clause payable to the credit union, indicating all improvements on the real estate are insured against fire and casualty loss. The required insurance coverage shall be the lesser of the full replacement value of the improvements or the outstanding balance of the loan. Proof of insurance may be maintained through a third party contract.
(5) (f) Evidence of the status of the payment of real estate taxes acceptable to the board of directors as defined by policy.
(6) (g) Documentation of types of existing closed-end or open-end mortgages and balances or potential balances outstanding from all other lenders holding liens senior to the credit union mortgage.
(7) (2) The credit union shall maintain a general ledger accounting system which clearly segregates real estate loans for reporting and statutory calculation purposes.
SECTION 5. DFI-CU 56.01 is amended to read:
