Amendment SSA1-SB274

LRBs0287/1

RJM:cmh:hmh

1999 - 2000 LEGISLATURE

SENATE SUBSTITUTE AMENDMENT 1, TO 1999 SENATE BILL 274

February 8, 2000 - Offered by Senator Moore.

SB274-SSA1,1,9 An Act to repeal 186.235 (16) (b), 186.41 (1) (d), 186.41 (6) (b) and 186.41 (8); to renumber 186.235 (16) (a) and 186.41 (6) (a); to renumber and amend 186.41 (1) (a) and 186.41 (1) (c); to amend 186.235 (7) (a) (intro.), 186.36, 186.41 (title), 186.41 (2) and (3), 186.41 (4) (intro.), (a) to (d) and (f), 186.41 (5) (a), (b), (c) and (cr) and 186.41 (5m); and to create 186.113 (24), 186.1155, 186.235 (7) (c), 186.235 (7m) and 186.45 of the statutes; relating to: membership, powers and operation of certain credit unions; creation of a community reinvestment requirement applicable to certain credit unions; interstate operation, merger and acquisition of credit unions; and granting rule-making authority.

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

SB274-SSA1, s. 1 Section 1. 186.113 (24) of the statutes is created to read:

SB274-SSA1,1,12 186.113 (24) Funeral trusts. Accept deposits made by members for the purpose of funding burial agreements by trusts created under s. 445.125.

SB274-SSA1, s. 2 Section 2. 186.1155 of the statutes is created to read:

SB274-SSA1,2,4 186.1155 Enhanced credit unions. (1) Definition. In this section, "enhanced credit union" means a credit union that has been issued a certificate of authority under sub. (2) (d).

SB274-SSA1,2,8 (2) Certification. (a) Application. A credit union may apply to be certified as an enhanced credit union by filing a written application with the office of credit unions. The written application shall contain all information required by the office of credit unions and shall be on a form required by the office of credit unions.

SB274-SSA1,2,11 (b) Eligibility. The office of credit unions may approve an application for certification as an enhanced credit union if the credit union filing the application achieves a rating of 3 or better in the assessment under par. (c).

SB274-SSA1,2,21 (c) Assessment of applicant's community reinvestment performance. For each credit union that files an application under par. (a), the office of credit unions shall assess the performance of the credit union in helping to meet the credit needs of its community, consistent with safe and sound operation of the credit union. In making this assessment, the office of credit unions shall consider factors that are substantially the same as the factors under sub. (4) (c) and may require the credit union to file any information that may assist the office of credit unions in making the assessment. Using the same 1 to 5 rating system established under sub. (4) (d) 1., the office of credit unions shall rate the credit union's performance in helping to meet the credit needs of its community.

SB274-SSA1,3,2 (d) Approval. If an applicant achieves a rating of 3 or better in the assessment under par. (c), the office of credit unions shall issue to the applicant a certificate of authority stating that the credit union is certified as an enhanced credit union. The office of credit unions may issue an amended charter to the applicant in order to reflect any necessary changes to the charter resulting from the approval of the application.

SB274-SSA1,3,9 (e) Limitation of authority and decertification. If an enhanced credit union fails to maintain a rating of 3 or better in the annual assessment performed by the office of credit unions under sub. (4) (c), the office of credit unions may limit the enhanced credit union's exercise of powers under sub. (3) and may terminate the enhanced credit union's certificate of authority issued under par. (d). An enhanced credit union may voluntarily terminate its certificate of authority issued under par. (d), under any voluntary termination procedure established by rule of the office of credit unions.

SB274-SSA1,3,11 (3) Powers, duties and prohibitions. All of the following apply to an enhanced credit union:

SB274-SSA1,3,15 (a) Purpose. Notwithstanding s. 186.01 (2), an enhanced credit union need not be incorporated for the purpose of encouraging thrift among its members, creating a source of credit at a fair and reasonable cost and providing an opportunity for its members to improve their economic and social conditions.

SB274-SSA1,3,20 (b) By-laws. The by-laws of an enhanced credit union shall establish a policy determining which individuals qualify as members of the immediate family of an individual who is qualified to be admitted to membership and, notwithstanding s. 186.02 (2) (a) 1., the by-laws of an enhanced credit union shall specify the conditions that determine eligibility for membership in the enhanced credit union.

SB274-SSA1,3,22 (c) Membership of individuals. Notwithstanding s. 186.02 (2) (b), membership in an enhanced credit union may be open to any of the following:

SB274-SSA1,4,2 1. Individuals that reside or are employed within a well-defined neighborhood, community, rural district or multicounty region, unless the office of credit unions determines that it is impractical for a particular enhanced credit union to serve the area in which the individuals reside or are employed.

SB274-SSA1,4,6 2. Employes of related industries or employes of industries that operate at least one facility within a well-defined neighborhood or urban, suburban or rural community, the limits of which are not determined by any arbitrary physical standard.

SB274-SSA1,4,16 (d) Membership of organizations. Notwithstanding s. 186.02 (2) (d), an organization or association of individuals, the majority of the directors, owners or members of which are eligible for membership, may be admitted to membership in an enhanced credit union in the same manner and under the same conditions as individuals. Notwithstanding s. 186.02 (2) (d), an organization or association that has a business location within any geographic limits of an enhanced credit union's field of membership or an organization or association that, in the ordinary course of business, provides goods and services to credit unions, credit union organizations or persons who are eligible for membership in the enhanced credit union may be admitted to membership.

SB274-SSA1,4,20 (e) Membership of family members. As determined under an enhanced credit union's by-laws and notwithstanding s. 186.02 (2) (c), members of the immediate family of an individual who is qualified to be admitted to membership in the enhanced credit union may be admitted to membership.

SB274-SSA1,5,7 (f) Investment in credit union service organizations. Unless the office of credit unions approves a higher percentage, an enhanced credit union may invest not more than 1.5% of its total assets in the capital shares or obligations of credit union service organizations that are organized to provide goods and services, in the ordinary course of business, to credit unions, credit union organizations and credit union members and that are corporations, limited partnerships, limited liability companies or other entities permitted under the laws of this state and approved by the office of credit unions. A credit union service organization under this paragraph may be subject to audit by the office of credit unions. A credit union service organization under this paragraph may provide, in addition to all of the goods and services that a credit union service corporation may provide under s. 186.11 (4) (b), any of the following:

SB274-SSA1,5,8 1. Electronic transaction services.

SB274-SSA1,5,10 2. Management, development, sale or lease of fixed assets and sale, lease or servicing of computer hardware or software.

SB274-SSA1,5,11 3. Securities brokerage services.

SB274-SSA1,5,12 4. Travel agency services.

SB274-SSA1,5,17 (g) Branch offices. Notwithstanding s. 186.113 (1), an enhanced credit union, with the approval of the office of credit unions, may establish branch offices inside or outside of this state. Permanent records may be maintained at branch offices established under this paragraph. In this paragraph, "branch office" does not include a remote terminal, a limited services office or a service center.

SB274-SSA1,5,21 (h) Limited services offices. An enhanced credit union may not establish a limited services office under s. 186.113 (1m), except that this paragraph does not apply to a limited services office that is established before the effective date of this paragraph .... [revisor inserts date].

SB274-SSA1,5,23 (i) Trust services and related deposits. Notwithstanding s. 186.113 (6) (b) and (c), an enhanced credit union may do any of the following:

SB274-SSA1,6,3 1. Act as a trustee or custodian of member tax deferred retirement funds, individual retirement accounts, medical savings accounts or other employe benefit accounts or funds permitted by federal law to be deposited in a credit union.

SB274-SSA1,6,5 2. Act as a depository for member qualified and nonqualified deferred compensation funds as permitted by federal law.

SB274-SSA1,6,8 (j) Conditional sales contracts. Notwithstanding par. (k), an enhanced credit union may purchase or acquire conditional sales contracts or similar instruments executed by credit union members.

SB274-SSA1,6,11 (k) Purchase of certain assets. Subject to ss. 186.31 and 186.41, an enhanced credit union, with the prior approval of the office of credit unions, may purchase any of the following assets of another lender or seller:

SB274-SSA1,6,12 1. Loans and lines of credit.

SB274-SSA1,6,13 2. Liens and security interests.

SB274-SSA1,6,14 3. Leases.

SB274-SSA1,6,15 4. Conditional sales contracts.

SB274-SSA1,6,16 5. Investments, as permitted under s. 186.11 (1) to (3).

SB274-SSA1,6,20 (4) Community reinvestment. (a) Required information. An enhanced credit union shall prepare a community credit needs statement for filing with the office of credit unions under par. (b) and shall post a community credit needs notice indicating the enhanced credit union's numerical rating under par. (d) 1.

SB274-SSA1,7,2 (b) Filing. No later than March 1 of each year, an enhanced credit union shall file with the office of credit unions a community credit needs statement. In addition to the community credit needs statement, the office of credit unions may require an enhanced credit union to file additional information in making an assessment of the enhanced credit union under par. (c) and in considering an application of the enhanced credit union that is listed under par. (e).

SB274-SSA1,7,8 (c) Annual assessment. The office of credit unions shall assess annually an enhanced credit union's performance in helping to meet the credit needs of its community, consistent with safe and sound operation of the enhanced credit union. In making an assessment under this paragraph, the office of credit unions shall consider the enhanced credit union's community credit needs statement and all of the following:

SB274-SSA1,7,10 1. Activities conducted by the enhanced credit union to determine the credit needs of its community.

SB274-SSA1,7,12 2. The enhanced credit union's marketing efforts to make community members aware of the credit services offered by the enhanced credit union.

SB274-SSA1,7,15 3. Participation by the board of directors of the enhanced credit union in formulating the enhanced credit union's policies and reviewing the enhanced credit union's performance in helping to meet the credit needs of its community.

SB274-SSA1,7,20 4. Practices that the enhanced credit union, or an officer, employe or director of the enhanced credit union, engages in that are intended to discourage, or have the effect of discouraging, applications for the types of credit identified in any plan prepared by the enhanced credit union that specifies the enhanced credit union's goals for helping to meet the credit needs of its community.

SB274-SSA1,7,22 5. The geographic distribution of the enhanced credit union's credit applications, extensions and denials.

SB274-SSA1,7,23 6. Evidence of prohibited discriminatory or other illegal credit practices.

SB274-SSA1,7,25 7. The enhanced credit union's record of opening and closing branch offices and of providing services at branch offices.

SB274-SSA1,8,2 8. The enhanced credit union's participation in, and investments in, community development and redevelopment projects and programs.

SB274-SSA1,8,6 9. The enhanced credit union's origination, to members of its community, of residential mortgage loans, housing rehabilitation or improvement loans and small farm loans, and the enhanced credit union's purchase of these types of loans made by others to members of its community.

SB274-SSA1,8,9 10. The enhanced credit union's participation in government-insured, guaranteed or subsidized loan programs for housing, small businesses or small farms.

SB274-SSA1,8,12 11. The enhanced credit union's ability to meet the credit needs of its community based on the enhanced credit union's size and financial condition, local economic conditions or other factors.

SB274-SSA1,8,14 12. The geographic distribution and use of remote terminals under s. 186.113 (15) that are operated by the enhanced credit union.

SB274-SSA1,8,16 13. The enhanced credit union's participation in credit counseling services in its community.

SB274-SSA1,8,18 14. Any other factor that affects an enhanced credit union's performance in helping to meet the credit needs of its community.

SB274-SSA1,9,2 (d) Assessment report; confidentiality. 1. The office of credit unions shall prepare a written report summarizing the results of each assessment under par. (c). The office of credit unions shall provide the enhanced credit union that is the subject of the report with a copy of the report and, except as provided in subd. 2., shall make the report available for public inspection. The report shall include a numerical rating of the enhanced credit union's performance in helping to meet the credit needs of its community. The numerical rating shall use a 1 to 5 rating system, with one representing excellent performance and 5 representing unsatisfactory performance.

SB274-SSA1,9,7 2. The office of credit unions may not make available for public inspection under subd. 1. any statements obtained or made by the office of credit unions in the course of the assessment that, in the discretion of the office of credit unions, are too sensitive or speculative in nature to disclose to the public, or any personal financial information.

SB274-SSA1,9,11 (e) Use of assessment upon consideration of certain applications. The office of credit unions shall consider the assessment of an enhanced credit union under par. (c) whenever the office of credit unions considers any of the following applications from the enhanced credit union:

SB274-SSA1,9,12 1. An application to invest under s. 186.11 (1) (e).

SB274-SSA1,9,13 2. An application to establish a branch office under sub. (3) (g).

SB274-SSA1,9,15 3. An application to operate a remote terminal in a mobile facility under s. 186.113 (15) (a).

SB274-SSA1,9,16 4. An application to merge with a credit union under s. 186.31.

SB274-SSA1,9,18 5. An application to acquire or merge with an out-of-state credit union under s. 186.41 (2) (a).

SB274-SSA1,9,21 (f) Assessment as basis for denial of application. The office of credit unions may use the assessment of an enhanced credit union under par. (c) as a basis for denying an application of the enhanced credit union that is listed under par. (e).

SB274-SSA1,9,25 (g) Hearing. The office of credit unions may hold a public hearing on an application of an enhanced credit union that is listed under par. (e) if the office of credit unions receives an objection to the application that is based on any of the factors used in making the assessment under par. (c).

SB274-SSA1,10,5 (5) Administration. The office of credit unions, with the approval of the credit union review board, shall promulgate rules for the efficient administration of this section. The rules shall include the form and content of a community credit needs statement and the form and content of, and acceptable manner of posting, a community credit needs notice under sub. (4) (a).

SB274-SSA1, s. 3 Section 3. 186.235 (7) (a) (intro.) of the statutes is amended to read:

SB274-SSA1,10,12 186.235 (7) (a) (intro.) Employes Except as provided in s. 186.1155 (4) (d) 1., employes of the office of credit unions and members of the review board shall keep secret all the facts and information obtained in the course of examinations, except or contained in any report provided by a credit union other than any semiannual or quarterly financial report that is regularly filed with the office of credit unions. This requirement does not apply in any of the following situations:

SB274-SSA1, s. 4 Section 4. 186.235 (7) (c) of the statutes is created to read:

SB274-SSA1,10,18 186.235 (7) (c) If any person mentioned in par. (a) discloses any information about the private account or transactions of a credit union or any information obtained in the course of an examination of a credit union, except as provided in pars. (a) and (b) and s. 186.1155 (4) (d) 1., that person may be required to forfeit not less than $100 nor more than $1,000.

SB274-SSA1, s. 5 Section 5. 186.235 (7m) of the statutes is created to read:

SB274-SSA1,10,22 186.235 (7m) Return of examination reports. Examination reports possessed by a credit union are confidential, remain the property of the office of credit unions and shall be returned to the office of credit unions immediately upon request.

SB274-SSA1, s. 6 Section 6. 186.235 (16) (a) of the statutes is renumbered 186.235 (16).

SB274-SSA1, s. 7 Section 7. 186.235 (16) (b) of the statutes is repealed.

SB274-SSA1, s. 8 Section 8. 186.36 of the statutes is amended to read:

SB274-SSA1,11,4 186.36 Sale of insurance in credit unions. Any officer or employe of a credit union, when acting as an agent for the sale of insurance on behalf of the credit union, shall pay all commissions received from the sale of credit life insurance or credit accident and sickness insurance to the credit union.

SB274-SSA1, s. 9 Section 9. 186.41 (title) of the statutes is amended to read: