SB520: Bill Text

Record retention by financial institutions

Under current statutes, a credit union, state bank, savings and loan association (S&L), or savings bank may have its records reproduced by a photographic or optical imaging process that accurately and permanently reproduces the originals and then dispose of the originals after first obtaining the written consent of, respectively, OCU or the Division of Banking (division) in DFI. The reproduced records are thereafter treated the same as originals.

Under this bill, after having its records accurately reproduced in this manner, a credit union, state bank, S&L, or savings bank is not required to obtain the written consent of OCU or the division to thereafter dispose of the originals.

Under current statutes, a state bank or an S&L may destroy or dispose of its records that have become obsolete after first obtaining the written consent of the division.

This bill repeals these statutory provisions relating to destruction of obsolete records.

Under current statutes, the division must, by rule, prescribe periods of time for which savings banks must retain records and after the expiration of which the savings bank may destroy those records.

Under this bill, the division must by rule prescribe standards by which savings banks must retain records and may thereafter destroy those records.

Under current rules of OCU and the division, each credit union, savings bank, and S&L must retain its records in a manner consistent with prudent business practices and in accordance with other provisions of state and federal law. For credit unions, the record retention system utilized must be able to produce accurate and verifiable records and include an index to the retained forms. Each credit union, savings bank, and S&L must retain its records for at least the minimum period specified in a particular publication of the Financial Managers Society, Inc. (FMS). A credit union, savings bank, or S&L may destroy its records at the end of the applicable minimum retention period specified in the applicable FMS publication unless a longer retention period is required by other state or federal law. In the destruction of records, the credit union, savings bank, or S&L must take reasonable precautions to assure the confidentiality of information in the records.

The division's current rules for state banks include a detailed schedule setting forth minimum record retention periods according to record type. A state bank may destroy its records after the applicable minimum retention period has expired.

This bill modifies the rules of OCU and the division to eliminate the requirement that credit union, savings bank, and S&L records must be retained for at least the minimum period specified in the applicable FMS publication.

The bill also eliminates the division's rule establishing a schedule of required minimum retention periods, according to record type, for state banks. The bill specifies that, subject to the requirement that records be retained in a manner consistent with prudent business practices and in accordance with other provisions of state and federal law, a credit union, state bank, S&L, or savings bank may destroy its records. In the destruction of records, the credit union, state bank, S&L, or savings bank must take reasonable precautions to assure the confidentiality of information in the records. For state banks, S&Ls, and savings banks the bill specifies that the record retention system must be able to accurately produce records, and for credit unions the bill eliminates the requirement that the record retention system include an index to retained forms.

Technical corrections

The bill makes other minor, clarifying, technical, or nonsubstantive changes to OCU's rules.

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:

SB520,1 Section 1. 13.92 (4) (bm) of the statutes is created to read:

SB520,7,11 13.92 (4) (bm) If 2 or more rules filed under s. 227.20 or modified under s. 227.265 affect the same unit of the Wisconsin administrative code without taking cognizance of the effect thereon of the other rules and if the legislative reference bureau finds that there is no mutual inconsistency in the changes made by each such rule, the legislative reference bureau shall incorporate the changes made by each rule into the text of the unit and document the incorporation in a note to the unit. For each such incorporation, the legislative reference bureau shall include in a correction bill a provision formally validating the incorporation. Section 227.27 (2) is not affected by printing decisions made by the legislative reference bureau under this paragraph.

SB520,2 Section 2. 13.92 (4) (c) of the statutes is amended to read:

SB520,7,14 13.92 (4) (c) The legislative reference bureau may insert in the Wisconsin administrative code a note explaining any change made under par. (b) or (bm).

SB520,3 Section 3. 13.92 (4) (d) of the statutes is amended to read:

SB520,8,2 13.92 (4) (d) Sections 227.114, 227.116, 227.135 , and 227.14 to 227.24 do not apply to any change made by the legislative reference bureau under par. (b) or (bm).

SB520,4 Section 4. 13.92 (4) (e) of the statutes is amended to read:

SB520,8,5 13.92 (4) (e) The legislative reference bureau shall prepare and keep on file a record of each change made under par. (b) or (bm).

SB520,5 Section 5. 13.92 (4) (f) of the statutes is amended to read:

SB520,8,8 13.92 (4) (f) The legislative reference bureau shall notify the agency involved of each change made under par. (b) or (bm).

SB520,6 Section 6. 35.93 (2) (b) 4. of the statutes, as affected by 2013 Wisconsin Act 20, is amended to read:

SB520,8,13 35.93 (2) (b) 4. Copies of all rules filed with the legislative reference bureau under s. 227.20 (1) or modified under s. 227.265 since the compilation of the preceding register, including emergency rules filed under s. 227.24 (3).

SB520,7 Section 7. 35.93 (2) (c) 1. of the statutes, as affected by 2013 Wisconsin Act 20, is amended to read:

SB520,8,18 35.93 (2) (c) 1. Each chapter of the Wisconsin administrative code that has been affected by rules filed with legislative reference bureau under s. 227.20 (1) or modified under s. 227.265, in accordance with sub. (3) (e) 1.

SB520,8 Section 8. 35.93 (3) of the statutes is amended to read:

SB520,9,8 35.93 (3) The legislative reference bureau shall compile and deliver to the department for printing copy for a register which shall contain all the rules filed under s. 227.20 or modified under s. 227.265 since the compilation of rules for the preceding issue of the register was made and those executive orders which are to be in effect for more than 90 days or an informative summary thereof. The complete register shall be compiled and published before the first day of each month and a notice section of the register shall be compiled and published before the 15th day of each month. Each issue of the register shall contain a title page with the name "Wisconsin administrative register", the number and date of the register, and a table of contents. Each page of the register shall also contain the date and number of the register of which it is a part in addition to the other necessary code titles and page numbers. The legislative reference bureau may include in the register such instructions or information as in the bureau's judgment will help the user to correctly make insertions and deletions in the code and to keep the code current.

SB520,9 Section 9. 35.93 (3) (e) (intro.) of the statutes, as affected by 2013 Wisconsin Act 20, is amended to read:

SB520,9,15 35.93 (3) (e) (intro.) The legislative reference bureau shall incorporate into the appropriate chapters of the Wisconsin administrative code each permanent rule filed with the legislative reference bureau under s. 227.20 (1) or modified under s. 227.265 and, for each chapter of the administrative code affected by a rule, do all of the following:

SB520,10 Section 10. 35.93 (3) (e) 1. of the statutes, as affected by 2013 Wisconsin Act 20, is amended to read:

SB520,9,23 35.93 (3) (e) 1. Publish the chapter in the appropriate end-of-month register in accordance with the filing deadline for publication established in the rules procedures manual published under s. 227.15 (7) or, in an end-of-month register agreed to by the submitting agency and the legislative reference bureau , or, in the case of a rule modified under s. 227.265, in the end-of-month register for the month in which the bill modifying the rule is enacted.

SB520,11 Section 11. 186.098 (9m) of the statutes is amended to read:

SB520,10,3 186.098 (9m) Participation loans. Subject to rules prescribed by the office of credit unions, a A credit union may participate with other lenders in a loan of any type that the credit union may otherwise make.

SB520,12 Section 12. 186.113 (7) of the statutes is amended to read:

SB520,10,8 186.113 (7) Conditional sales contracts Acquiring interests in credit sales transactions. Purchase or acquire conditional sales contracts or similar instruments executed by interests in credit sales transactions involving credit union members.

SB520,13 Section 13. 186.118 of the statutes is created to read:

SB520,10,14 186.118 Incidental powers parity with federal credit unions. (1) In addition to any activity or power authorized under ss. 186.098, 186.11, 186.113, 186.115, and 186.235 (21), a credit union organized under s. 186.02 may engage in any activity or exercise any power that is listed by the office of credit unions under sub. (2) or (3) (b).

SB520,10,18 (2) The office of credit unions shall publish on the department of financial institutions' Internet site a list of activities and powers incidental to the business of a credit union that are authorized for federally chartered credit unions as of the effective date of this subsection .... [LRB inserts date].

SB520,11,2 (3) (a) After the effective date of this paragraph .... [LRB inserts date], if any activity or power incidental to the business of a credit union that is not listed under sub. (2) becomes authorized for federally chartered credit unions, within 30 days after the activity or power becomes authorized the office of credit unions shall make a determination as to whether the activity or power should also be authorized for credit unions organized under s. 186.02. In making this determination, the office of credit unions shall consider the degree to which the following apply with respect to the activity or power:

SB520,11,4 1. It is necessary, convenient, or useful for effectively carrying out the mission or business of a credit union.

SB520,11,6 2. It is the functional equivalent or logical outgrowth of activities or powers that are part of the mission or business of a credit union.

SB520,11,9 3. It involves risks similar in nature to those already assumed as part of the business of the credit union and it is not likely to be detrimental to the overall safety and soundness of the credit union.

SB520,11,13 (b) If the office of credit unions determines under par. (a) that the activity or power authorized for federally chartered credit unions should also be authorized for credit unions organized under s. 186.02, the office of credit unions shall add the activity or power to the list under sub. (2).

SB520,14 Section 14. 186.71 (1) of the statutes is amended to read:

SB520,11,21 186.71 (1) Any credit union may cause any or all records kept by such credit union to be recorded, copied or reproduced by any photostatic, photographic or miniature photographic process or by optical imaging if the process employed correctly, accurately and permanently copies, reproduces or forms a medium for copying, reproducing or recording the original record on a film or other durable material. A credit union may thereafter dispose of the original record after first obtaining the written consent of the office of credit unions.

SB520,15 Section 15. 214.75 (4) of the statutes is amended to read:

SB520,12,5 214.75 (4) The division shall by rule prescribe periods of time for standards by which savings banks must retain records and after the expiration of which, the savings bank may destroy those records. Liability may not accrue against the savings bank, the division or this state for destruction of records according to rules of the division promulgated under this subsection. In an action in which records of the savings bank may be called in question or demanded, a showing of the expiration of the retention period compliance with the division's standards shall be sufficient to excuse for failure any inability to produce the records.

SB520,16 Section 16. 214.75 (5) (a) of the statutes is amended to read:

SB520,12,15 214.75 (5) (a) A savings bank may cause records kept by the savings bank to be recorded, copied or reproduced by any photostatic, photographic or miniature photographic process or by optical imaging if the process employed correctly, accurately and permanently copies, reproduces or forms a medium for copying, reproducing or recording the original record on a film or other durable material. A savings bank may thereafter dispose of the original record after obtaining the written consent of the division. This subsection, except that part requiring written consent of the division, is applicable to federal savings banks if it does not contravene federal law.

SB520,17 Section 17. 215.26 (3) of the statutes is repealed.

SB520,18 Section 18. 215.26 (4) (a) of the statutes is amended to read:

SB520,13,2 215.26 (4) (a) Any association may cause any or all records kept by such association to be recorded, copied or reproduced by any photostatic, photographic or miniature photographic process or by optical imaging if the process employed correctly, accurately and permanently copies, reproduces or forms a medium for copying, reproducing or recording the original record on a film or other durable material. An association may thereafter dispose of the original record after first obtaining the written consent of the division. This section, excepting the part of it which requires written consent of the division, is applicable to federal associations insofar as it does not contravene federal law.

SB520,19 Section 19. 220.28 of the statutes is repealed.

SB520,20 Section 20. 220.285 (1) of the statutes is amended to read:

SB520,13,16 220.285 (1) Any state bank, trust company bank, licensee under ss. 138.09, 138.12, 138.14, 218.0101 to 218.0163, 218.02, 218.04, 218.05, 224.72, or 224.725 or ch. 217 may cause any or all records kept by such bank, licensee, or registered person to be recorded, copied or reproduced by any photostatic, photographic or miniature photographic process or by optical imaging if the process employed correctly, accurately and permanently copies, reproduces or forms a medium for copying, reproducing or recording the original record on a film or other durable material. A bank, may thereafter dispose of the original record. A licensee, or registered person may thereafter dispose of the original record after first obtaining the written consent of the division. This section, excepting that part of it which requires written consent of the division, is applicable to national banking associations insofar as it does not contravene federal law.

SB520,21 Section 21. 227.01 (13) (intro.) of the statutes is amended to read:

SB520,13,24 227.01 (13) (intro.) "Rule" means a regulation, standard, statement of policy, or general order of general application which has the effect of law and which is issued by an agency to implement, interpret, or make specific legislation enforced or administered by the agency or to govern the organization or procedure of the agency. "Rule" includes a modification of a rule under s. 227.265. "Rule" does not include, and s. 227.10 does not apply to, any action or inaction of an agency, whether it would otherwise meet the definition under this subsection, which:

SB520,22 Section 22. 227.01 (13) (yv) of the statutes is created to read:

SB520,14,1 227.01 (13) (yv) Relates to any determination or list under s. 186.118.

SB520,23 Section 23. 227.11 (2) (intro.) of the statutes is amended to read:

SB520,14,4 227.11 (2) (intro.) Rule-making authority is expressly conferred on an agency as follows:

SB520,24 Section 24. 227.265 of the statutes is created to read:

SB520,14,10 227.265 Repeal or modification of rules. If a bill to repeal or modify a rule is enacted, the procedures under ss. 227.114 to 227.21 and 227.26 do not apply. Instead, the legislative reference bureau shall publish the repeal or modification in the Wisconsin administrative code and register as required under s. 35.93, and the repeal or modification shall take effect as provided in s. 227.22.

SB520,25 Section 25. 227.27 (2) of the statutes is amended to read:

SB520,14,17 227.27 (2) The code shall be prima facie evidence in all courts and proceedings as provided by s. 889.01, but this does not preclude reference to or, in case of a discrepancy, control over a rule filed with the legislative reference bureau or the secretary of state under s. 227.20 or modified under s. 227.265, and the certified copy of a rule shall also and in the same degree be prima facie evidence in all courts and proceedings.

SB520,26 Section 26. DFI-Bkg 9.01 of the administrative code is repealed and recreated to read:

SB520,14,24 DFI-Bkg 9.01 Retention of records; destruction of records. (1) Each bank shall retain its records in a manner consistent with prudent business practices and in accordance with this chapter and other applicable state or federal laws, rules, and regulations. The record retention system utilized must be able to accurately produce such records.

SB520,15,4 (2) Except where a retention period is required by state or federal laws, rules, or regulations, a bank may destroy its records subject to the considerations set forth in sub. (1). In the destruction of records, the bank shall take reasonable precautions to assure the confidentiality of information in the records.

SB520,27 Section 27. DFI-Bkg 41.01 (intro.) of the administrative code is amended to read:

SB520,15,9 DFI-Bkg 41.01 License fee. (intro.) Except as provided in s. DFI-Bkg 47.04, the The following nonrefundable fees shall be submitted with an application for a license or renewal of a license under subch. III of ch. 224, Stats.:

SB520,28 Section 28. Chapter DFI-Bkg 47 of the administrative code is repealed.

SB520,29 Section 29. DFI-CU 54.05 (2) (b) 3. of the administrative code is amended to read:

SB520,15,14 DFI-CU 54.05 (2) (b) 3. A final title letter report showing the status of the current lien.

SB520,30 Section 30. DFI-CU 57.01 of the administrative code is amended to read:

SB520,15,24 DFI-CU 57.01 Retention of records. Each credit union shall retain its records in a manner consistent with prudent business practices and in accordance with this chapter and other applicable state or federal laws, rules, and regulations. The record retention system utilized must be able to accurately produce accurate and verifiable records and include an index to the retained forms. Each credit union shall retain its records for at least the minimum period specified in the January 1996 edition of the technical publication of the Financial Managers Society, Inc. of Chicago, Illinois, titled "Financial Institutions Record Retention Manual." such records.

SB520,31 Section 31. DFI-CU 57.01 (note) of the administrative code is repealed.

SB520,32 Section 32. DFI-CU 57.03 of the administrative code is amended to read:

SB520,16,7 DFI-CU 57.03 Destruction of records. Except where a longer retention period is required by other state or federal laws, rules, and or regulations, a credit union may destroy its records at the end of the applicable minimum retention period determined under subject to the considerations set forth in s. DFI-CU 57.01. In the destruction of records, the credit union shall take reasonable precautions to assure the confidentiality of information in the records.

SB520,33 Section 33. DFI-CU 59.03 (1) of the administrative code is amended to read:

SB520,16,12 DFI-CU 59.03 (1) The institutional security must have at least a "AA" rating by fitch investors service of New York City, or a comparable rating service be rated by a nationally recognized statistical rating organization in one of its 2 highest rating categories.

SB520,34 Section 34. DFI-CU 59.03 (6) of the administrative code is renumbered DFI-CU 59.03 (6) (a) and amended to read:

SB520,16,17 DFI-CU 59.03 (6) (a) An individual credit union may not invest more than $50,000 $100,000, subject to adjustment under par. (b), in securities issued by any one individual institution without the prior approval of the director of credit unions.

SB520,35 Section 35. DFI-CU 59.03 (6) (b) of the administrative code is created to read: