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LRB-5743/1
ARG:kjf&skw
2019 - 2020 LEGISLATURE
March 26, 2020 - Introduced by Representative Stafsholt, cosponsored by Senator
Kooyenga. Referred to Committee on Rules.
AB1032,1,8 1An Act to repeal 186.235 (21); to renumber and amend 186.11 (2); to amend
2186.07 (7), 186.098 (1), 186.113 (15) (a), 186.115 (2), 186.118 (1), 186.118 (3) (a)
3(intro.), 186.118 (4), 186.118 (5), 186.235 (14) (c), 214.04 (21) (b), 215.13 (46) (a)
41., 221.0303 (2), 227.10 (2m), 227.14 (2) (a) 8., 227.20 (3) (c), 227.24 (1) (b) and
5227.24 (1) (d); and to create 186.11 (2) (b) and (c), 186.113 (26), 186.118 (3m)
6and 227.01 (13) (yu) of the statutes; relating to: authorized activities and
7operations of credit unions, automated teller machines of financial institutions,
8and repealing rules promulgated by the Department of Financial Institutions.
Analysis by the Legislative Reference Bureau
This bill makes various changes related to the authorized activities and
operations of credit unions. The bill also repeals certain administrative rules related
to the placement or operation of automated teller machines (ATMs) by financial
institutions.
Under current law, the Office of Credit Unions (OCU) in the Department of
Financial Institutions regulates credit unions in this state. Current law specifies
various authorized activities and powers of credit unions.
Parity with federally chartered credit unions
Current law includes the following provisions relating to parity between
federally chartered and state chartered credit unions:

1. OCU must establish, by rule, a list of activities and powers incidental to the
business of a credit union that are authorized for federally chartered credit unions
as of April 18, 2014. A credit union chartered under Wisconsin law (Wisconsin
chartered credit union) may engage in any activity or exercise any power listed by
OCU, in addition to exercising any other power authorized for the credit union. After
April 18, 2014, if any additional activity or power incidental to the business of a credit
union becomes authorized for federally chartered credit unions, OCU must make a
determination, within 30 days after the activity or power becomes authorized, as to
whether the activity or power should also be authorized for Wisconsin chartered
credit unions. In making this determination, OCU must consider specified factors
and, if OCU determines that the activity or power authorized for federally chartered
credit unions should also be authorized for Wisconsin chartered credit unions, OCU
must, by rule, add the activity or power to the list. An OCU rule that includes an
activity or power in the list is exempt from most administrative rule-making
requirements, but deleting an activity or power from the list or modifying the activity
or power on the list requires OCU to go through the normal rule-making process.
2. A credit union may undertake any activity, exercise any power, or offer any
financially related product or service that any other provider of financial products
or services may undertake, exercise, or provide or that OCU finds to be financially
related if OCU has specified, by rule, the activity, power, product, or service as one
that may be undertaken, exercised, or offered by a credit union.
3. OCU may, by rule, authorize credit unions to exercise any power under the
notice, disclosure, or procedural requirements governing federally chartered credit
unions or to make any loan or investment or exercise any right, power, or privilege
of federally chartered credit unions permitted under federal law, if the credit union
review board approves. Such a rule may not restrict powers granted credit unions
or affect provisions of the Wisconsin Consumer Act.
This bill makes the following changes to these provisions: 1) with respect to
item 1., above, 30 days after an activity or power becomes authorized for federally
chartered credit unions, the activity or power also becomes authorized for Wisconsin
chartered credit unions unless otherwise noted by an OCU general order within this
30-day period; 2) with respect to item 2., above, OCU specifies the activity, power,
product, or service that may be undertaken, exercised, or offered by a credit union
by OCU guidance, not OCU rule; and 3) item 3., above, is repealed.
Credit union property
Under current law, a credit union may purchase, hold, and dispose of property
as necessary for or incidental to its operations.
This bill specifies that a credit union may purchase, lease, hold, and convey
certain real estate, including real estate conveyed to the credit union in satisfaction
of a debt or foreclosed real estate, subject to guidance by the OCU and a five-year
limit on holding the real estate.
Off-site ATMs
Under current law, a bank, savings bank, savings and loan association, or credit
union (collectively, financial institution) may acquire, place, and operate, or
participate in the acquisition, placement, and operation of, at locations away from

the financial institution, what is variously referred to as customer bank
communications terminals, remote terminals, or remote service units, in accordance
with rules established by OCU and DFI's Division of Banking (division). These
devices are terminals or other facilities that are not located at a financial institution
and through which customers and financial institutions may engage in electronic
transactions that are incidental to the conduct of the business of financial
institutions (collectively, off-site ATMs).
Under current rules of OCU and the division, a financial institution must
provide advance written notice to OCU or the division before acquiring, placing, or
operating an off-site ATM. This bill repeals these rules.
Current statutes provide that OCU or the division may, by order, authorize the
installation and operation of an off-site ATM in a mobile facility, after notice and
hearing upon the proposed service stops of the mobile facility. This bill repeals these
provisions.
Vacancy on board of directors
Current law allows the board of directors of a credit union to remove a director.
Within 60 days after the date of removal of a director, the board of directors must
appoint a director to fill the vacancy. This bill requires a credit union's board of
directors to fill any vacancy, including a vacancy resulting from removal of a director,
within 90 days.
Nonmember loan participation
Under current law, a credit union may make loans to members upon terms
approved by the credit committee, loan officer, or board of directors.
This bill specifies that a credit union may allow nonmember loan participation
as a joint applicant, co-obligor, cosigner, co-borrower, surety, or guarantor.
Supplemental capital
This bill specifies that credit unions may issue or offer supplemental forms of
capital approved by OCU.
Charges for credit union examinations
Current law generally requires OCU to conduct, at least once every 18 months,
examinations of credit unions in which OCU examines the credit union's records and
accounts. OCU must charge the credit union for the cost of the examination and the
credit union must pay the charge on the day on which the examination is completed.
The bill requires the credit union to pay the charge within 30 days of the
completion of OCU's examination.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB1032,1 1Section 1. 186.07 (7) of the statutes is amended to read:
AB1032,4,22 186.07 (7) Vacancies. Within 60 90 days after the date of a removal vacancy
3on the board of directors
, the board of directors shall appoint a director to fill the

1vacancy. The appointee shall serve until a successor is elected at the next annual
2membership meeting.
AB1032,2 3Section 2. 186.098 (1) of the statutes is amended to read:
AB1032,4,84 186.098 (1) Loan approval. The credit union may make loans to members upon
5terms approved by the credit committee, loan officer, or board of directors. The credit
6union may also permit a nonmember to participate in an obligation or extension of
7credit to a member as a joint applicant, co-obligor, cosigner, co-borrower, surety, or
8guarantor.
AB1032,3 9Section 3. 186.11 (2) of the statutes is renumbered 186.11 (2) (a) and amended
10to read:
AB1032,4,1211 186.11 (2) (a) A Subject to pars. (b) and (c), a credit union may purchase, hold,
12and dispose of property as necessary for or incidental to its operations.
AB1032,4 13Section 4. 186.11 (2) (b) and (c) of the statutes are created to read:
AB1032,4,1514 186.11 (2) (b) Subject to guidance issued by the office of credit unions, a credit
15union may purchase, lease, hold, and convey the following types of real estate:
AB1032,4,1716 1. Real estate conveyed to the credit union in satisfaction of debts previously
17contracted in the course of the credit union's business.
AB1032,4,2018 2. Real estate purchased at sale on judgments, decrees, or mortgage
19foreclosures under securities held by the credit union, but a credit union may not bid
20at a sale a larger amount than is necessary to satisfy its debts and costs.
AB1032,4,2221 3. Subject to the approval of the office of credit unions, real estate acquired or
22held by the credit union for any other purpose.
AB1032,4,2423 (c) Real estate acquired under par. (b) may not be held for more than 5 years,
24unless an extension is granted by the office of credit unions.
AB1032,5 25Section 5. 186.113 (15) (a) of the statutes is amended to read:
AB1032,5,18
1186.113 (15) (a) Directly or indirectly, acquire, place, and operate, or
2participate in the acquisition, placement, and operation of, at locations other than
3its offices, remote terminals, in accordance with rules established by the office of
4credit unions. The rules shall provide that any remote terminal shall be available
5for use, on a nondiscriminatory basis, by any state or federal credit union which has
6its principal place of business in this state, by any other credit union obtaining the
7consent of a state or federal credit union which has its principal place of business in
8this state and is using the terminal and by all members designated by a credit union
9using the terminal. This subsection does not authorize a credit union which has its
10principal place of business outside the state to conduct business as a credit union in
11this state. The remote terminals also shall be available for use, on a
12nondiscriminatory basis, by any state or national bank, state or federal savings bank
13or state or federal savings and loan association, whose home office is located in this
14state, if the bank, savings bank or savings and loan association requests to share its
15use, subject to the joint rules established under s. 221.0303 (2). The office of credit
16unions by order may authorize the installation and operation of a remote terminal
17in a mobile facility, after notice and hearing upon the proposed service stops of the
18mobile facility.
AB1032,6 19Section 6 . 186.113 (26) of the statutes is created to read:
AB1032,5,2220 186.113 (26) Supplemental capital. Issue or otherwise offer supplemental
21forms of capital in such form and with such conditions as are approved by the office
22of credit unions.
AB1032,7 23Section 7. 186.115 (2) of the statutes is amended to read:
AB1032,6,624 186.115 (2) Rules Guidance. The activities, powers, products , and services
25that may be undertaken, exercised, or offered by credit unions under sub. (1) are

1limited to those specified by rule of guidance issued by the office of credit unions. The
2office of credit unions may direct any credit union to cease any activity, the exercise
3of any power, or the offering of any product or service authorized by rule this
4guidance
. Among the factors that the office of credit unions may consider in so
5directing a credit union are the credit union's net worth, assets, management rating
6and liquidity ratio and its ratio of net worth to assets.
AB1032,8 7Section 8 . 186.118 (1) of the statutes is amended to read:
AB1032,6,118 186.118 (1) In addition to any activity or power authorized under ss. 186.098,
9186.11, 186.113, 186.114, and 186.115, and 186.235 (21), a credit union organized
10under s. 186.02 may engage in any activity or exercise any power that is listed by the
11office of credit unions under sub. (2) (a) or, (3) (b) 1., or (3m) (b) 1.
AB1032,9 12Section 9 . 186.118 (3) (a) (intro.) of the statutes is amended to read:
AB1032,6,2013 186.118 (3) (a) (intro.) After April 18, 2014, and before the effective date of this
14paragraph .... [LRB inserts date],
if any activity or power incidental to the business
15of a credit union that is not listed under sub. (2) (a) becomes authorized for federally
16chartered credit unions, within 30 days after the activity or power becomes
17authorized the office of credit unions shall make a determination as to whether the
18activity or power should also be authorized for credit unions organized under s.
19186.02. In making this determination, the office of credit unions shall consider the
20degree to which the following apply with respect to the activity or power:
AB1032,10 21Section 10 . 186.118 (3m) of the statutes is created to read:
AB1032,7,522 186.118 (3m) (a) On or after the effective date of this paragraph .... [LRB inserts
23date], if any activity or power incidental to the business of a credit union that is not
24listed under sub. (2) (a) or (3) (b) 1. becomes authorized for federally chartered credit
25unions, 30 days after the activity or power becomes authorized the activity or power

1shall also be authorized for credit unions organized under s. 186.02 unless otherwise
2noted by general order of the office of credit unions within this 30-day period. In
3making the determination whether to issue such a general order, the office of credit
4unions shall consider the degree to which the following apply with respect to the
5activity or power:
AB1032,7,76 1. It is necessary, convenient, or useful for effectively carrying out the mission
7or business of a credit union.
AB1032,7,98 2. It is the functional equivalent or logical outgrowth of activities or powers that
9are part of the mission or business of a credit union.
AB1032,7,1210 3. It involves risks similar in nature to those already assumed as part of the
11business of the credit union and it is not likely to be detrimental to the overall safety
12and soundness of the credit union.
AB1032,7,1613 (b) 1. The office of credit unions shall promulgate a rule adding an activity or
14power to the list of activities and powers established under subs. (2) (a) and (3) (b)
151. unless the office of credit unions has issued a general order otherwise as provided
16in par. (a).
AB1032,7,2017 2. The office of credit unions shall submit the proposed rule under subd. 1. to
18the legislative reference bureau in an electronic format approved by the legislative
19reference bureau, and the legislative reference bureau shall publish the proposed
20rule in the notice section of the Wisconsin administrative register under s. 35.93.
AB1032,8,221 3. Sections 227.114 (4) and (6), 227.115, 227.135, 227.137, 227.14 (2) (a) 6., (2g),
22(4), and (4m), 227.15, 227.16, 227.17, 227.18, 227.185, 227.19, and 227.30 do not
23apply to the office of credit unions in promulgating a rule under subd. 1. or to any rule
24promulgated by the office of credit unions under subd. 1. Guidelines prescribed by

1executive order of the governor do not apply to the office of credit unions in
2promulgating a rule under subd. 1.
AB1032,11 3Section 11 . 186.118 (4) of the statutes is amended to read:
AB1032,8,64 186.118 (4) The office of credit unions shall publish and maintain on the
5department of financial institutions' Internet site the list of activities and powers
6under sub. subs. (2) (a) , (3) (b) 1., and (3m) (b) 1.
AB1032,12 7Section 12 . 186.118 (5) of the statutes is amended to read:
AB1032,8,118 186.118 (5) If the office of credit unions promulgates a rule listing an activity
9or power as provided in sub. (2) (a) or, (3) (b) 1., or (3m) (b) 1., subs. (2) (b) and (c) and,
10(3) (b) 2. and 3., and (3m) (b) 2. and 3. do not apply to any subsequent rule modifying
11or eliminating the listed activity or power.
AB1032,13 12Section 13. 186.235 (14) (c) of the statutes is amended to read:
AB1032,8,2013 186.235 (14) (c) In addition to the annual assessment, each credit union shall
14be charged for the cost of every examination made. The examination charge shall
15include the prorated amount of salaries and expenses of all examiners and other
16employees actively engaged in the examination, the salaries and expenses of any
17other person whose services are required in connection with the examination and
18any examination report and any other expenses which may be directly attributable
19to the examination. The examination charge shall be paid on within 30 days of the
20day on which the examination is completed.
AB1032,14 21Section 14. 186.235 (21) of the statutes is repealed.
AB1032,15 22Section 15. 214.04 (21) (b) of the statutes is amended to read:
AB1032,9,1223 214.04 (21) (b) The rules of the division shall provide that any remote service
24unit shall be available for use, on a nondiscriminatory basis, by any state or federal
25savings bank which has its principal place of business in this state, by any other state

1or federal savings bank obtaining the consent of a state or federal savings bank that
2has its principal place of business in this state and is using the terminal and by all
3customers designated by a savings bank using the unit. This paragraph does not
4authorize a savings bank which has its principal place of business outside this state
5to conduct business as a savings bank in this state. A remote service unit shall be
6available for use, on a nondiscriminatory basis, by any credit union, state or national
7bank or state or federal savings and loan association, whose home office is located
8in this state, if the credit union, bank or savings and loan association requests to
9share its use, subject to joint rules established by the division of banking, the office
10of credit unions and the division. The division by order may authorize the
11installation and operation of a remote service unit in a mobile facility, after notice
12and hearing upon the proposed service stops of the mobile facility.
AB1032,16 13Section 16. 215.13 (46) (a) 1. of the statutes is amended to read:
AB1032,9,2514 215.13 (46) (a) 1. Directly or indirectly, acquire, place, and operate, or
15participate in the acquisition, placement, and operation of, at locations other than
16its home or branch offices, remote service units, in accordance with rules established
17by the division. Remote service units established in accordance with such rules are
18not subject to sub. (36), (39), (40) or (47) or s. 215.03 (8). The rules of the division shall
19provide that any such remote service unit shall be available for use, on a
20nondiscriminatory basis, by any state or federal savings and loan association which
21has its principal place of business in this state, by any other savings and loan
22association obtaining the consent of a state or federal savings and loan association
23which has its principal place of business in this state and is using the terminal and
24by all customers designated by a savings and loan association using the unit. This
25paragraph does not authorize a savings and loan association which has its principal

1place of business outside this state to conduct business as a savings and loan
2association in this state. The remote service units also shall be available for use, on
3a nondiscriminatory basis, by any credit union, state or national bank or state or
4federal savings bank, whose home office is located in this state, if the credit union,
5bank or savings bank requests to share its use, subject to the joint rules established
6under s. 221.0303 (2). The division by order may authorize the installation and
7operation of a remote service unit in a mobile facility, after notice and hearing upon
8the proposed service stops of the mobile facility.
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