Chapter 186

186.091 186.091 Insurance. A credit union may purchase and maintain insurance on behalf of an individual who is an employee, agent, director or officer of the credit union against liability asserted against and incurred by the individual in his or her capacity as an employee, agent, director or officer, or arising from his or her status as an employee, agent, director or officer, regardless of whether the credit union is required or authorized to indemnify or allow expenses to the individual against the same liability under ss. 186.083, 186.085, 186.087 and 186.089.

186.091 History History: 1987 a. 13.

186.093 186.093 Definitions applicable to liability-related provisions. In ss. 186.093 to 186.096:

186.093(1) (1) “Credit union” means a cooperative, nonprofit corporation incorporated under s. 186.02.

186.093(2) (2) “Director or officer” means a natural person who serves as a director or officer of a credit union or as a member of a credit union’s credit committee.

186.093 History History: 1987 a. 13; 2005 a. 134; 2021 a. 241.

186.094 186.094 Reliance by directors or officers. Unless the director or officer has knowledge that makes reliance unwarranted, a director or officer, in discharging his or her duties to the credit union, may rely on information, opinions, reports or statements, any of which may be written or oral, formal or informal, including financial statements and other financial data, if prepared or presented by any of the following:

186.094(1) (1) An officer or employee of the credit union whom the director or officer believes in good faith to be reliable and competent in the matters presented.

186.094(2) (2) Legal counsel, certified public accountants licensed or certified under ch. 442, or other persons as to matters the director or officer believes in good faith are within the person’s professional or expert competence.

186.094(3) (3) In the case of reliance by a director, a committee of the board of directors of which the director is not a member if the director believes in good faith that the committee merits confidence.

186.094 History History: 1987 a. 13; 2001 a. 16.

186.095 186.095 Consideration of interests in addition to members’ interests. In discharging his or her duties to the credit union and in determining what he or she believes to be in the best interests of the credit union, a director or officer may, in addition to considering the effects of any action on members, consider the following:

186.095(1) (1) The effects of the action on employees, suppliers, members of the credit union and the public.

186.095(2) (2) The effects of the action on communities in which the credit union operates.

186.095(3) (3) Any other factors the director or officer considers pertinent.

186.095 History History: 1987 a. 13; 1995 a. 151.

186.096 186.096 Limited liability of directors and officers.

186.096(1) (1) Limited liability. Except as provided in subs. (2) and (3), a director or officer is not liable to the credit union, its members or creditors, or any person asserting rights on behalf of the credit union, its members or creditors, or any other person, for damages, settlements, fees, fines, penalties or other monetary liabilities arising from a breach of, or failure to perform, any duty resulting solely from his or her status as a director or officer, unless the person asserting liability proves that the breach or failure to perform constitutes any of the following:

186.096(1)(a) (a) A willful failure to deal fairly with the credit union or its members in connection with a matter in which the director or officer has a material conflict of interest.

186.096(1)(b) (b) A violation of criminal law, unless the director or officer had reasonable cause to believe his or her conduct was lawful or no reasonable cause to believe his or her conduct was unlawful.

186.096(1)(c) (c) A transaction from which the director or officer derived an improper personal profit.

186.096(1)(d) (d) Willful misconduct.

186.096(2) (2) Exceptions. Except as provided in sub. (3), this section does not apply to any of the following:

186.096(2)(a) (a) A proceeding brought against a director or officer under s. 186.235 (8), (10) or (11) (b) 1.

186.096(2)(b) (b) A civil or criminal proceeding, other than a proceeding described in par. (a), brought by or on behalf of any governmental unit, authority or agency.

186.096(2)(c) (c) A proceeding brought by any person for a violation of state or federal law where the proceeding is brought pursuant to an express private right of action created by state or federal statute.

186.096(3) (3) Applicability to governments. Subsection (2) (b) and (c) does not apply to a proceeding brought by a governmental unit, authority or agency in its capacity as a private party or contractor.

186.096 History History: 1987 a. 13; 1995 a. 151.

186.096 Annotation Cooperative indemnification. La Rowe and Weine. WBB Sept. 1988.

186.098 186.098 Loans.

186.098(1) (1) Loan approval. The credit union may make loans to members upon terms approved by the credit committee, loan officer or board of directors.

186.098(2) (2) Appeals. A loan applicant may appeal in writing the decision of the credit committee or a loan officer to the president and may appeal in writing the president’s decision to the board of directors.

186.098(3) (3) Loan applications. Every application for a loan shall be documented and acknowledged by the member and shall state the security or collateral offered, if any.

186.098(4) (4) Board approval. The board of directors or its designee shall act on the applications of credit committee members and loan officers.

186.098(5) (5) Limits. No loans shall be made to any member in excess of 10 percent of the credit union’s assets, plus the balance of the member’s share account pledged as security for the loan. This subsection shall not apply to loans made to member credit unions by a corporate central credit union.

186.098(6) (6) Policies. The board of directors shall determine policy regarding all of the following:

186.098(6)(a) (a) Collateral acceptable for secured loans.

186.098(6)(b) (b) Loan limits.

186.098(6)(c) (c) Loan approval if a director, officer, credit committee member or employee provides security as a comaker, guarantor, endorser or other form of surety.

186.098(7) (7) Surety repayment evidence. An endorser, comaker, guarantor or other surety shall provide the credit union with evidence of ability to repay the obligation of the member.

186.098(8) (8) Credit extensions.

186.098(8)(a) (a) The credit committee or a loan officer may approve, upon its own motion or upon application by a member, an extension of credit, and loans may be granted to the member within the limit of the extension of credit. The credit committee or loan officers shall review all extensions of credit in accordance with written policies adopted by the board of directors.

186.098(8)(b) (b) A credit union may utilize credit cards, including point-of-purchase credit, if the credit committee or loan officer, upon its or his or her own motion or upon application by a member, has predetermined the extent of credit extension.

186.098(9m) (9m) Participation loans. A credit union may participate with other lenders in a loan of any type that the credit union may otherwise make.

186.098(10) (10) Loans to members secured by mortgages. Loans to members secured by mortgages on real estate may be made subject to the rules prescribed by the office of credit unions. Such loans may provide for additional advances, but any additional advance made to a member, if the mortgage and mortgage note so provide, may not exceed an amount specified in the mortgage.

186.098(11) (11) Guaranteed loans. A credit union may make loans to members that are guaranteed or insured by the federal government, any state or any federal or state agency. Loans under this subsection may be made under the conditions required for the insurance or guarantee.

186.098(12) (12) Loans to members. A credit union may make loans to members secured by assignment or transfer of stock certificates or other evidence of the borrower’s ownership interest in a corporation formed for the cooperative ownership of real estate. Sections 846.10 and 846.101, as they apply to a foreclosure of a mortgage involving a one-family residence, apply to a proceeding to enforce the lender’s rights in security given for a loan under this subsection. The office of credit unions shall promulgate joint rules with the division of banking that establish procedures for enforcing a lender’s rights in security given for a loan under this subsection.

186.098(13) (13) Liens.

186.098(13)(a) (a) Subject to any limitation on security interests identified in s. 422.417 (3) and if the loan agreement or endorsement permits it, a credit union shall have a lien on the share deposits and deposit accounts and accumulated dividends of a member for any amount owed the credit union by the member and for any loan endorsed by the member. Upon the default of the owner of the account in an obligation owed to the credit union, the credit union shall have a right of immediate setoff for each share deposit and deposit account unless prohibited under 12 CFR 226.12 (d). If the loan is a consumer credit transaction as defined in s. 421.301 (10), ss. 425.104 and 425.105 apply to a default under this paragraph. The credit union may also refuse to allow withdrawals from any share deposit or deposit account in an amount not to exceed any delinquent obligation to the credit union.

186.098(13)(b) (b) The credit union may waive its rights to a lien, to immediate setoff or to restrict withdrawals or to any combination of these rights for any share deposit or deposit account.

186.098 History History: 1971 c. 193 ss. 20, 42 (1); 1971 c. 239, 307; 1973 c. 255; 1975 c. 345; 1979 c. 282; 1981 c. 156; 1983 a. 368, 369, 538; 1987 a. 13 s. 26f; Stats. 1987 s. 186.098; 1989 a. 103; 1993 a. 482; 1995 a. 27; 1995 a. 151 ss. 94 to 112, 301; 1997 a. 35, 152; 1999 a. 9, 83; 2003 a. 33; 2013 a. 277.

186.098 Cross-reference Cross-reference: See s. 138.053 for interest adjustment clauses and s. 138.055 for variable rate contracts.

186.098 Cross-reference Cross-reference: See also chs. DFI-CU 54 and 69, Wis. adm. code.

186.10 186.10 Minors’ rights; shares in trust.

186.10(1) (1) Minors’ shares. Shares may be issued in the name of a minor, and may be withdrawn by such minor or by the minor’s agent under subch. I of ch. 705. Minors’ eligibility to vote at the meetings of the members is at the discretion of the board of directors.

186.10(2) (2) Shares in trust. Shares may be issued in trust, subject to any conditions prescribed in the bylaws. Share accounts and deposit accounts may be held by a member in trust for a beneficiary, held by a nonmember in trust for a beneficiary who is a member or held by a nonmember custodian for a member under ss. 54.854 to 54.898.

186.10 History History: 1971 c. 193; 1973 c. 291; 1983 a. 369; 1989 a. 331; 1991 a. 32; 1995 a. 151; 1997 a. 152; 2005 a. 387.

186.11 186.11 Investments.

186.11(1) (1) General. The board of directors may invest credit union funds in any of the following:

186.11(1)(a) (a) United States government direct and agency obligations.

186.11(1)(b) (b) Municipal bonds.

186.11(1)(c) (c) A corporate central credit union organized under s. 186.32 or under any other state or federal law.

186.11(1)(d) (d) Deposits and debt instruments of federally insured banks, credit unions, savings banks and savings and loan associations.

186.11(1)(e) (e) With the approval of the office of credit unions, other investment instruments.

186.11(2) (2) Credit union property.

186.11(2)(a) (a) Subject to pars. (b) and (c), a credit union may purchase, hold, and dispose of property as necessary for or incidental to its operations.

186.11(2)(b) (b) Subject to guidance issued by the office of credit unions, a credit union may purchase, lease, hold, and convey the following types of real estate:

186.11(2)(b)1. 1. Real estate conveyed to the credit union in satisfaction of debts previously contracted in the course of the credit union’s business.

186.11(2)(b)2. 2. Real estate purchased at sale on judgments, decrees, or mortgage foreclosures under securities held by the credit union, but a credit union may not bid at a sale a larger amount than is necessary to satisfy its debts and costs.

186.11(2)(b)3. 3. Subject to the approval of the office of credit unions, real estate acquired or held by the credit union for any other purpose.

186.11(2)(c) (c) Real estate acquired under par. (b) may not be held for more than 5 years, unless an extension is granted by the office of credit unions.

186.11(3) (3) Cooperative housing. A credit union may invest an amount not to exceed 10 percent of its regular reserve in agreements with other corporations or its members to provide cooperative housing and related facilities for its members.

186.11(4) (4) Investments in credit union service organizations.

186.11(4)(a) (a) Unless the office of credit unions approves a higher percentage, a credit union may invest not more than 1.5 percent of its total assets in the capital shares or obligations of credit union service organizations that, in the opinion of the office of credit unions, are sufficiently bonded and insured and that satisfy all of the following:

186.11(4)(a)1. 1. Are corporations, limited partnerships, limited liability companies, or other entities that are permitted under the laws of this state and that are approved by the office of credit unions.

186.11(4)(a)2. 2. Are organized primarily to provide goods and services to credit unions, credit union organizations and credit union members.

186.11(4)(b) (b) A credit union service organization under par. (a) may provide any of the following services related to the routine daily operations of credit unions:

186.11(4)(b)1. 1. Checking and currency services, check cashing services, money order services, savings bond services, traveler’s check services, and services regarding the purchase and sale of U.S. mint commemorative coins.

186.11(4)(b)2. 2. Clerical, professional, and management services, including, but not limited to, accounting, courier, credit analysis, facsimile transmission and copying, internal credit union audit, locator, management and personnel training and support, marketing, research, and supervisory committee audit services.

186.11(4)(b)3. 3. Consumer mortgage loan origination services.

186.11(4)(b)4. 4. Electronic transaction services, including, but not limited to, remote terminal, credit and debit card, data processing, electronic fund transfer, electronic income tax filing, payment item processing, wire transfer, and Internet financial services.

186.11(4)(b)5. 5. Tax preparation services, services regarding the development and administration of individual retirement accounts, Keogh plans, deferred compensation plans, and other personnel benefit plans, and financial counseling services, including, but not limited to, estate planning.

186.11(4)(b)6. 6. Fixed asset services, including, but not limited to, the management, development, sale, or lease of fixed assets and the sale, lease, or servicing of computer hardware or software.

186.11(4)(b)7. 7. Insurance brokerage or agency services, including, but not limited to, providing vehicle warranty programs, providing group insurance purchasing programs, and acting as an agent for the sale of insurance.

186.11(4)(b)8. 8. Services with regard to the leasing of real property owned by the credit union service organization or personal property.

186.11(4)(b)9. 9. Loan support services, including, but not limited to, debt collection and loan processing, servicing, and sales services and services regarding the sale of repossessed collateral.

186.11(4)(b)10. 10. Record retention, security, and disaster recovery services, including, but not limited to, alarm monitoring, data storage and retrieval, and record storage services and providing forms and supplies.

186.11(4)(b)11. 11. Securities brokerage services.

186.11(4)(b)12. 12. Shared credit union branch operations.