Chapter 186

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.

186.11(4)(b)13. 13. Student loan origination services.

186.11(4)(b)14. 14. Travel agency services.

186.11(4)(b)15. 15. Trust and other fiduciary services, including, but not limited to, acting as an administrator for prepaid legal services plans or acting as a trustee, guardian, conservator, estate administrator, or in any other fiduciary capacity.

186.11(4)(b)16. 16. Real estate brokerage services.

186.11(4)(bd) (bd) The office of credit unions may expand the list of services under par. (b) that are related to the routine daily operations of credit unions. Any service approved under this paragraph shall be authorized for all credit union service organizations under par. (a). A credit union may file a written request with the office of credit unions to exercise its authority under this paragraph and may include, along with the request, a description of any proposed service and an explanation of how that service is related to the routine daily operations of credit unions. Within 60 days after receiving a request under this paragraph, the office of credit unions shall approve or disapprove the request.

186.11(4)(bh) (bh) A credit union service organization under par. (a) may provide any service described under par. (b) or approved under par. (bd) through an investment by the credit union service organization in a 3rd-party service provider. The amount that a credit union service organization may invest in a 3rd-party service provider under this paragraph may not exceed the amount necessary to obtain the applicable services, or a greater amount if necessary for the credit union service organization to obtain the services at a reduced cost.

186.11(4)(c) (c) A credit union service organization may be subject to audit by the office of credit unions.

186.11 History History: 1971 c. 193; 1979 c. 77; 1983 a. 369; 1991 a. 221; 1993 a. 112; 1995 a. 27; 1995 a. 151 ss. 115 to 121, 307; 1997 a. 35; 2003 a. 63; 2005 a. 253; 2015 a. 304; 2023 a. 128.

186.11 Cross-reference Cross-reference: See also chs. DFI-CU 59 and 68, Wis. adm. code.

186.11 Annotation A credit union may invest in a credit union service corporation that sells insurance to the general public so long as the corporation was organized to primarily serve credit unions and their members. 78 Atty. Gen. 96.

186.112 186.112 Credit union borrowing. The board of directors may borrow money from any source if the amount borrowed does not exceed 30 percent of the credit union’s total savings, deposits and reserves. Credit union borrowing may exceed 30 percent if the office of credit unions approves.

186.112 History History: 1971 c. 193 ss. 23, 42 (1); 1979 c. 34, 282; 1981 c. 156; 1983 a. 369; 1995 a. 27, 151.

186.113 186.113 Credit union powers. A credit union may:

186.113(1) (1) Branch offices. With the approval of the office of credit unions, establish branch offices inside or outside of this state. Permanent records may be maintained at branch offices established under this subsection. In this subsection, the term “branch office” does not include a remote terminal, a limited services office, or a service center.

186.113(1s) (1s) Service centers. Upon notice to the office of credit unions, establish and maintain service centers that are reasonably necessary to furnish services to members. A credit union may operate a shared service center with one or more credit unions and may participate in a shared service center network that is operated from inside or outside of this state. This subsection does not prohibit a credit union from referring to a service center as a branch office. A service center shall be under the supervision of the office of credit unions.

186.113(2) (2) Credit union center corporation. With other credit unions, organize a credit union center corporation that provides facilities, equipment and personnel. A credit union center corporation shall be under the supervision of the office of credit unions.

186.113(3) (3) Financial counseling. Provide nonprofit financial counseling.

186.113(4) (4) Fees. Charge for perfection of security interests and investigations of borrowers.

186.113(5) (5) Third-party checks. Issue 3rd-party checks from an account of a member upon request of the member.

186.113(6) (6) Trust services.

186.113(6)(a) (a) Contract with a trust organization authorized to do business in this state to provide trust services to the credit union’s members.

186.113(6)(b) (b) Act as trustees or custodians of member tax deferred retirement funds, individual retirement accounts, medical savings accounts, or other employee benefit accounts or funds permitted by federal law to be deposited in a credit union.

186.113(6)(c) (c) Act as a depository for member qualified and nonqualified deferred compensation funds as permitted by federal law.

186.113(7) (7) Acquiring interests in credit sales transactions. Purchase or acquire interests in credit sales transactions involving credit union members.

186.113 Cross-reference Cross-reference: See also ch. DFI-CU 61, Wis. adm. code.

186.113(8) (8) Donations. Make donations and grants if the board of directors approves any such donation or grant and the approval is based on a determination that the donation or grant is in the best interest of the credit union and is reasonable given the size and financial condition of the credit union.

186.113(9) (9) Financial services. Collect, receive and disburse moneys in connection with the sale or provision of share drafts, travelers checks, money orders, credit cards, debit cards or, with the approval of the office of credit unions, similar instruments.

186.113(10) (10) Additional powers. Exercise all powers necessary and proper to carry out the purposes of the credit union.