Chapter 186

186.235(16m) (16m) Financial privacy examination. The office of credit unions shall examine a credit union to determine the credit union’s compliance with s. 186.20.

186.235(17) (17) Refusal to submit to examination. The office of credit unions shall report to the department of justice any credit union that refuses to submit to an examination. The department of justice shall institute proceedings to revoke the charter of the credit union.

186.235(18) (18) Record-keeping and accounting procedure.

186.235(18)(a) (a) A credit union shall keep records and accounts in a manner consistent with generally accepted accounting principles or with standards prescribed by the office of credit unions. If a credit union does not keep its records and accounts in a manner consistent with generally accepted accounting principles, the office of credit unions may require the credit union to keep records and accounts under standards prescribed by the office.

186.235(18)(b) (b) The office of credit unions may require a credit union that fails to open records or maintain prescribed records or accounts to forfeit not more than $100 for each day it is in violation. If the credit union fails to pay the forfeiture, the office of credit unions may institute proceedings to recover the forfeiture.

186.235(19) (19) Supervision; reports. All credit unions formed under this or other similar law, or authorized to transact in this state a business similar to that authorized to be done by this chapter, shall be under the control and supervision of the office of credit unions. Every such corporation shall make a full and detailed report of its business as of December 31 for that year, and of its condition on such date, in such form and containing such information as the office of credit unions may prescribe, and shall file with the office of credit unions a true and verified copy thereof on or before February 1 thereafter. Accompanying the same shall be attached a copy of the statement of the credit union at the close of its last fiscal year. If any such credit union fails or refuses to furnish the report herein required, it shall be subject, at the discretion of the office of credit unions, to a forfeiture of $1 to $10 per day for each day of default, and the office of credit unions may maintain an action in the name of the state to recover such penalty, and the same shall be paid into the state treasury.

186.235(20) (20) Approval of acts. Whenever any credit union requests approval of the office of credit unions for any act, which by statute requires approval, the office of credit unions shall have 90 days in which to grant, deny or defer the approval. A deferral may be for not more than 60 days. If the office of credit unions fails to act, approval shall be considered to have been granted. In matters which require the holding of public hearings, the 90-day period shall not commence until the conclusion of the hearing and the date set by the office of credit unions for receipt of briefs.

186.235(21) (21) Parity. Unless the office of credit unions is expressly restricted by statute from acting under this subsection with respect to a specific power, right or privilege, the office of credit unions by rule may, with the approval of the credit union review board, 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 a federal law, regulation or interpretation. Notice, disclosure and procedures prescribed by statute which may be modified by a rule adopted under this subsection include, but are not limited to, those provided under s. 138.056. A rule adopted under this subsection may not affect s. 138.041 or chs. 421 to 428 or restrict powers granted credit unions under this chapter.

186.235 Cross-reference Cross-reference: See also ch. DFI-CU 74, Wis. adm. code.

186.235 History History: 1995 a. 151 ss. 12 to 14, 16, 65, 191 to 231, 233, 235, 237 to 264, 292; 1995 a. 225 s. 429; 1995 a. 325 ss. 1, 2; 1995 a. 417; 1997 a. 35, 152; 2003 a. 63; 2011 a. 32; 2013 a. 20; 2015 a. 304; 2017 a. 340; 2023 a. 128.

186.235 Cross-reference Cross-reference: See also s. DFI-CU 60.06, Wis. adm. code.

186.31 186.31 Mergers.

186.31(1) (1) Transfer of assets and liabilities. Any credit union, which is in good faith winding up its business for the purpose of merging with another credit union, may transfer its assets and liabilities to the credit union with which it is in the process of merging; but no merger may be made without the consent of the office of credit unions, and not then to defeat or defraud any of its creditors in the collection of debts against such credit union. 

186.31(2) (2) Approval. To effect a merger, the board of directors of each credit union shall, by resolution, propose a specific plan for merger which shall be agreed to by a majority of the board of each credit union joining in the merger. The proposed merger plan shall be submitted to a vote at an annual or special meeting of members of the merging credit union. Written notice of the meeting setting forth the proposed plan of merger or a summary shall be given to each member of the merging credit union within the time and in the manner provided for the giving of notice of meetings of members of the credit union. The proposed plan shall be adopted upon receiving a majority of the votes entitled to be cast by members present at the meeting.

186.31(2m) (2m) Emergency merger. Notwithstanding sub. (2), if the office of credit unions determines that the merging credit union is in danger of insolvency, and that the proposed merger would reduce or avoid a threatened loss to federal share insurance, the office of credit unions may permit the merger to become effective without an affirmative vote of the membership of the merging credit union.

186.31(3) (3) Rights transferred. The credit union merging with another credit union shall not be required to go into liquidation but its assets and liabilities shall be reported by the credit union with which it has merged, and all the rights, franchises and interests of the merging credit union to any property belonging to the credit union shall be considered to be transferred, and the resulting credit union shall hold and enjoy the same and all rights of property, franchises and interest in the same manner and to the same extent as was held and enjoyed by the merging credit union. The members or shareholders of the merging credit union shall without any further act on their part be members and shareholders of the resulting credit union and be subject to all rights, privileges and duties as provided for in the bylaws of the resulting credit union.

186.31 History History: 1971 c. 193; 1977 c. 152; 1985 a. 29; 1995 a. 27, 151.

186.314 186.314 Conversion.

186.314(1m) (1m) To federal credit union. A credit union may convert to a federal credit union by complying with the following:

186.314(1m)(a) (a) The proposition for a conversion shall first be approved by unanimous recommendation of the directors of the credit union. The directors shall set a date for a vote by the members on the conversion. Written notice specifying the reason for conversion and the date set for the vote shall be delivered in person or mailed to each member at the address appearing on the records of the credit union, not more than 45 days nor less than 15 days before the meeting. A majority of the members voting, in person or in writing, may approve the proposition for conversion, provided not more than 15 members or 10 percent of the total membership, whichever is greater, object by written notice.

186.314(1m)(b) (b) A statement of the results of the vote, verified by the affidavits of the chairperson or the vice chairperson and the secretary, shall be filed with the office of credit unions within 10 days after the vote is taken.

186.314(1m)(c) (c) Within 90 days after the date on which the proposition for conversion is approved, the credit union shall take the necessary action under 12 USC 1771 (b) to make it a federal credit union. Within 10 days after receipt of the federal credit union charter, the credit union shall file a copy of the charter with the office of credit unions. Upon filing, the credit union shall cease to be a state credit union.

186.314(1m)(d) (d) Upon ceasing to be a state credit union, the credit union shall no longer be subject to this chapter. The successor federal credit union shall be vested with all the assets and shall continue to be responsible for all of the obligations of the state credit union to the same extent as though the conversion had not taken place.

186.314(2m) (2m) To savings bank or state bank.

186.314(2m)(a) (a) In this subsection:

186.314(2m)(a)1. 1. “Savings bank” has the meaning given in s. 214.01 (1) (t) and includes a mutual savings bank and a stock savings bank as well as a savings bank that is a subsidiary of, or is otherwise controlled by, a savings bank holding company.

186.314(2m)(a)2. 2. “Savings bank holding company” has the meaning given in s. 214.01 (1) (tm).

186.314(2m)(a)3. 3. “State bank” means a bank organized under ch. 221.

186.314(2m)(b) (b) A credit union may convert to a savings bank or state bank by complying with pars. (c) to (e).

186.314(2m)(c) (c) The proposition for a conversion shall first be approved by a majority recommendation of the directors of the credit union. After the board of directors approves the conversion proposal, the directors shall, by a majority vote of the directors, set a date for a meeting of credit union members to vote on the conversion. Credit union members may also vote by written ballot to be filed on or before the meeting date. Written notice stating the credit union’s intent to convert to a savings bank or state bank shall be sent to each member at the member’s address appearing on the records of the credit union. This notice shall be sent to each credit union member 3 times, once not more than 95 calendar days nor less than 90 calendar days before the date of the meeting to vote on the conversion, once not more than 65 calendar days nor less than 60 calendar days before the date of the meeting to vote on the conversion, and once not more than 35 calendar days nor less than 30 calendar days before the date of the meeting to vote on the conversion. A ballot may be included in the same envelope as the 3rd notice. Each notice shall adequately describe the purpose and subject matter of the vote to be taken at the meeting set by the board of directors or by submission of a written ballot. Each notice shall clearly inform members that they may vote at the meeting or by submitting the written ballot. Each notice shall state the date, time, and place of the meeting. If a written ballot is included with the 3rd notice, the 1st and 2nd notices shall state in a clear and conspicuous manner that a written ballot will be mailed together with another notice between 30 and 35 days before the date of the membership vote on conversion. If a written ballot is included in the same envelope with the 3rd notice, the 3rd notice shall so state in a clear and conspicuous manner. Approval of the proposition for conversion shall be by affirmative vote, in person or in writing, of a majority of the credit union members voting at the meeting or by written ballot.

186.314(2m)(d) (d) A credit union that proposes to convert to a savings bank or state bank under this subsection shall file with the office of credit unions a notice of its intent to convert and, within 10 days after the member vote on the conversion under par. (c), a statement of the results of the member vote. If the credit union members vote to approve the proposition for conversion, the member vote shall be verified by the office of credit unions.

186.314(2m)(e) (e) Upon approval by the credit union members of the proposition for conversion under par. (c), the credit union shall take all necessary action under ch. 214 or 221 to complete the conversion to a savings bank or state bank. Within 90 days after receipt from the division of banking of a certificate of incorporation as a savings bank or state bank, the credit union shall file a copy of the certificate with the office of credit unions and the office of credit unions shall issue to a converting credit union a certificate of conversion to a savings bank or state bank.

186.314(2m)(f) (f) Upon conversion, the credit union shall cease to be a credit union, shall be a savings bank or state bank, shall no longer be subject to this chapter, and shall be subject to ch. 214 or 221 and all other provisions of law governing savings banks or state banks. Upon conversion, the legal existence of the savings bank or state bank shall be a continuation of the credit union, and all property and every right, privilege, interest, and asset of the credit union immediately, without any conveyance, transfer, or further act of the savings bank or state bank, vests in the savings bank or state bank. The resulting savings bank or state bank shall succeed to and be vested with all the rights, assets, obligations, and relations of the credit union, and all actions and other judicial proceedings to which the credit union is a party may be prosecuted and defended, to the same extent as though the conversion had not taken place.

186.314(2m)(g) (g) Upon conversion of a credit union into a stock savings bank or state bank, the stock savings bank or state bank may distribute shares of the capital stock of the stock savings bank or state bank, or may distribute cash, or both, to the former members of the converted credit union in recognition of their ownership of the equity of the converted credit union.

186.314(2m)(h) (h)

186.314(2m)(h)1. 1. In this paragraph, “senior management official” means a chief executive officer, an assistant chief executive officer, a chief financial officer, and any other senior executive officer as defined by the appropriate federal banking agency as directed under 12 USC 1831i (f).

186.314(2m)(h)2. 2. No director or senior management official of a credit union may receive any economic benefit in connection with a conversion of the credit union to a savings bank or state bank except that a director or senior management official may receive director fees as well as compensation and other benefits paid to directors and senior management officials of the converted savings bank or state bank in the ordinary course of business.

186.314 History History: 1971 c. 193; 1985 a. 29; 1995 a. 27, 151; 2005 a. 134; 2011 a. 32.

186.315 186.315 Charter cancellation. Upon completion of a voluntary liquidation as provided in s. 186.18, or upon completion of the liquidation in cases under s. 186.235 (11), or after the assets and liabilities of a credit union are transferred to another credit union for the purpose of merger as provided in s. 186.31 (3), the office of credit unions shall cancel the charter of the credit union liquidated or merged without any other or further notice to the credit union or to any person. A certified copy of the order or certificate of the office of credit unions shall be recorded with the register of deeds of the county in which the credit union is located. The register of deeds shall note on the margin of the record of the articles of incorporation of the credit union the document number and, if the order or certificate is assigned a volume and page number, the volume and page where the order or certificate canceling the credit union’s charter is recorded. In case of voluntary liquidation under s. 186.18 or merger under s. 186.31, the credit union shall record the order or certificate of the office of credit unions and pay the fee. In case of liquidation under s. 186.235 (11), the office of credit unions or special deputy shall record the order or certificate of the office of credit unions and pay the fee out of the assets of the credit union as an expense of liquidation.

186.315 History History: 1971 c. 193 s. 42 (1); 1995 a. 27, 151; 2017 a. 102.

186.32 186.32 Corporate central credit union.

186.32(1) (1) Organization. A corporate central credit union may be organized and operated under the conditions and provisions of this chapter and subject to all of the provisions of this chapter not inconsistent with this section. It shall be lawful for other credit unions located in this state and any other state to become members of a corporate central credit union. Credit unions having membership in a corporate central credit union may be represented at an annual or special meeting of the corporate central credit union by one member authorized by the board of directors of that member credit union and shall be entitled to one vote. The representative may be eligible for office in the corporate central credit union the same as if the representative were a member of the corporate central credit union.

186.32(2) (2) Dividends. A corporate central credit union may pay to the accounts of member credit unions dividends on a basis other than that required by this subsection for other members of a corporate central credit union. Dividends paid under this subsection shall be considered a normal operating expense of the corporate central credit union’s operation. Rates of such dividends and terms of payment may be established and guaranteed in advance by action of the corporate central credit union’s board of directors.

186.32 History History: 1971 c. 193; 1979 c. 282; 1981 c. 5; 1993 a. 482; 1995 a. 151.

186.325 186.325 National corporate central credit union.

186.325(1) (1) Criteria. A corporate central credit union is a national corporate central credit union if all of the following conditions are met:

186.325(1)(a) (a) Its membership consists of any of the following:

186.325(1)(a)1. 1. Central or corporate central credit unions that are organized under the laws of this state or another state or under federal law.

186.325(1)(a)2. 2. Officers and directors of the qualifying corporate central credit union.

186.325(1)(a)3. 3. Organizations operated primarily to service and otherwise assist credit union operations.

186.325(1)(b) (b) Its membership does not include any of the following:

186.325(1)(b)1. 1. Credit unions other than those under par. (a) 1.

186.325(1)(b)2. 2. Individuals other than those under par. (a) 2.

186.325(1)(c) (c) At least 75 percent of its savings and deposits are derived from members under par. (a) 1. and the remainder of its savings and deposits are derived from members under par. (a) 2. and 3.

186.325(2) (2) Borrowing limits. The borrowing limits under s. 186.112 do not apply to a national corporate central credit union.

186.325 History History: 1995 a. 151.

186.34 186.34 Federal share insurance.

186.34(1) (1) Insurance required. No credit union may accept any deposit from any person other than an incorporator before the credit union has received a certificate of share insurance issued by the national board.

186.34(4) (4) Certificate filing. Every credit union that receives a certificate of insurance from the national board shall file a copy of the certificate with the office of credit unions within 30 days after the credit union receives the certificate.

186.34(5) (5) Insurance to be maintained. Notwithstanding any other provision of this chapter, every credit union, other than a corporate central credit union, shall take, and a corporate central credit union may take, every action lawfully required to maintain federal share insurance coverage in full force and effect, and shall refrain or desist from taking any action that is likely to cause termination of federal share insurance coverage.

186.34 History History: 1985 a. 29; 1987 a. 27; 1995 a. 27; 1995 a. 151 ss. 278 to 282, 304.

186.36 186.36 Sale of insurance in credit unions. Any officer or employee 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 insurance to the credit union.

186.36 History History: 1973 c. 243; 1993 a. 482; 1995 a. 151; 2003 a. 63.

186.41 186.41 Interstate acquisitions and mergers of credit unions.

186.41(1) (1) Definitions. In this section:

186.41(1)(am) (am) “Out-of-state credit union” means a state or federal credit union, the principal office of which is located in a state other than this state.

186.41(1)(bm) (bm) “Wisconsin credit union” means a credit union having its principal office located in this state.

186.41(2) (2) Wisconsin credit union.

186.41(2)(a) (a) A Wisconsin credit union may do any of the following:

186.41(2)(a)1. 1. Acquire an interest in, or some or all of the assets and liabilities of, one or more out-of-state credit unions.

186.41(2)(a)2. 2. Merge with one or more out-of-state credit unions.

186.41(2)(b) (b) A Wisconsin credit union proposing any action under par. (a) shall provide the office of credit unions a copy of any original application seeking approval by a federal agency or by an agency of another state and of any supplemental material or amendments filed in connection with any application.

186.41(3) (3) Out-of-state credit unions. Except as provided in sub. (4), an out-of-state credit union may do any of the following:

186.41(3)(a) (a) Acquire an interest in, or some or all of the assets of, one or more Wisconsin credit unions.

186.41(3)(b) (b) Merge with one or more Wisconsin credit unions.

186.41(4) (4) Limitations. An out-of-state credit union may not take any action under sub. (3) until all of the following conditions have been met:

186.41(4)(a) (a) The office of credit unions finds that the statutes of the state in which the out-of-state credit union has its principal office permit Wisconsin credit unions to both acquire out-of-state credit union assets and merge with one or more out-of-state credit unions in that state.

186.41(4)(b) (b) The office of credit unions has not disapproved the acquisition of Wisconsin credit union assets or the merger with the Wisconsin credit union under sub. (5).

186.41(4)(c) (c) The office of credit unions gives a class 3 notice, under ch. 985, in the official state newspaper, of the application to take an action under sub. (3) and of the opportunity for a hearing and, if at least 25 residents of this state petition for a hearing within 30 days of the final notice or if the office of credit unions on its own motion calls for a hearing within 30 days of the final notice, the office of credit unions holds a public hearing on the application, except that a hearing is not required if the office of credit unions finds that an emergency exists and that the proposed action under sub. (3) is necessary and appropriate to prevent the probable failure of a Wisconsin credit union that is closed or in danger of closing.

186.41(4)(d) (d) The office of credit unions is provided a copy of any original application seeking approval by a federal agency of the acquisition of Wisconsin credit union assets or of the merger with a Wisconsin credit union and of any supplemental material or amendments filed with the application.

186.41(4)(e) (e) The applicant has paid the office of credit unions a fee of $1,000 together with the actual costs incurred by the office in holding any hearing on the application.

186.41(4)(f) (f) With regard to an acquisition of assets of a Wisconsin credit union that is chartered on or after May 9, 1986, the Wisconsin credit union has been in existence for at least 5 years before the date of acquisition.

186.41(5) (5) Standards for disapproval. The office of credit unions may disapprove of any action under sub. (3) if the office finds any of the following:

186.41(5)(a) (a) Considering the financial and managerial resources and future prospects of the applicant and of the Wisconsin credit union concerned, the action would be contrary to the best interests of the members of the Wisconsin credit union.

186.41(5)(b) (b) The action would be detrimental to the safety and soundness of the applicant or of the Wisconsin credit union concerned, or to a subsidiary or affiliate of the applicant or of the Wisconsin credit union.

186.41(5)(c) (c) Because the applicant, its executive officers, or directors have not established a record of sound performance, efficient management, financial responsibility, and integrity, the action would be contrary to the best interests of the creditors, the members, the other customers of the applicant, the Wisconsin credit union, or the public.

186.41(5)(cg) (cg) The applicant has failed to provide adequate and appropriate services of the type contemplated by the community reinvestment act of 1977 to the communities in which the applicant is located.

186.41(5)(cr) (cr) The applicant has failed to propose to provide adequate and appropriate services of the type contemplated by the community reinvestment act of 1977 in the community in which the Wisconsin credit union which the applicant proposes to acquire or merge with is located.

186.41(5)(ct) (ct) The applicant has failed to enter into an agreement prepared by the office of credit unions to comply with laws and rules of this state regulating consumer credit finance charges and other charges and related disclosure requirements, except to the extent preempted by federal law or regulation.