December 8, 2023 - Introduced by Senators Stafsholt, Cabral-Guevara, Felzkowski, Marklein and Taylor, cosponsored by Representatives Katsma, Murphy, O’Connor, Allen, Behnke, Dittrich, Goeben, Gundrum, Novak, Penterman and Rettinger. Referred to Committee on Financial Institutions and Sporting Heritage.

SB773,,2 An Act to repeal 138.052 (7e) and (7m), 138.056 (6) and 215.21 (2); to renumber and amend 186.11 (2); to amend 34.08 (2), 38.20 (2) (e), 67.12 (12) (a), 138.052 (12) (a), 186.07 (7), 186.113 (15) (a), 186.118 (3) (a) (intro.), 186.235 (14) (c), 214.04 (21) (b), 215.13 (39), 215.13 (46) (a) 1., 215.21 (15), 221.0303 (2), 941.38 (1) (b) 21., 946.82 (4) and 969.08 (10) (b); and to create 186.11 (2) (b) and (c), 186.113 (26), 227.01 (13) (yu) and 943.825 of the statutes; relating to: authorized activities and operations of credit unions; the lending area of savings and loan associations; automated teller machines; residential mortgage loans and variable rate loans; payments for public deposit losses in failed financial institutions; promissory notes of certain public bodies; repealing rules promulgated by the Department of Financial Institutions; providing an exemption from rule-making procedures; and providing a penalty.

SB773,,3 Analysis by the Legislative Reference Bureau

Under current law, the Office of Credit Unions (OCU) in the Department of Financial Institutions (DFI) regulates state-chartered credit unions, and DFI’s Division of Banking (division) regulates state-chartered banks, savings banks, and savings and loan (S&L) associations. Current law specifies various authorized activities and powers of these financial institutions.

This bill does the following with respect to the authorized operations of financial institutions:

1. Expands the ability of a credit union to purchase, lease, and sell real property, subject to limitations.

2. Specifies that credit unions may issue or offer supplemental forms of capital approved by OCU.

3. Repeals certain DFI rules related to the placement or operation of automated teller machines (ATMs) by financial institutions.

4. Creates the crime of interfering with an ATM.

5. Eliminates a geographical lending restriction for an S&L association.

6. Eliminates certain lender disclosure requirements applicable to residential mortgage loans and variable rate loans.

7. Extends the maximum maturity date, from 10 to 20 years, of a promissory note issued by a municipality, county, or school district.

8. Extends the period in which a credit union’s board of directors must appoint a director to fill a board vacancy.

9. Increases the amount of compensation available from DFI for losses resulting from the deposit of public moneys in a failed financial institution.

10. Extends the period during which OCU must determine whether an activity or power that becomes authorized for a federally chartered credit union should also be authorized for a Wisconsin-chartered credit union.

11. Extends the deadline for a credit union to pay OCU for the cost of an OCU examination.

Credit union property

Under current law, a credit union may purchase, hold, and dispose of property as necessary for or incidental to its operations.

The 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 OCU and a five-year limit on holding the real estate.

Supplemental capital

The bill specifies that credit unions may issue or offer supplemental forms of capital in the form and with the conditions, including those related to the safety and soundness of the proposed use of the capital and the overall condition of the credit union, approved by OCU.

Off-site ATMs

Under current law, a bank, savings bank, S&L 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 the division, a financial institution other than a credit union must provide advance written notice to the division before acquiring, placing, or operating an off-site ATM. The 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. The bill repeals these provisions.

Interference with automated teller machines

The bill also creates a Class H felony for intentionally causing impairment or interruption of use of a financial institution’s ATM or customer bank communications terminal. A Class H felony is punishable by a fine not exceeding $10,000 or imprisonment not exceeding six years, or both.