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.
Savings and loan association lending areas
Current law specifies the authority of an S&L association to make mortgage loans but also limits the lending area of an S&L association to a radius of 100 miles of the S&L association’s home office. In general, an S&L association may establish branch offices within the lending area of its home office.
The bill eliminates the lending-area restriction on an S&L association and, consequently, the limitation that a branch office must be located within the lending area.
Residential mortgage loans and variable rate loans
Under current law, a residential mortgage loan generally is a loan secured by a first lien real estate mortgage on a one-family to four-family dwelling that the borrower uses as his or her principal residence. Current law imposes various requirements related to residential mortgage loans, including the following:
1. Before a lender accepts an application or fee in connection with a residential mortgage loan, the lender must deliver to the potential loan applicant a written disclosure that contains certain information, including whether an application fee is refundable and whether the interest rate and other terms of the agreement may change before the closing date.
2. The lender must provide a written statement to an applicant of the reasons for adverse action on an application. Delivery of a notice of adverse action in compliance with federal law satisfies this requirement.
3. The lender must provide written notice to the borrower if the loan servicing for the residential mortgage loan is sold. The notice must include the name, address, and telephone number of the new loan servicer.
The bill repeals the requirements identified as 1. to 3. immediately above.
Under current law, a variable rate loan generally is a residential mortgage loan the terms of which permit the interest rate to be increased or decreased. Current law imposes various requirements related to variable rate loans, including a disclosure requirement. Before making a variable rate loan, the lender must disclose specified information to at least one of the borrowers, including that the loan contract contains a variable interest rate provision; identification of the index used and its current base; and rights of the borrower with respect to a change in the interest rate.
The bill repeals these disclosure requirements.