NEWS: Effective July 1, 2021, the Wisconsin Office of Credit Unions has finalized a clean-up of obsolete and outdated state credit union rules. Many of the changes are minor, but some could affect operations for state-chartered credit unions.
Repealing rules that are redundant of (or less stringent than) state or federal laws
The OCU’s action repeals several state rules that are redundant or less stringent than state or federal laws.
- It repeals chapter DFI-CU 58 (“Sale of Credit Life and Health and Accident Insurance in Connection with Credit Union Loans”), which is redundant because it covers the same subject as Wis. Stat. § 186.36 (“Sale of insurance in credit unions”).
- It repeals chapters DFI-CU 57 (“Retention of Credit Union Books and Records”) and DFI-CU 73 (“Audits and Verifications”). Those rules set state standards for record retention and auditing requirements for state-chartered credit unions, but those standards are less stringent than parallel federal regulations on recordkeeping and audits. Credit unions must follow the more demanding federal standards to maintain federal share insurance, see NCUA rules § 741.215 and Part 715 (“Supervisory Committee Audits and Verifications”), Part 748 (“Security Program, Report of Suspected Crimes, Suspicious Transactions, Catastrophic Acts and Bank Secrecy Act Compliance”) and Part 749 (“Record Retention Guidelines”).
A credit union’s record retention program should also take into account operational needs, statutes of limitations, and the various compliance regulations that set record retention requirements.
Revising rules to reflect modern technology & business practices
The OCU’s action modifies several rules to reflect modern technology and business practices.
- It modifies Section DFI-CU 54.03, which sets a 30-year limit on the duration of mortgage loans, to add a provision allowing the OCU’s Director to waive those limitations for good cause shown. While 30-year mortgages remain the norm, the change will give the OCU flexibility to address situations in which loans with longer terms are warranted.
Credit unions considering longer-than-30-year mortgages should evaluate the impact of state laws that may limit the effectiveness of the mortgage.
- It repeals Section DFI-CU 63.03, which has required credit unions to give advance notice to the Office of Credit Unions before changing ATM locations. The OCU will no longer need advance notice of ATM placements.
- It revises Sections DFI-CU 56.03 and 56.05, Wis. Admin Code, to authorize the electronic delivery of filings in administrative actions before the Credit Union Review Board.
Amending or repealing rules that have become obsolete
The OCU’s action modifies or repeals three sets of rules that are no longer needed because of changes in state law.
- It repeals chapter DFI-CU 66, which authorizes out-of-state “limited service offices.” In an era when credit unions were restricted from opening out-of-state branch offices, the concept of limited service offices was important for credit unions contemplating business across state borders. But the legislature has since authorized credit unions to open out-of-state branch offices, in Wis. Stats. § 186.113(1), and thus the administrative rules governing limited service offices are no longer relevant.
- It modifies § DFI-CU 63.01 to remove a reference to the “division of savings and loan,” which no longer exists. Its former duties are now carried out by the Division of Banking within the Department of Financial Institutions.
- It modifies § DFI-CU 56.03, which provides a 30-day window to seek review of an adverse action by the Office of Credit Unions. The change eliminates an inconsistency with Wis. Stat. § 186.015(5), which provides a 60-day window.
The text of all Office of Credit Unions rules is available here. That page will be updated per the final rule on the July 1, 2021 effective date.