AB898: Bill Text

AB898,12,1 NOTICE OF RELATIONSHIP

AB898,12,7 This company, ..... (insert name and address of association, savings and loan holding company or subsidiary), is related to ..... (insert name and address of association, savings and loan holding company or subsidiary) of which you are also a customer. You may not be compelled to buy any product or service from either of the above companies or any other related company in order to participate in this transaction.

AB898,12,12 If you feel that you have been compelled to buy any product or service from either of the above companies or any other related company in order to participate in this transaction, you should contact the management of either of the above companies at either of the above addresses or the division of savings and loan institutions at .... (insert address).

AB898, s. 16 Section 16. 220.04 (9) (a) 2. of the statutes is amended to read:

AB898,12,16 220.04 (9) (a) 2. "Regulated entity" means a bank, universal bank, trust company bank and any other entity which is described in s. 220.02 (2) or 221.0526 as under the supervision and control of the division.

AB898, s. 17 Section 17. 221.0303 (2) of the statutes, as affected by 1997 Wisconsin Act 27, is amended to read:

AB898,13,10 221.0303 (2) Operation and acquisition of customer bank communications terminals. A bank may, directly or indirectly, acquire, place and operate, or participate in the acquisition, placement and operation of, at locations other than its main or branch offices, customer bank communications terminals, in accordance with rules established by the division. The rules of the division shall provide that any such customer bank communications terminal shall be available for use, on a nondiscriminatory basis, by any state or national bank and by all customers designated by a bank using the terminal. This subsection does not authorize a bank which has its principal place of business outside this state to conduct banking business in this state. The customer bank communications terminals also shall be available for use, on a nondiscriminatory basis, by any credit union, savings and loan association or savings bank, if the credit union, savings and loan association or savings bank requests to share its use, subject to rules jointly established by the division of banking, the office of credit unions and the division of savings and loan institutions. The division by order may authorize the installation and operation of a customer bank communications terminal in a mobile facility, after notice and hearing upon the proposed service stops of the mobile facility.

AB898, s. 18 Section 18. 221.0321 (5) of the statutes, as affected by 1997 Wisconsin Act 35, is amended to read:

AB898,13,21 221.0321 (5) Certain secured loans. A bank may make loans 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 division shall promulgate joint rules with the office of credit unions and the division of savings and loan institutions that establish procedures for enforcing a lender's rights in security given for a loan under this subsection.

AB898, s. 19 Section 19. Chapter 222 of the statutes is created to read:

AB898,13,24 CHAPTER 222 UNIVERSAL BANKS

AB898,14,2 Subchapter I General Provisions

AB898,14,4 222.0101 Title. This chapter may be cited as the "Wisconsin universal bank law".

AB898,14,5 222.0102 Definitions. In this chapter:

AB898,14,6 (1) "Adequately capitalized" has the meaning given in 12 USC 1831o (b) (1) (B).

AB898,14,9 (2) "Capital" of a universal bank means the sum of the following, less the amount of intangible assets that is not considered to be qualifying capital by a deposit insurance corporation or the division:

AB898,14,14 (a) For a universal bank organized as a stock organization, the universal bank's capital stock, preferred stock, undivided profits, surplus, outstanding notes and debentures approved by the division, other forms of capital designated as capital by the division and other forms of capital considered to be qualifying capital of the universal bank by a deposit insurance corporation.

AB898,14,19 (b) For a universal bank organized as a mutual organization, the universal bank's net worth, undivided profits, surplus, outstanding notes and debentures approved by the division, other forms of capital designated as capital by the division and other forms of capital considered to be qualifying capital by a deposit insurance corporation.

AB898,14,23 (3) "Deposit insurance corporation" means the Federal Deposit Insurance Corporation or other instrumentality of, or corporation chartered by, the United States that insures deposits of financial institutions and that is supported by the full faith and credit of the U.S. government as stated in a congressional resolution.

AB898,14,24 (4) "Division" means the division of banking.

AB898,15,3 (5) "Financial institution" means a state savings bank organized under ch. 214, state savings and loan association organized under ch. 215 or a state bank chartered under ch. 221.

AB898,15,5 (6) "Universal bank" means a financial institution that has been issued a certificate of authority under s. 222.0205.

AB898,15,6 (7) "Well-capitalized" has the meaning given in 12 USC 1831o (b) (1) (A).

AB898,15,11 222.0103 Applicability. (1) Savings banks. A universal bank that is a savings bank organized under ch. 214 remains subject to all of the requirements, duties and liabilities, and may exercise all of the powers, of a savings bank, except that in the event of a conflict between this chapter and those requirements, duties, liabilities or powers, this chapter shall control.

AB898,15,16 (2) Savings and loan associations. A universal bank that is a savings and loan association organized under ch. 215 remains subject to all of the requirements, duties and liabilities, and may exercise all of the powers, of a savings and loan association, except that, in the event of a conflict between this chapter and those requirements, duties, liabilities or powers, this chapter shall control.

AB898,15,20 (3) Banks. A universal bank that is a bank chartered under ch. 221 remains subject to all of the requirements, duties and liabilities, and may exercise all of the powers, of a bank, except that, in the event of a conflict between this chapter and these requirements, duties, liabilities or powers, this chapter shall control.

AB898,15,23 222.0105 Fees. The division may establish such fees as it determines are appropriate for documents filed with the division under this chapter and for services provided by the division under this chapter.

AB898,15,25 222.0107 Administration. (1) Powers of division. The division shall administer this chapter for all universal banks.

AB898,16,5 (2) Rule-making authority. The division may promulgate rules to administer and carry out this chapter. The division may establish additional limits or requirements on universal banks, if the division determines that the limits or requirements are necessary for the protection of depositors, members, investors or the public.

AB898,16,7 SUBCHAPTER II Certification

AB898,16,12 222.0201 Procedure. (1) Application. A financial institution may apply to become certified as a universal bank by filing a written application with the division. The application shall include such information as the division may require. The application shall be on such forms and in accordance with such procedures as the division may prescribe.

AB898,16,16 (2) Review by division. An application submitted to the division shall either be approved or disapproved by the division in writing within 60 days after its submission to the division. The division and the financial institution may mutually agree to extend the application period for an additional period of 60 days.

AB898,16,19 222.0203 Eligibility. (1) Requirements. The division shall approve an application for certification as a universal bank, if the applying financial institution meets all of the following requirements:

AB898,16,22 (a) The financial institution is chartered or organized, and regulated, under ch. 214, 215 or 221 and has been in existence and continuous operation for a minimum of 3 years prior to the date of the application.

AB898,16,23 (b) The financial institution is well-capitalized or adequately capitalized.

AB898,17,3 (c) The financial institution does not exhibit a combination of financial, managerial, operational and compliance weaknesses that is moderately severe or unsatisfactory, as determined by the division based upon the division's assessment of the financial institution's capital adequacy, asset quality, management capability, earnings quantity and quality, adequacy of liquidity, and sensitivity to market risk.

AB898,17,7 (d) During the 12-month period prior to the application, the financial institution has not been the subject of an enforcement action and there is no enforcement action pending against the financial institution by any state or federal financial institution regulatory agency, including the division.

AB898,17,10 (2) Failure to maintain compliance. For any period during which a universal bank fails to meet the conditions under sub. (1), the division may by order limit or restrict the exercise of the powers of the universal bank under this chapter.

AB898,17,14 222.0205 Certificate of authority. Upon approval of the application under s. 222.0201 for certification as a universal bank, the division shall issue to the applicant a certificate of authority stating that the financial institution is certified as a universal bank under this chapter.

AB898,17,21 222.0207 Decertification. A financial institution that is certified as a universal bank under this chapter may elect to terminate its certification upon 60 days' prior written notice to the division and written approval of the division. The financial institution shall, as a condition to the termination, terminate its exercise of all powers granted under this chapter prior to the termination of the certification. Written approval of the termination by the division is void if the financial institution fails to satisfy the precondition to termination under this section.

AB898,17,23 SUBCHAPTER III ORGANIZATION

AB898,18,3 222.0301 Articles of incorporation and bylaws. A universal bank shall continue to operate under its articles of incorporation and bylaws as in effect prior to certification as a universal bank or as such articles or bylaws may be subsequently amended in accordance with the provisions of the chapter under which the universal bank was organized or chartered.

AB898,18,10 222.0303 Name. (1) Use of "bank". Notwithstanding ss. 214.035, 215.40 (1) and 215.60 (1) and subject to subs. (2) and (4), a universal bank may use the word "bank" in its name, without having to include the word "savings". Notwithstanding ss. 215.40 (1) and 215.60 (1) and subject to subs. (2) and (4), a universal bank that is organized under ch. 215 and that uses the word "bank" in its name in accordance with this section need not include the words "savings and loan association" or "savings association" in its name.

AB898,18,13 (2) Distinguishability. Except as provided in subs. (3) and (4), the name of the universal bank shall be distinguishable upon the records of the division from all of the following names:

AB898,18,15 (a) The name of any other financial institution organized under the laws of this state.

AB898,18,17 (b) The name of a national bank or foreign bank authorized to transact business in this state.

AB898,18,21 (3) Exceptions. A universal bank may apply to the division for authority to use a name that does not meet the requirement under sub. (2). The division may authorize the use of the name if any of the conditions under s. 221.0403 (2) (a) or (b) is met.

AB898,18,24 (4) Use of same name. A universal bank may use a name that is used in this state by another financial institution or by an institution authorized to transact business in this state, if the universal bank has done any of the following:

AB898,18,25 (a) Merged with the other institution.

AB898,19,1 (b) Been formed by reorganization of the other institution.

AB898,19,3 (c) Acquired all or substantially all of the assets, including the name, of the other institution.

AB898,19,6 222.0305 Capital and assets. (1) Capital requirements. Notwithstanding subch. VI of ch. 214 and ss. 215.24 and 221.0205, the division shall determine the minimum capital requirements of universal banks.

AB898,19,8 (2) Certain asset requirements. Section 214.045 does not apply to universal banks.

AB898,19,15 222.0307 Acquisitions, mergers and asset purchases. (1) In general. A universal bank may, with the approval of the division, purchase the assets of, merge with, acquire or be acquired by any other financial institution, universal bank, national bank, federally chartered savings bank or savings and loan association, or by a holding company of any of these entities. Notwithstanding subch. III of ch. 214 and ss. 214.09 and 215.36, the approval of the division of savings institutions is not required.

AB898,19,19 (2) Applications for approval. An application for approval under sub. (1) shall be submitted on a form prescribed by the division and accompanied by a fee determined by the division. In processing and acting on applications under this section the division shall apply the following standards:

AB898,19,21 (a) For universal banks organized under ch. 214, ss. 214.09, 214.62 to 214.64 and 214.665 and subch. III of ch. 214.

AB898,19,23 (b) For universal banks organized under ch. 215, ss. 215.25, 215.36, 215.53 and 215.73.

AB898,19,24 (c) For universal banks chartered under ch. 221, subchs. VII and IX of ch. 221.

AB898,20,2 SUBCHAPTER IV POWERS

AB898,20,8 222.0401 Federal financial institution powers. (1) In general. Subject to the limitations in this section, universal banks may exercise all powers that may be exercised, directly or indirectly through a subsidiary, by a federally chartered financial institution, including a federally chartered savings bank, a federally chartered savings and loan association, a federally chartered national bank or a federally chartered credit union, or by an affiliate of such an institution.

AB898,20,18 (2) Required notification for exercise of a federal power. Except as provided in sub. (3), a universal bank may not exercise a power under this section without giving 60 days' prior written notice to the division of the universal bank's intention to exercise the power. If the division determines within the 60-day period that the power is not exercisable by federally chartered financial institutions, the division shall disapprove the notice and shall direct the universal bank not to exercise that power. A notice under this subsection that is not disapproved by the division within 60 days after receipt by the division is approved, unless the division and the universal bank mutually agree to extend the notice period for an additional 60 days.

AB898,20,24 (3) Previously recognized federal powers. The division shall periodically publish, in the Wisconsin Administrative Register, a list of all federal powers that it has allowed to be exercised by universal banks under this section. The division shall mail copies of the publication to all universal banks. A universal bank need not give prior written notice to the division of the universal bank's intention to exercise any federal power that the division has included in a list published under this subsection.

AB898,21,4 (4) Exercise of federal powers through a subsidiary. The division may require that certain powers exercisable by universal banks under this section be exercised through a subsidiary of the universal bank with appropriate safeguards to limit the risk exposure of the universal bank.

AB898,21,7 222.0403 Loan powers. (1) Permitted purposes. A universal bank may make, sell, purchase, arrange, participate in, invest in or otherwise deal in loans or extensions of credit for any purpose.

AB898,21,13 (2) In general. Except as provided in subs. (3) to (8), the total liabilities of any person, other than a municipal corporation, to a universal bank for a loan or extension of credit may not exceed 20% of the capital of the universal bank at any time. In determining compliance with this section, liabilities of a partnership includes the liabilities of the general partners, computed individually as to each general partner on the basis of his or her direct liability.

AB898,21,16 (3) Certain secured liabilities. The percentage limitation under sub. (2) is 50% of the universal bank's capital, if the liabilities under sub. (2) are limited to the following types of liabilities:

AB898,21,20 (a) Warehouse receipts. A liability secured by warehouse receipts issued by warehouse keepers licensed and bonded in this state under ss. 99.02 and 99.03 or under the federal Bonded Warehouse Act or holding a registration certificate under ch. 127, if all of the following requirements are met:

AB898,21,21 1. The receipts cover readily marketable nonperishable staples.

AB898,21,22 2. The staples are insured, if it is customary to insure the staples.

AB898,21,24 3. The market value of the staples is not, at any time, less than 140% of the face amount of the obligation.

AB898,22,2 (b) Certain bonds or notes. A liability in the form of a note or bond that meets any of the following qualifications:

AB898,22,5 1. The note or bond is secured by not less than a like amount of bonds or notes of the United States issued since April 24, 1917, or certificates of indebtedness of the United States.

AB898,22,10 2. The note or bond is secured or covered by guarantees or by commitments or agreements to take over, or to purchase, the bonds or notes, and the guarantee, commitment or agreement is made by a federal reserve bank, the federal small business administration, the federal department of defense or the federal maritime commission.

AB898,22,12 3. The note or bond is secured by mortgages or trust deeds insured by the federal housing administration.

AB898,22,14 (4) Obligations of local governmental units. (a) Definition. In this subsection, "local governmental unit" has the meaning given in s. 16.97 (7).

AB898,22,17 (b) General limitation. Except as otherwise provided in this subsection, the total liabilities of a local governmental unit to a universal bank for money borrowed may not, at any time, exceed 25% of the capital of the universal bank.

AB898,22,23 (c) Revenue obligations. Liabilities in the form of revenue obligations of a local governmental unit are subject to the limitations provided in par. (b). In addition, a universal bank is permitted to invest in a general obligation of that local governmental unit in an amount that will bring the combined total of the general obligations and revenue obligations of a single local governmental unit to a sum not in excess of 50% of the capital of the universal bank.

AB898,23,2 (d) General obligations. If the liabilities of the local governmental unit are in the form of bonds, notes or other evidences of indebtedness that are a general obligation of a local governmental unit, the total liability of the local governmental unit may not exceed 50% of the capital of the universal bank.

AB898,23,7 (e) Temporary borrowings. The total amount of temporary borrowings of any local governmental unit maturing within one year after the date of issue may not exceed 60% of the capital of the universal bank. Temporary borrowings and longer-term general obligation borrowings of a single local governmental unit may be considered separately in determining compliance with this subsection.

AB898,23,13 (5) Obligations of certain international organizations; other foreign bonds. A universal bank may purchase bonds offered for sale by the International Bank for Reconstruction and Redevelopment and the Inter-American Development Bank or such other foreign bonds as may be approved under rules established by the division. At no time shall the aggregate investment in any of these bonds issued by a single issuer exceed 10% of the capital of such universal bank.

AB898,23,19 (6) Foreign national government bonds. A universal bank may purchase general obligation bonds issued by any foreign national government if the bonds are payable in United States funds. The aggregate investment in these foreign bonds may not exceed 3% of the capital of the universal bank, except that this limitation does not apply to bonds of the Canadian government and Canadian provinces that are payable in United States funds.

AB898,24,2 (7) Limits established by board. (a) When financial statements required. A universal bank may not make or renew a loan or loans, the aggregate total of which exceeds the level established by the board of directors without being supported by a signed financial statement of the borrower, unless the loan is secured by collateral having a value in excess of the amount of the loan. A signed financial statement furnished by the borrower to a universal bank in compliance with this paragraph must be renewed annually as long as the loan or any renewal of the loan remains unpaid and is subject to this paragraph.

AB898,24,7 (b) Treatment of loans complying with limits. A loan or a renewal of a loan made by a universal bank in compliance with par. (a), without a signed financial statement, may be treated by the universal bank as entirely independent of any secured loan made to the same borrower if the loan does not exceed the limitations provided in this section.

AB898,24,8 (8) Exceptions. This section does not apply to any of the following:

AB898,24,12 (a) Liabilities secured by certain short-term federal obligations. A liability that is secured by not less than a like amount of direct obligations of the United States which will mature not more than 18 months after the date on which such liabilities to the universal bank are entered into.

AB898,24,16 (b) Certain federal and state obligations or guaranteed obligations. A liability that is a direct obligation of the United States or this state, or an obligation of any governmental agency of the United States or this state, that is fully and unconditionally guaranteed by the United States or this state.

AB898,24,18 (c) Commodity Credit Corporation liabilities. A liability in the form of a note, debenture or certificate of interest of the Commodity Credit Corporation.

AB898,24,22 (d) Discounting bills of exchange or business or commercial paper. A liability created by the discounting of bills of exchange drawn in good faith against actually existing values or the discounting of commercial or business paper actually owned by the person negotiating the same.

AB898,25,3 (e) Certain other federal or federally guaranteed obligations. In obligations of, or obligations that are fully guaranteed by, the United States and in obligations of any federal reserve bank, federal home loan bank, the Student Loan Marketing Association, the Government National Mortgage Association, the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, the Export-Import Bank of Washington or the Federal Deposit Insurance Corporation.