(6) “Insured depository institution" has the meaning set forth in 12 USC 1813(c)(2).
(7) “Well capitalized" has the meaning set forth in 12 USC 1831o(b)(1)(A).
DFI—SL 21.02 CONTROL AND INTEREST. Subject to s. DFI—SL 21.03 and s. DFI—SL 21.04, a financial institution may control a financial subsidiary or hold an interest in a financial subsidiary to engage in financial activities.
DFI—SL 21.03 APPLICATION. A financial institution desiring to control or hold an interest in a financial subsidiary shall apply to the division on forms prescribed by the division and shall pay the fee prescribed by the division. An application submitted to the division shall either be approved or disapproved by the division in writing within 30 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 30 days.
DFI—SL 21.04 CONDITIONS AND REQUIREMENTS. (1) A financial institution may control a financial subsidiary or hold an interest in a financial subsidiary to engage in financial activities only if the financial subsidiary engages in financial activities or activities in which the financial institution is permitted to engage under other applicable law. The financial subsidiary may also engage in any other activity approved by rule of the division. However, the financial subsidiary may not engage in any activity as a principal that is not permissible for a financial subsidiary of a national bank as a principal unless the activity is authorized by the Federal Deposit Insurance Corporation pursuant to 12 USC 1831a.
(2) The financial institution must receive the prior approval of the division to control or hold an interest in a financial subsidiary.
(3) The financial institution and each insured depository institution affiliate of the financial institution must be well capitalized (after the capital deduction required under ch. DFI—SL 21.05)).
(4) The financial institution must meet any requirements of 12 USC 1831w applicable to the financial institution.
(5) The division may establish additional limits or requirements on financial institutions and financial subsidiaries if the division determines that the limits or requirements are necessary for the protection of depositors, members, investors or the public.
(6) For any period during which a financial institution fails to meet these requirements, the division may by order limit or restrict the activities of the financial subsidiary or require the divestiture of the financial institution's interest in the financial subsidiary.
DFI—SL 21.05 CAPITAL DEDUCTION. The aggregate amount of the outstanding equity investment, including retained earnings, of a financial institution in all financial subsidiaries controlled by the financial institution shall be deducted from the assets and tangible equity of the financial institution as determined by the division, and the assets and liabilities of the financial subsidiaries shall not be consolidated with those of the financial institution.
DFI—SL 21.06 DISCLOSURE. Any published financial statement of a financial institution that controls a financial subsidiary shall separately present financial information for the financial institution in the manner proved in s. DFI—SL 21.05.
DFI—SL 21.07 SAFEGUARDS FOR THE FINANCIAL INSTITUTION. A financial institution that establishes or maintains a financial subsidiary shall ensure the following:
(1) The procedures of the financial institution for identifying and managing financial and operational risk within the financial institution and the financial subsidiary adequately protect the financial institution from such risk;
(2) The financial institution has, for the protection of the financial institution, reasonable policies and procedures to preserve the separate corporate identity and limited liability of the financial institution and the financial subsidiaries of the financial institution; and
(3) The financial institution is in compliance with this requirement.
DFI—SL 21.08 AFFILIATE REQUIREMENTS. The financial institution must comply with the requirements of 12 USC 371c.
DFI—SL 21.09 PRESERVATION OF EXISTING SUBSIDIARIES. Notwithstanding this chapter, a financial institution may retain control of a subsidiary or retain an interest in a subsidiary that the financial institution lawfully controlled or acquired before the effective date of this chapter, and conduct through such subsidiary any activities lawfully conducted in such subsidiary as of such date. Furthermore, no provision of this chapter shall be construed as superseding the authority for financial institutions to conduct operations through subsidiaries under ch. DFI—SL 15.
DFI—SL 21.10 EXAMINATION AND SUPERVISION. Each financial subsidiary shall be subject to examination and supervision by the division in the same manner and to the extent as the financial institution.
DFI—SL 21.11 REPORT OF DISPOSITION OF FINANCIAL SUBSIDIARY. Prior to disposition of a financial subsidiary, the financial institution shall inform the division by letter of the terms of the transaction.
Reference to Statutory Authority and Analysis Prepared by Department of Financial Institutions, Division of Banking
Analysis: To create ch. DFI—SL 21. Statutory authority: ss. 215.03(1), 215.135(1) and (2), and 227.11(2), Stats. The proposed rule would allow state-chartered savings and loans to control or hold an interest in financial subsidiaries that would engage in activities that are financial in nature or incidental to a financial activity. The objective of the rule is to ensure that state-chartered savings and loans will not be at a competitive disadvantage to other financial institutions that have received similar authority under the Gramm-Leach-Bliley Act of 1999 (“Act"). National banks are permitted under the Act to control or hold an interest in financial subsidiaries to engage in certain activities that are financial in nature or incidental to a financial activity. These financial activities are broader than the additional authority provisions of s. 215.135(1) and (2), Stats., and the subsidiary provisions of s. 215.13(26), Stats. and DFI—SL 15. Lastly, the proposed rule is consistent with Section 121(d) of the Act which permits insured state savings and loans to control or hold an interest in a financial subsidiary subject to safety and soundness firewalls. The proposed rule would be the implementing provision under state law which may be necessary for state-chartered savings and loans to exercise this new authority. Under the proposed rule, a financial institution may apply to the division to control or hold an interest in a financial subsidiary to engage in financial activities. The financial institution must meet certain conditions and requirements, and additional provisions regarding capital deduction, disclosure, safeguarding policy and procedures, and affiliate requirements apply. The division shall examine and supervise each financial subsidiary. Prior to disposition of a financial subsidiary, the financial institution shall inform the division. Agency person to be contacted for substantive questions and responsible for agency's internal process: John A. Gervasi, Administrator, Division of Savings Institutions, tel. 261-2300.
Fiscal Estimate
The fiscal effect on the state may be to increase existing revenues. Any increase in costs may be possible to absorb within the agency's budget. There is no local government cost. The fund source affected is program. The proposed rule provides that a financial institution desiring to control or hold an interest in a financial subsidiary shall apply to the division on forms prescribed by the division and shall pay the fee prescribed by the division. For similar types of applications, such as branch applications, the division has established a fee of $500. Current staff will review the applications. There are 9 state-chartered savings and loans. If all state-chartered savings and loans establish a financial subsidiary, the fiscal effect would be $4,500. A copy of the full fiscal estimate may be obtained from the division at no charge by contacting John A. Gervasi, Administrator, Department of Financial Institutions, Division of Savings Institutions, P.O. Box 8306, Madison, WI 53708-8306, tel. (608) 261-2300.
Initial Regulatory Flexibility Analysis
The proposed rule will not have an effect on small businesses.
Notice of Hearing
Regulation & Licensing
Notice is hereby given that pursuant to authority vested in the Department of Regulation and Licensing in ss. 227.11 (2) and 440.62 (5) (b), Stats., and interpreting s. 440.62 (5) (b), Stats., the Department of Regulation and Licensing will hold a public hearing at the time and place indicated below to consider an order to amend s. RL 62.11 (1) (L), relating to holding classes outside of the classroom.
Hearing Information
April 3, 2000 1400 East Washington Ave.
Monday Room 179A
10:15 A.M. Madison, Wisconsin
Appearances at the Hearing
Interested persons are invited to present information at the hearing. Persons appearing may make an oral presentation but are urged to submit facts, opinions and argument in writing as well. Facts, opinions and argument may also be submitted in writing without a personal appearance by mail addressed to the Department of Regulation and Licensing, Office of Administrative Rules, P.O. Box 8935, Madison, Wisconsin 53708. Written comments must be received by April 17, 2000 to be included in the record of rule-making proceedings.
Analysis prepared by the Department of Regulation and Licensing
Statutes authorizing promulgation: ss. 227.11 (2) and 440.62 (5) (b)
Statute interpreted: s. 440.62 (5) (b)
The Department of Regulation and Licensing proposes to revise its rules to allow students in a barbering and cosmetology practitioner, manicuring, aesthetician or electrologists school program to attend classes outside of their school. Under current rules, classes may only be held at the location of the school identified in its latest application. These proposed rules would allow students to receive classroom credit for visiting an actual establishment.
The department believes it is important for students to receive exposure to the current industry trends and techniques necessary for the protection of the health, safety and welfare of the Wisconsin citizenry.
Fiscal Estimate
1. The anticipated fiscal effect on the fiscal liability and revenues of any local unit of government of the proposed rule is: $0.00.
2. The projected anticipated state fiscal effect during the current biennium of the proposed rule is: $0.00.
3. The projected net annualized fiscal impact on state funds of the proposed rule is: $0.00.
Initial Regulatory Flexibility Analysis
These proposed rules will be reviewed by the department through its Small Business Review Advisory Committee to determine whether there will be an economic impact on a substantial number of small businesses, as defined in s. 227.114 (1) (a), Stats.
Copies Of Rule And Contact Person
Copies of this proposed rule are available without cost upon request to: Pamela Haack, Department of Regulation and Licensing, Office of Administrative Rules, 1400 East Washington Avenue, Room 171, P.O. Box 8935, Madison, Wisconsin 53708 (608) 266-0495.
Notice of Proposed Rule
Revenue
Notice is hereby given that, pursuant to s. 71.80(1)(c), Stats., and interpreting ss. 71.03(6m), 71.51 to 71.55, 71.58(1)(b), 71.74(8)(a), 71.75(2) and (7), 71.77(2) and 71.82(1)(c), Stats., and according to the procedure set forth in s. 227.16(2)(e), Stats., the Department of Revenue will adopt the following rules as proposed in this notice without public hearing unless, within 30 days after publication of this notice on March 15, 2000, it is petitioned for a public hearing by 25 natural persons who will be affected by the rule, a municipality which will be affected by the rule, or an association which is representative of a farm, labor, business or professional group which will be affected by the rule.
Contact Person
Please contact Mark Wipperfurth at (608) 266-8253, if you have any questions regarding this proposed rule order.
Analysis by the Department of Revenue
Statutory authority: s. 71.80(1)(c)
Statutes interpreted: ss. 71.03(6m), 71.51 to 71.55, 71.58(1)(b),
71.74(8)(a), 71.75(2) and (7), 71.77(2) and 71.82(1)(c)
SECTION 1. Tax 14.01(1) and (2)(intro.) are revised, to conform language and punctuation to Legislative Council Rules Clearinghouse (“Clearinghouse") standards.
SECTION 2. Tax 14.01(2)(a), (b), (c) and (d) are renumbered Tax 14.01(2)(b), (c), (d) and (a), to place the definitions in alphabetical order after changing “general relief" to “county relief," to conform to Clearinghouse standards. As renumbered, Tax 14.01(2)(a) is revised, to update language relating to county relief and Tax 14.01(2)(b) is revised, to conform language to Clearinghouse standards.
SECTION 3. Tax 14.01(3)(a) is revised, to conform language to Clearinghouse standards.
Tax 14.01(4) is revised, to reflect proper filing procedures and to conform style to Clearinghouse standards.
SECTIONS 4, 5 AND 6. Tax 14.01(5)(a) is renumbered Tax 14.01(5)(a)(intro.) and revised, Tax 14.01(5)(a)1. and 2. are created and Tax 14.01(5)(b) is revised, to reflect proper filing deadlines and statutory references, relating to filing an original or amended homestead credit claim.
Tax 14.01(6) is revised, to clarify a provision relating to deceased persons and to conform style and punctuation to Clearinghouse standards.
SECTIONS 7 AND 8. Tax 14.01(7) is renumbered Tax 14.01(7)(a)(intro.) and revised, and Tax 14.01(7)(a)1. to 4. and (b) are created, to reflect proper procedures for adjusting incorrect claims.
SECTION 9. Tax 14.01(8) is revised, to more accurately reflect the content of the subsection and update the provisions relating to the imposition of interest, and to conform punctuation to Clearinghouse standards.
SECTIONS 10 AND 11. Tax 14.02(2)(c) is repealed and Tax 14.02(9) is revised, and notes are created, to place a mailing address in a note rather than in the text of the rule, to conform to Clearinghouse standards.
Tax 14.02(5) is revised, to reflect proper terminology relating to property taxes.
Tax 14.02(10) is revised, to conform format to Clearinghouse standards.
Tax 14.02(11) is revised, to clarify that a person who is deceased cannot be a claimant.
SECTIONS 12 AND 13. Tax 14.03(2)(intro.) is created and Tax 14.03(3)(a), (b) and (c)2. are revised, to conform style and punctuation to Clearinghouse standards.
Tax 14.03(4)(b)(intro.) is revised, to reflect the content of the paragraph as amended.
Tax 14.03(4)(b)2. is revised, to clarify a provision relating to support payments.
SECTION 14. Tax 14.03(4)(b)3. is repealed and recreated, to update provisions relating to cash public assistance and county relief and to list additional items of income that are includable.
SECTIONS 15 AND 16. Tax 14.03(4)(b)5.(intro.) is revised and Tax 14.03(4)(b)5.e. is created, to clarify provisions relating to social security payments.
Tax 14.03(4)(b)5.a. is revised, to conform punctuation to Clearinghouse standards.
SECTION 17. Tax 14.03(4)(b)7. is revised, to clarify a provision relating to payments to survivors of deceased veterans.
Tax 14.03(4)(b)11. is revised, to clarify a provision relating to scholarship income.
Tax 14.03(4)(b)12. is revised, to update terminology relating to unemployment insurance.
Tax 14.03(4)(b)14. and 15. are revised, to update and clarify provisions relating to gain from the sale of a personal residence, pursuant to the amendment of s. 71.01(6), Stats., by 1997 Wis. Act 37.
Tax 14.03(4)(b)20. is revised, to update terminology relating to Native Americans.
SECTION 18. Tax 14.03(4)(b)23.(intro.) and a. to i. are renumbered Tax 14.03(4)(c)(intro.) and 1. to 9., to list items deducted in determining Wisconsin adjusted gross income in a separate paragraph. As renumbered, Tax 14.03(4)(c)(intro.) is revised, to add a reference to items deducted in determining limited liability company income or losses, and Tax 14.03(4)(c)6. is revised, to add a reference to contributions to SIMPLEs and to conform punctuation to Clearinghouse standards.
SECTION 19. Tax 14.03(5) is repealed and recreated, to clarify provisions relating to exclusions from income and list additional items that constitute exclusions from income. This includes previously reported scholarship income, pursuant to the amendment of s. 71.52(6), Stats., by 1997 Wis. Act 27.
SECTION 20. Tax 14.04(2) is revised, to remove obsolete language relating to general property tax relief.
Tax 14.04(3)(b) and (c) are revised, to clarify various provisions relating to property taxes accrued.
