AB597: Bill Text

1995 - 1996 LEGISLATURE

1995 Assembly BILL 597

October 2, 1995 - Introduced by Representatives Kaufert, Gard, Olsen, Goetsch, Green, Kreibich, Lehman, Hahn, Vrakas, Seratti, Grothman, Kelso and Ward, cosponsored by Senator Darling, by request of Commissioner of Savings and Loan. Referred to Committee on Financial Institutions.

AB597,2,2 An Act to repeal 215.02 (6) (a) 4. b. and 215.02 (6) (a) 5.; to consolidate, renumber and amend 215.02 (6) (a) 4. (intro.) and a.; to amend 215.02 (6) (a) (intro.), 215.02 (6) (a) 3., 215.02 (16) (a), 215.02 (16) (b), 215.02 (16) (c) 1., 215.02 (16) (c) 2., 215.02 (16) (c) 3., 215.02 (16) (d), 215.02 (16) (e), 215.03 (2) (b), 215.13 (26) (c), 215.13 (26) (d), 215.13 (31), 215.21 (16) (a) (intro.), 215.21 (28), 215.26 (8) (b) 3., 215.32 (15) (title), 215.32 (15) (a), 215.33 (3) (b) 2., 215.33 (6), 215.35 (2) (b), 215.36 (1) (d), 215.40 (13) (a) 9., 215.57 (1) (d) 1., 215.60 (11) (a) 7., 215.77 (1) (d) 1. and 551.22 (4); to repeal and recreate 215.02 (6) (a) (intro.), 215.02 (6) (a) 3., 215.02 (6) (a) 4., 215.02 (16) (a), 215.02 (16) (b), 215.02 (16) (c) 1., 215.02 (16) (c) 2., 215.02 (16) (d), 215.03 (2) (b), 215.13 (26) (d), 215.13 (31), 215.21 (28), 215.26 (8) (b) 3., 215.32 (15) (a), 215.33 (3) (b) 2., 215.33 (6), 215.40 (13) (a) 9., 215.57 (1) (d) 1., 215.60 (11) (a) 7. and 215.77 (1) (d) 1.; to create 215.01 (6m), 215.01 (7m), 215.02 (16) (am), 215.21 (16) (a) 5. and 215.21 (16) (d) of the statutes; and to affect 1995 Wisconsin Act 27, sections 5512 and 5513 and 1995 Wisconsin Act 27, section 9459 (7); relating to: a savings and loan association and savings bank securities registration exemption, savings and loan association bond investment authority, savings and loan association annual fees and references to the federal deposit insurance corporation.

Analysis by the Legislative Reference Bureau

This bill makes several changes to the law relating to savings and loan associations and to savings banks.

1. Presently, it is unlawful to sell securities in this state unless the securities are registered with the office of the commissioner of securities (OCS) or are expressly exempt from registration. This bill exempts the stock of state-chartered savings and loan associations and savings banks from OCS registration.

2. Under current law, a savings and loan association may invest in obligations (generally, bonds or notes) of local governmental units if the obligations are assigned one of the 4 highest grades by a national investment rating service or if the obligations are issued by a local governmental unit in which the association maintains an office. Under this bill, an association may also invest in an obligation of a local governmental unit if the commissioner of savings and loan gives prior written approval to make the investment.

3. If an out-of-state financial institution converts into a state-chartered savings and loan association or is absorbed by a state-chartered association, the bill requires the converting or absorbing institution to pay an initial annual fee to the office of the commissioner of savings and loan that is calculated using the assets of the institution becoming subject to state regulation, prorated for the remainder of the institution's fiscal year.

4. The bill updates references to federal examination and deposit insurance agencies in the savings and loan chapter of the statutes to refer to the federal deposit insurance corporation, the entity that is currently responsible for insuring savings and loan association deposit accounts, and to the federal office of thrift supervision, the federal agency that is currently responsible for examining savings and loan associations.

5. Under current law, the fee for late payment of an annual assessments charge and for payment of examination costs is from $10 per day. The bill eliminates the $10-per-day charge and instead requires the payment of interest at an annual rate of 12% on past-due assessments and examination costs.

6. Current law limits the authority of savings and loan associations to make mortgage loans on the security of vacant land. This bill amends these provisions to specifically permit savings and loan associations to make mortgage loans to develop or to acquire and develop land for commercial or industrial use and to specifically prohibit mortgage loans on the security of, or to finance the purchase of, vacant land that is acquired or held for speculation.

For further information see the state fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB597, s. 1 Section 1. 215.01 (6m) of the statutes is created to read:

AB597,3,5 215.01 (6m) "Deposit insurance corporation" means the federal deposit insurance corporation or any other instrumentality of or corporation chartered by the United States that insures deposits of an association and is supported by the full faith and credit of the federal government.

AB597, s. 2 Section 2. 215.01 (7m) of the statutes is created to read:

AB597,3,9 215.01 (7m) "Federal regulatory agency" means the federal office of thrift supervision or other federal agency or entity which supervises and examines an association.

AB597, s. 3 Section 3. 215.02 (6) (a) (intro.) of the statutes is amended to read:

AB597,3,17 215.02 (6) (a) (intro.) The commissioner and all employes of the office and members of the review board shall keep confidential all the facts and information obtained in the course of examinations by the office and all examination and other confidential information obtained from a deposit insurance corporation, a federal regulatory agency or any state or federal regulatory authority, including an authority of this state or another state, for financial institutions, mortgage bankers, insurance or securities, except:

AB597, s. 4 Section 4. 215.02 (6) (a) (intro.) of the statutes, as affected by 1995 Wisconsin Acts 27 and .... (this act), is repealed and recreated to read:

AB597,4,4 215.02 (6) (a) (intro.) All employes of the division and members of the review board shall keep confidential all the facts and information obtained in the course of examinations by the office and all examination and other confidential information obtained from a deposit insurance corporation, a federal regulatory agency or any state regulatory authority, including an authority of this state or another state, for financial institutions, mortgage bankers, insurance or securities, except:

AB597, s. 5 Section 5. 215.02 (6) (a) 3. of the statutes is amended to read:

AB597,4,10 215.02 (6) (a) 3. Under rules prescribed by the commissioner, for For the purpose of comparing notes as to matters affecting an association with an examiner of the federal home loan bank board or federal savings and loan a deposit insurance corporation or a federal regulatory agency as to any association whose savings accounts are insured by the federal savings and loan deposit insurance corporation.

AB597, s. 6 Section 6. 215.02 (6) (a) 3. of the statutes, as affected by 1995 Wisconsin Acts 27 and .... (this act), is repealed and recreated to read:

AB597,4,16 215.02 (6) (a) 3. For the purpose of comparing notes as to matters affecting an association with an examiner of the a deposit insurance corporation or a federal regulatory agency as to any association whose savings accounts are insured by the deposit insurance corporation.

AB597, s. 7 Section 7. 215.02 (6) (a) 4. of the statutes, as affected by 1995 Wisconsin Act .... (this act), is repealed and recreated to read:

AB597,4,23 215.02 (6) (a) 4. The division may furnish to the deposit insurance corporation, to a federal regulatory agency or to any official or examiner of a deposit insurance corporation or a federal regulatory agency a copy of any examination made by the division of any association or of any report made by an association and filed with the division.

AB597, s. 8 Section 8. 215.02 (6) (a) 4. (intro.) and a. of the statutes are consolidated, renumbered 215.02 (6) (a) 4. and amended to read:

AB597,5,6 215.02 (6) (a) 4. (intro.) The commissioner may: a. Furnish furnish to the federal home loan bank board or federal savings and loan deposit insurance corporation, to a federal regulatory agency or to any official or examiner thereof of a deposit insurance corporation or a federal regulatory agency a copy of any examination made by the office of any association or of any report made by such an association and filed with the office.

AB597, s. 9 Section 9. 215.02 (6) (a) 4. b. of the statutes is repealed.

AB597, s. 10 Section 10. 215.02 (6) (a) 5. of the statutes is repealed.

AB597, s. 11 Section 11. 215.02 (16) (a) of the statutes is amended to read:

AB597,5,13 215.02 (16) (a) Annual fee. Associations organized under this chapter An association shall, on or before July 15 16, pay an annual fee as determined by the commissioner and the review board, but not exceeding 12 cents per $1,000 of assets or fraction thereof, as of the close of the preceding calendar year.

AB597, s. 12 Section 12. 215.02 (16) (a) of the statutes, as affected by 1995 Wisconsin Acts 27 and .... (this act), is repealed and recreated to read:

AB597,5,18 215.02 (16) (a) Annual fee. An association shall, before July 16, pay an annual fee as determined by the division and the review board, but not exceeding 12 cents per $1,000 of assets or fraction thereof, as of the close of the preceding calendar year.

AB597, s. 13 Section 13. 215.02 (16) (am) of the statutes is created to read:

AB597,5,25 215.02 (16) (am) Fees on conversion or absorption. If a depository institution that is not a state-chartered association converts to a state-chartered association or is absorbed by a state-chartered association, the converted association or the absorbing association shall pay an annual fee based on the assets of the converted association or the absorbed association at the same rate as other associations for the prorated portion of the fiscal year in which the association is subject to this chapter.

AB597, s. 14 Section 14. 215.02 (16) (b) of the statutes is amended to read:

AB597,6,5 215.02 (16) (b) Penalty for failure to pay fee. An association failing to pay the annual fee to the commissioner by before July 15 16 of each year shall, if ordered by the commissioner, forfeit $10 for each day it fails to pay the fee pay the fee and pay interest at an annual rate of 12% on any portion of the fee that is past due.

AB597, s. 15 Section 15. 215.02 (16) (b) of the statutes, as affected by 1995 Wisconsin Acts 27 and .... (this act), is repealed and recreated to read:

AB597,6,11 215.02 (16) (b) Penalty for failure to pay fee. An association failing to pay the annual fee to the division before July 16 of each year shall, if ordered by the division, pay the fee and pay interest at an annual rate of 12% on any portion of the fee that is past due.

AB597, s. 16 Section 16. 215.02 (16) (c) 1. of the statutes is amended to read:

AB597,6,18 215.02 (16) (c) Regular examination costs. 1. On or before June 30 Before July 1 of each year the commissioner and the review board shall fix a per-diem per-hour charge for the services of each examiner used in the examination of an association, for the next 12 months. Such per diem The per-hour charge shall be the same for all associations. The hours constituting a day shall be that which is fixed for state employes by s. 230.35.

AB597, s. 17 Section 17. 215.02 (16) (c) 1. of the statutes, as affected by 1995 Wisconsin Acts 27 and .... (this act), is repealed and recreated to read:

AB597,6,24 215.02 (16) (c) 1. Before July 1 of each year the division and the review board shall fix a per-hour charge for the services of each examiner used in the examination of an association, for the next 12 months. The per-hour charge shall be the same for all associations.

AB597, s. 18 Section 18. 215.02 (16) (c) 2. of the statutes is amended to read:

AB597,7,4 215.02 (16) (c) 2. After the per diem per-hour charge for each examiner has been fixed by the commissioner and review board, each association shall be uniformly billed for examinations during the ensuing year on a fixed per diem per-hour basis for each examiner engaged in such an examination.

AB597, s. 19 Section 19. 215.02 (16) (c) 2. of the statutes, as affected by 1995 Wisconsin Acts 27 and .... (this act), is repealed and recreated to read:

AB597,7,9 215.02 (16) (c) 2. After the per-hour charge for each examiner has been fixed, each association shall be uniformly billed for examinations during the ensuing year on a fixed per-hour basis for each examiner engaged in an examination.

AB597, s. 20 Section 20. 215.02 (16) (c) 3. of the statutes is amended to read:

AB597,7,13 215.02 (16) (c) 3. Every charge so made to an association Charges assessed under this paragraph shall be paid within 30 days from the time date on which the association receives notice of the assessment.

AB597, s. 21 Section 21. 215.02 (16) (d) of the statutes is amended to read:

AB597,7,20 215.02 (16) (d) The commissioner shall charge any special costs and expenses incurred because of for special work required by the commissioner, caused by an association not having because an association does not have proper or sufficient management or failing fails to keep its books, records and other matters in a standard and approved manner. An itemized statement of such special charges must be submitted to the association.

AB597, s. 22 Section 22. 215.02 (16) (d) of the statutes, as affected by 1995 Wisconsin Acts 27 and .... (this act), is repealed and recreated to read:

AB597,8,2 215.02 (16) (d) The division shall charge any special costs and expenses incurred for special work required because an association does not have proper or sufficient management or fails to keep its books, records and other matters in a standard and approved manner. An itemized statement of special charges must be submitted to the association.

AB597, s. 23 Section 23. 215.02 (16) (e) of the statutes is amended to read:

AB597,8,8 215.02 (16) (e) Penalty for failure to pay examination costs. Any An association failing to shall pay the charges and assessments under pars. (c) and (d) shall be subject to the penalty under par. (b) for each day it fails to pay the charge or assessment after it becomes due when due and shall pay interest at an annual rate of 12% on any portion of the charges and assessments that are past due.

AB597, s. 24 Section 24. 215.03 (2) (b) of the statutes is amended to read:

AB597,8,15 215.03 (2) (b) The commissioner may accept an examination-audit made by the federal home loan bank board deposit insurance corporation, a federal regulatory agency or any other governmental agency authorized to make examination-audits of savings and loan associations pursuant to their rules and regulations. The examination-audit must comply with the procedure established by the commissioner.

AB597, s. 25 Section 25. 215.03 (2) (b) of the statutes, as affected by 1995 Wisconsin Acts 27 and .... (this act), is repealed and recreated to read:

AB597,8,22 215.03 (2) (b) The division may accept an examination-audit made by the deposit insurance corporation, a federal regulatory agency or any other governmental agency authorized to make examination-audits of associations pursuant to their rules and regulations. The examination-audit must comply with the procedure established by the division.

AB597, s. 26 Section 26. 215.13 (26) (c) of the statutes is amended to read:

AB597,9,3 215.13 (26) (c) Savings accounts of savings and loan associations, located outside the state, providing such if those savings accounts are insured by an instrumentality of the United States the deposit insurance corporation;

AB597, s. 27 Section 27. 215.13 (26) (d) of the statutes is amended to read:

AB597,9,22 215.13 (26) (d) Bonds, notes or other evidences of indebtedness which are general obligations supported by the full faith and credit of any state in the United States or any city, town, village, county, technical college district or school district in any state in the United States if the obligations have been assigned one of the 4 highest grades by a nationally recognized investment rating service. Before purchasing any obligation under this paragraph other than an obligation issued in this state, the association shall ascertain whether suitable obligations issued in this state are available in the quantity sought by the association at a competitive rate of return at the time the investment is intended to be made. If such obligations are available, the association shall give preference to obligations issued in this state. Notwithstanding any other requirement of this paragraph, an association may invest not more than one percent of its assets in the obligations of any city, town, village, county, technical college district or school district in this state which are not assigned one of the 4 highest grades by a nationally recognized investment rating service, if the obligations are issued by a city, town, village, county, technical college district or school district in which the association maintains one or more offices or if the commissioner gives the association prior written approval to make the investment.

AB597, s. 28 Section 28. 215.13 (26) (d) of the statutes, as affected by 1995 Wisconsin Act .... (this act), is repealed and recreated to read:

AB597,10,17 215.13 (26) (d) Bonds, notes or other evidences of indebtedness which are general obligations supported by the full faith and credit of any state in the United States or any city, town, village, county, technical college district or school district in any state in the United States if the obligations have been assigned one of the 4 highest grades by a nationally recognized investment rating service. Before purchasing any obligation under this paragraph other than an obligation issued in this state, the association shall ascertain whether suitable obligations issued in this state are available in the quantity sought by the association at a competitive rate of return at the time the investment is intended to be made. If such obligations are available, the association shall give preference to obligations issued in this state. Notwithstanding any other requirement of this paragraph, an association may invest not more than one percent of its assets in the obligations of any city, town, village, county, technical college district or school district in this state which are not assigned one of the 4 highest grades by a nationally recognized investment rating service, if the obligations are issued by a city, town, village, county, technical college district or school district in which the association maintains one or more offices or if the division gives the association prior written approval to make the investment.

AB597, s. 29 Section 29. 215.13 (31) of the statutes is amended to read:

AB597,10,21 215.13 (31) Insurance of savings accounts. Insure the savings accounts of savers with the federal savings and loan deposit insurance corporation or with another instrumentality approved by the commissioner.

AB597, s. 30 Section 30. 215.13 (31) of the statutes, as affected by 1995 Wisconsin Acts 27 and .... (this act), is repealed and recreated to read:

AB597,11,3 215.13 (31) Insurance of savings accounts. Insure the savings accounts of savers with the deposit insurance corporation or with another instrumentality approved by the division.

AB597, s. 31 Section 31. 215.21 (16) (a) (intro.) of the statutes is amended to read:

AB597,11,6 215.21 (16) (a) (intro.) An association may not make a mortgage loan on the security of vacant land, except if the loan is any of the following:

AB597, s. 32 Section 32. 215.21 (16) (a) 5. of the statutes is created to read:

AB597,11,9 215.21 (16) (a) 5. A loan to develop or to acquire and develop land for commercial or industrial use.

AB597, s. 33 Section 33. 215.21 (16) (d) of the statutes is created to read:

AB597,11,12 215.21 (16) (d) An association may not make a mortgage loan on the security of or to finance the purchase of vacant land that is acquired or held for speculation.

AB597, s. 34 Section 34. 215.21 (28) of the statutes is amended to read:

AB597,11,21 215.21 (28) (title) Loans outside the lending area. Subject to the rules issued by of the commissioner and without regard to the limitation set forth in sub. (2), an association may make or invest its funds in loans, originated and serviced by or through an institution, the accounts or deposits of which are insured by the federal savings and loan insurance corporation or the federal deposit insurance corporation or by or through an approved federal housing administration mortgagee, in an aggregate amount not exceeding 10% of such association's assets on the security of real estate or leasehold interests.