Investment powers
To the extent consistent with safe and sound banking powers, a universal bank
may purchase, sell, underwrite and hold investment securities in an amount up to
100% of the universal bank's capital. Investment securities include commercial
paper; banker's acceptances; marketable securities in the form of bonds, notes and
debentures; and similar instruments. A bank may purchase, sell, underwrite and
hold equity securities, consistent with safe and sound banking principles, in an
amount up to 20% of the capital of the universal bank, unless the division of banking
approves a greater percentage. Universal banks may also invest in certain housing
properties and projects, except that the total investment in any one project may not
exceed 15% of the universal bank's capital and except that the total amount invested
in housing properties and projects may not exceed 50% of the universal bank's
capital. A universal bank may take equity positions in profit-participation projects,
including projects funded through loans from the universal bank, in an aggregate
amount not to exceed 20% of capital. The division of banking may suspend the
authority to invest in profit-participation projects.
The bill provides that the universal banks may invest without limitations in
certain types of securities, including: 1) obligations of certain federal agencies or
federally chartered corporations and associations; 2) deposit accounts or insured
obligations of insured financial institutions; 3) securities of certain business
development corporations and urban renewal investment corporations; 4) certain
securities of bank insurance companies; 5) securities of certain corporations
operating automated teller machines; 6) securities of service corporation
subsidiaries of a universal bank; 7) advances of federal funds; 8) risk management
instruments, including financial futures transactions, financial operations
transactions and forward commitments, solely for the purpose of reducing, hedging
or otherwise managing its interest rate risk exposure; 9) securities of subsidiaries
exercising certain fiduciary powers; and 10) securities of agricultural credit
corporations. Universal banks may invest in other financial institutions. The
investment powers of universal banks may be exercised directly or indirectly
through a subsidiary, unless the division of banking requires the investment to be
made through a subsidiary in order to limit the risk exposure of the universal bank.
The bill contains specific provisions governing the purchase by a universal bank of
its own stock and of stock in banks and bank holding companies.
Deposit and trust powers
The bill grants universal banks the authority to establish the types and terms
of deposits that the universal banks solicit and accept. A universal bank may pledge
its assets as security for deposits. With the approval of the division of banking, a

universal bank may securitize its assets for sale to the public, subject to any
procedures established by the division. Universal banks may exercise safe deposit
powers, and universal banks have a lien on the contents of property accepted for
safekeeping for their safekeeping charges. If these charges remain unpaid for 2
years or property accepted for safekeeping is not called for within 2 years, the bank
may sell the property at public auction. The bill authorizes universal banks to
exercise trust powers that are permitted to trust company banks.
Incidental and related powers
Under the bill, a universal bank may exercise all powers necessary or
convenient to effect the purposes for which the universal bank is organized or to
further the businesses in which the universal bank is lawfully engaged. Current law
does not have a similar provision for savings banks, savings and loan associations
or state banks.
In addition to these necessary or convenient powers, the bill allows universal
banks to engage, directly or indirectly through a subsidiary, in activities that are
reasonably related or incident to the purposes of the universal bank. The bill
contains a list of activities that meet the reasonably related or incidental powers
criteria. The listed activities include: 1) business and professional services; 2) data
processing; 3) courier and messenger services; 4) credit-related activities; 5)
consumer services; 6) real estate related services; 7) insurance services, other than
insurance underwriting; 8) securities brokerage; 9) investment advice; 10) securities
and bond underwriting; 11) mutual fund activities; 12) financial consulting; 13) tax
planning and preparation; 14) community development and charitable activities;
and 15) debt cancellation contracts.
In addition, any activity permitted to be engaged in by bank holding companies
under the federal Bank Holding Company Act may be engaged in by a universal
bank. The division of banking is permitted to expand the list of reasonably related
or incidental powers by rule. A universal bank is required to give 60 days' prior
written notice, to the division of banking, of the bank's intention to engage in a
necessary or convenient, reasonably related or incidental power. The division of
banking may deny the authority of a universal bank to engage in a reasonably
related or incidental power, other than those activities that are specifically
enumerated, if the division of banking determines that the power is not a reasonably
related or incidental power, or that the financial institution is not well-capitalized
or adequately capitalized or is the subject of an enforcement action. The division of
banking may require that any of these activities be conducted through a subsidiary
with appropriate safeguards to limit the risk exposure of the universal bank.
Amounts invested in a single subsidiary may not exceed 20% of the universal bank's
capital, unless a higher percentage is approved by the division of banking.
OTHER CHANGES
In addition to creating universal banks, this bill changes the name of the
division of savings and loan in the department of financial institutions to the division
of savings institutions. The bill further provides that any action taken by the
division of savings and loan under the name of the division of savings institutions

has the same effect as if the action had been taken under the name of the division
of savings and loan.
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:
AB898, s. 1 1Section 1. 15.183 (2) of the statutes is amended to read:
AB898,6,72 15.183 (2) (title) Division of savings and loan institutions. There is created
3a division of savings and loan institutions. Prior to July 1, 2000, the division is
4attached to the department of financial institutions under s. 15.03. After June 30,
52000, the division is created in the department of financial institutions. The
6administrator of the division shall be appointed outside the classified service by the
7secretary of financial institutions and shall serve at the pleasure of the secretary.
AB898, s. 2 8Section 2. 20.144 (1) (g) of the statutes is amended to read:
AB898,6,199 20.144 (1) (g) General program operations. The amounts in the schedule for
10the general program operations of the department of financial institutions. Except
11as provided in pars. (a), (h), (i) and (u), all moneys received by the department, other
12than by the office of credit unions, the division of banking and the division of savings
13and loan institutions, and 88% of all moneys received by the department's division
14of banking and the department's division of savings and loan institutions shall be
15credited to this appropriation, but any balance at the close of a fiscal year exceeding
1610% of the previous fiscal year's expenditures under this appropriation shall lapse
17to the general fund. Annually, $200,000 of the amounts received under this
18appropriation account shall be transferred to the appropriation account under s.
1920.575 (1) (g).
AB898, s. 3 20Section 3. 20.912 (4) of the statutes is amended to read:
AB898,7,11
120.912 (4) Insolvent depositories. When the bank, savings and loan
2association, savings bank or credit union on which any check, share draft or other
3draft is drawn by the state treasurer before payment of such check, share draft or
4other draft becomes insolvent or is taken over by the division of banking, division of
5savings and loan institutions, the federal home loan bank board, the U.S. office of
6thrift supervision, the federal deposit insurance corporation, the resolution trust
7corporation, the office of credit unions, the administrator of federal credit unions or
8the U.S. comptroller of the currency, the state treasurer shall on the demand of the
9person in whose favor such check, share draft or other draft was drawn and upon the
10return to the treasurer of such check, share draft or other draft issue a replacement
11for the same amount.
AB898, s. 4 12Section 4. 34.01 (2) (a) of the statutes is amended to read:
AB898,8,613 34.01 (2) (a) Any loss of public moneys, which have been deposited in a
14designated public depository in accordance with this chapter, resulting from the
15failure of any public depository to repay to any public depositor the full amount of
16its deposit because the office of credit unions, administrator of federal credit unions,
17U.S. comptroller of the currency, federal home loan bank board, U.S. office of thrift
18supervision, federal deposit insurance corporation, resolution trust corporation,
19division of banking or division of savings and loan institutions has taken possession
20of the public depository or because the public depository has, with the consent and
21approval of the office of credit unions, administrator of federal credit unions, U.S.
22office of thrift supervision, federal deposit insurance corporation, resolution trust
23corporation, division of banking or division of savings and loan institutions, adopted
24a stabilization and readjustment plan or has sold a part or all of its assets to another
25credit union, bank, savings bank or savings and loan association which has agreed

1to pay a part or all of the deposit liability on a deferred payment basis or because the
2depository is prevented from paying out old deposits because of rules of the office of
3credit unions, administrator of federal credit unions, U.S. comptroller of the
4currency, federal home loan bank board, U.S. office of thrift supervision, federal
5deposit insurance corporation, resolution trust corporation, division of banking or
6division of savings and loan institutions.
AB898, s. 5 7Section 5. 34.10 of the statutes is amended to read:
AB898,9,10 834.10 Reorganization and stabilization of financial institutions.
9Whenever the office of credit unions, administrator of federal credit unions, U.S.
10comptroller of the currency, federal home loan bank board, U.S. office of thrift
11supervision, federal deposit insurance corporation, resolution trust corporation,
12division of banking or division of savings and loan institutions has taken charge of
13a credit union, bank, savings bank or savings and loan association with a view of
14restoring its solvency, pursuant to law, or with a view of stabilizing and readjusting
15the structure of any national or state credit union, bank, savings bank or savings and
16loan association located in this state, and has approved a reorganization plan or a
17stabilization and readjustment agreement entered into between the credit union,
18bank, savings bank or savings and loan association and depositors and unsecured
19creditors, or when a credit union, bank, savings bank or savings and loan association,
20with the approval of the office of credit unions, administrator of federal credit unions,
21U.S. comptroller of the currency, federal home loan bank board, U.S. office of thrift
22supervision, federal deposit insurance corporation, resolution trust corporation,
23division of banking or division of savings and loan institutions proposes to sell its
24assets to another credit union, bank, savings bank or savings and loan association
25which agrees to assume a part or all of the deposit liability of such selling credit

1union, bank, savings bank or savings and loan association and to pay the same on
2a deferred payment basis, the governing board of the public depositor may, on the
3approval of the division of banking, join in the execution of any reorganization plan,
4or any stabilization and readjustment agreement, or any depositor's agreement
5relative to a proposed sale of assets if, in its judgment and that of the division of
6banking, the reorganization plan or stabilization and readjustment agreement or
7proposed sale of assets is in the best interest of all persons concerned. The joining
8in any reorganization plan, or any stabilization and readjustment agreement, or any
9proposed sale of assets which meets the approval of the division of banking does not
10waive any rights under this chapter.
AB898, s. 6 11Section 6. 138.052 (5) (am) 2. a. of the statutes is amended to read:
AB898,9,1912 138.052 (5) (am) 2. a. On January 1, 1994, and annually thereafter, the division
13of banking for banks, the division of savings and loan institutions for savings and
14loan associations and savings banks and the office of credit unions for credit unions
15shall determine the interest rate that is the average of the interest rates paid,
16rounded to the nearest one-hundredth of a percent, on regular passbook deposit
17accounts by institutions under the division's or office's jurisdiction at the close of the
18last quarterly reporting period that ended at least 30 days before the determination
19is made.
AB898, s. 7 20Section 7. 138.052 (5) (am) 2. b. of the statutes is amended to read:
AB898,9,2421 138.052 (5) (am) 2. b. The office of credit unions and the division of banking
22shall report the rate calculated to the division of savings and loan institutions within
235 days after the date on which the determination is made. The division of savings
24and loan institutions shall calculate the average, rounded to the nearest

1one-hundredth of a percent, of the 3 rates and report that interest rate to the revisor
2of statutes within 5 days after the date on which the determination is made.
AB898, s. 8 3Section 8. 138.055 (4) (a) of the statutes is amended to read:
AB898,10,54 138.055 (4) (a) The division of savings and loan institutions, if the lender is a
5savings and loan association or savings bank;
AB898, s. 9 6Section 9. 138.056 (1) (a) 4. a. of the statutes is amended to read:
AB898,10,87 138.056 (1) (a) 4. a. The division of savings and loan institutions, if the lender
8is a savings and loan association or savings bank;
AB898, s. 10 9Section 10. 138.12 (5) (a) of the statutes is amended to read:
AB898,10,1210 138.12 (5) (a) The commissioner division may revoke or suspend the license of
11any insurance premium finance company if the commissioner division finds that any
12of the following
:
AB898,10,1313 1. Any license issued to such company was obtained by fraud,.
AB898,10,1414 2. There was any misrepresentation in the application for the license ,.
AB898,10,1615 3. The holder of such license has otherwise shown himself or herself
16untrustworthy or incompetent to act as a premium finance company,.
AB898,10,1717 4. Such The company has violated any provision of this section, or.
AB898,10,2118 5. Such The company has been rebating part of the service charge as allowed
19and permitted herein to any insurance agent or insurance broker or any employe of
20an insurance agent or insurance broker or to any other person as an inducement to
21the financing of any insurance policy with the premium finance company.
AB898, s. 11 22Section 11. 214.01 (1) (im) of the statutes is amended to read:
AB898,10,2323 214.01 (1) (im) "Division" means the division of savings and loan institutions.
AB898, s. 12 24Section 12. 214.592 of the statutes is amended to read:
AB898,11,4
1214.592 Financially related services tie-ins. In any transaction conducted
2by a savings bank, a savings bank holding company or a subsidiary of either with a
3customer who is also a customer of any other subsidiary of any of them, the customer
4shall be given a notice in 12-point boldface type in substantially the following form:
AB898,11,55 NOTICE OF RELATIONSHIP
AB898,11,106 This company, .... (insert name and address of savings bank, savings bank
7holding company or subsidiary), is related to .... (insert name and address of savings
8bank, savings bank holding company or subsidiary) of which you are also a customer.
9You may not be compelled to buy any product or service from either of the above
10companies or any other related company in order to participate in this transaction.
AB898,11,1511 If you feel that you have been compelled to buy any product or service from
12either of the above companies or any other related company in order to participate
13in this transaction, you should contact the management of either of the above
14companies at either of the above addresses or the division of savings and loan
15institutions at .... (insert address).
AB898, s. 13 16Section 13. 215.01 (6) of the statutes is amended to read:
AB898,11,1717 215.01 (6) "Division" means the division of savings and loan institutions.
AB898, s. 14 18Section 14. 215.02 (title) of the statutes is amended to read:
AB898,11,19 19215.02 (title) Division of savings and loan institutions.
AB898, s. 15 20Section 15. 215.141 of the statutes is amended to read:
AB898,11,25 21215.141 Financially related services tie-ins. In any transaction conducted
22by an association, a savings and loan holding company or a subsidiary of either with
23a customer who is also a customer of any other subsidiary of any of them, the
24customer shall be given a notice in 12-point boldface type in substantially the
25following form:
AB898,12,1
1NOTICE OF RELATIONSHIP
AB898,12,72 This company, ..... (insert name and address of association, savings and loan
3holding company or subsidiary), is related to ..... (insert name and address of
4association, savings and loan holding company or subsidiary) of which you are also
5a customer. You may not be compelled to buy any product or service from either of
6the above companies or any other related company in order to participate in this
7transaction.
AB898,12,128 If you feel that you have been compelled to buy any product or service from
9either of the above companies or any other related company in order to participate
10in this transaction, you should contact the management of either of the above
11companies at either of the above addresses or the division of savings and loan
12institutions at .... (insert address).
AB898, s. 16 13Section 16. 220.04 (9) (a) 2. of the statutes is amended to read:
AB898,12,1614 220.04 (9) (a) 2. "Regulated entity" means a bank, universal bank, trust
15company bank and any other entity which is described in s. 220.02 (2) or 221.0526
16as under the supervision and control of the division.
AB898, s. 17 17Section 17. 221.0303 (2) of the statutes, as affected by 1997 Wisconsin Act 27,
18is amended to read:
AB898,13,1019 221.0303 (2) Operation and acquisition of customer bank communications
20terminals.
A bank may, directly or indirectly, acquire, place and operate, or
21participate in the acquisition, placement and operation of, at locations other than its
22main or branch offices, customer bank communications terminals, in accordance
23with rules established by the division. The rules of the division shall provide that
24any such customer bank communications terminal shall be available for use, on a
25nondiscriminatory basis, by any state or national bank and by all customers

1designated by a bank using the terminal. This subsection does not authorize a bank
2which has its principal place of business outside this state to conduct banking
3business in this state. The customer bank communications terminals also shall be
4available for use, on a nondiscriminatory basis, by any credit union, savings and loan
5association or savings bank, if the credit union, savings and loan association or
6savings bank requests to share its use, subject to rules jointly established by the
7division of banking, the office of credit unions and the division of savings and loan
8institutions. The division by order may authorize the installation and operation of
9a customer bank communications terminal in a mobile facility, after notice and
10hearing upon the proposed service stops of the mobile facility.
AB898, s. 18 11Section 18. 221.0321 (5) of the statutes, as affected by 1997 Wisconsin Act 35,
12is amended to read:
AB898,13,2113 221.0321 (5) Certain secured loans. A bank may make loans secured by
14assignment or transfer of stock certificates or other evidence of the borrower's
15ownership interest in a corporation formed for the cooperative ownership of real
16estate. Sections 846.10 and 846.101, as they apply to a foreclosure of a mortgage
17involving a one-family residence, apply to a proceeding to enforce the lender's rights
18in security given for a loan under this subsection. The division shall promulgate joint
19rules with the office of credit unions and the division of savings and loan institutions
20that establish procedures for enforcing a lender's rights in security given for a loan
21under this subsection.
AB898, s. 19 22Section 19. Chapter 222 of the statutes is created to read:
AB898,13,2423 CHAPTER 222
24 UNIVERSAL BANKS
AB898,14,2
1Subchapter I
2 General Provisions
AB898,14,4 3222.0101 Title. This chapter may be cited as the "Wisconsin universal bank
4law".
AB898,14,5 5222.0102 Definitions. In this chapter:
AB898,14,6 6(1) "Adequately capitalized" has the meaning given in 12 USC 1831o (b) (1) (B).
AB898,14,9 7(2) "Capital" of a universal bank means the sum of the following, less the
8amount of intangible assets that is not considered to be qualifying capital by a deposit
9insurance corporation or the division:
AB898,14,1410 (a) For a universal bank organized as a stock organization, the universal bank's
11capital stock, preferred stock, undivided profits, surplus, outstanding notes and
12debentures approved by the division, other forms of capital designated as capital by
13the division and other forms of capital considered to be qualifying capital of the
14universal bank by a deposit insurance corporation.
AB898,14,1915 (b) For a universal bank organized as a mutual organization, the universal
16bank's net worth, undivided profits, surplus, outstanding notes and debentures
17approved by the division, other forms of capital designated as capital by the division
18and other forms of capital considered to be qualifying capital by a deposit insurance
19corporation.
AB898,14,23 20(3) "Deposit insurance corporation" means the Federal Deposit Insurance
21Corporation or other instrumentality of, or corporation chartered by, the United
22States that insures deposits of financial institutions and that is supported by the full
23faith and credit of the U.S. government as stated in a congressional resolution.
AB898,14,24 24(4) "Division" means the division of banking.
AB898,15,3
1(5) "Financial institution" means a state savings bank organized under ch. 214,
2state savings and loan association organized under ch. 215 or a state bank chartered
3under ch. 221.
AB898,15,5 4(6) "Universal bank" means a financial institution that has been issued a
5certificate of authority under s. 222.0205.
AB898,15,6 6(7) "Well-capitalized" has the meaning given in 12 USC 1831o (b) (1) (A).
AB898,15,11 7222.0103 Applicability. (1) Savings banks. A universal bank that is a savings
8bank organized under ch. 214 remains subject to all of the requirements, duties and
9liabilities, and may exercise all of the powers, of a savings bank, except that in the
10event of a conflict between this chapter and those requirements, duties, liabilities or
11powers, this chapter shall control.
AB898,15,16 12(2) Savings and loan associations. A universal bank that is a savings and loan
13association organized under ch. 215 remains subject to all of the requirements,
14duties and liabilities, and may exercise all of the powers, of a savings and loan
15association, except that, in the event of a conflict between this chapter and those
16requirements, duties, liabilities or powers, this chapter shall control.
AB898,15,20 17(3) Banks. A universal bank that is a bank chartered under ch. 221 remains
18subject to all of the requirements, duties and liabilities, and may exercise all of the
19powers, of a bank, except that, in the event of a conflict between this chapter and
20these requirements, duties, liabilities or powers, this chapter shall control.
AB898,15,23 21222.0105 Fees. The division may establish such fees as it determines are
22appropriate for documents filed with the division under this chapter and for services
23provided by the division under this chapter.
AB898,15,25 24222.0107 Administration. (1) Powers of division. The division shall
25administer this chapter for all universal banks.
AB898,16,5
1(2) Rule-making authority. The division may promulgate rules to administer
2and carry out this chapter. The division may establish additional limits or
3requirements on universal banks, if the division determines that the limits or
4requirements are necessary for the protection of depositors, members, investors or
5the public.
AB898,16,76 SUBCHAPTER II
7 Certification
AB898,16,12 8222.0201 Procedure. (1) Application. A financial institution may apply to
9become certified as a universal bank by filing a written application with the division.
10The application shall include such information as the division may require. The
11application shall be on such forms and in accordance with such procedures as the
12division may prescribe.
AB898,16,16 13(2) Review by division. An application submitted to the division shall either
14be approved or disapproved by the division in writing within 60 days after its
15submission to the division. The division and the financial institution may mutually
16agree to extend the application period for an additional period of 60 days.
AB898,16,19 17222.0203 Eligibility. (1) Requirements. The division shall approve an
18application for certification as a universal bank, if the applying financial institution
19meets all of the following requirements:
AB898,16,2220 (a) The financial institution is chartered or organized, and regulated, under ch.
21214, 215 or 221 and has been in existence and continuous operation for a minimum
22of 3 years prior to the date of the application.
AB898,16,2323 (b) The financial institution is well-capitalized or adequately capitalized.
AB898,17,324 (c) The financial institution does not exhibit a combination of financial,
25managerial, operational and compliance weaknesses that is moderately severe or

1unsatisfactory, as determined by the division based upon the division's assessment
2of the financial institution's capital adequacy, asset quality, management capability,
3earnings quantity and quality, adequacy of liquidity, and sensitivity to market risk.
AB898,17,74 (d) During the 12-month period prior to the application, the financial
5institution has not been the subject of an enforcement action and there is no
6enforcement action pending against the financial institution by any state or federal
7financial institution regulatory agency, including the division.
Loading...
Loading...