It is the intent of sub. (2)
to give the division jurisdiction to enforce and carry out all laws relating to banks or banking in this state, including those relating to state banks, savings banks, savings and loan associations, and trust company banks, and also all laws relating to small loan companies or other loan companies or agencies, finance companies, insurance premium finance companies, motor vehicle dealers, adjustment service companies, community currency exchanges, mortgage bankers, mortgage loan originators, mortgage brokers, and collection agencies and those relating to sellers of checks under ch. 217
, whether doing business as corporations, individuals, or otherwise, but to exclude laws relating to credit unions.
The banking review board shall advise the division and others in respect to improvement in the condition and service of banks and banking business in this state and shall review the acts and decisions of the division with respect to banks, except for such acts and decisions of the division under chs. 138
, and shall perform such other review functions in relation to banking as are provided by law. The banking review board may require the division to submit any of the division's actions to it for its approval. The board may make rules of procedure as provided in ch. 227
Each member of the board and all employees of the board shall, with respect to the disclosure of information concerning banks, be subject to the same requirements and penalties as the employees of the division.
The banking review board may make rules and regulations to safeguard the interest of depositors and stockholders generally in emergencies.
Any bank whose assets, upon the basis of a fair valuation, are equal to or in excess of its liabilities exclusive of capital stock, preferred stock, capital notes and debentures, shall be deemed to be safe and solvent. The banking review board may prescribe schedules, rules and regulations for arriving at a fair valuation of various classes of assets of banks.
See also ch. DFI-Bkg 10
, Wis. adm. code.
The remedy under sub. (3) is exclusive when contested issues of public interest and constitutionality could have been remedied on administrative review. First National Bank of Wisconsin Rapids v. M & I Peoples Bank of Coloma, 82 Wis. 2d 529
, 263 N.W.2d 196
Powers of division. 220.04(1)(a)(a)
The division shall examine at least once every 18 months the cash, bills, collaterals, securities, assets, books of account, condition and affairs of each bank and trust company bank doing business in this state, except national banks. For that purpose the division may examine on oath any of the officers, agents, directors, clerks, stockholders, customers or depositors thereof, touching the affairs and business of such institution. In making such examinations of banks, the division shall determine the fair valuation of all assets in accordance with the schedules, rules and regulations prescribed by the banking review board.
In lieu of any examination required to be made by the division, the division may accept any examination that may have been made of any bank or trust company bank within a reasonable period by a bank supervisory agency, as defined in s. 221.0901 (2) (d)
, if a copy of the examination is furnished to the division.
The division may, in the performance of official duties, issue subpoenas and administer oaths. In case of any refusal to obey a subpoena issued by the division, the refusal shall be reported at once to the circuit court of the circuit in which the bank is located. The court shall enforce obedience to the subpoena in the manner provided by law for enforcing obedience to subpoenas of the court.
Whenever the division is of the opinion that the loaning, investing or other banking policies or practices of any officer or director of any bank have been prejudicial to the best interests of such bank or its depositors, or that such policies or practices, if put into operation or continued, will endanger the safety or solvency of said bank or impair the interests of its depositors, the division may, with the approval of the banking review board, request the removal of such officer or director. Such request shall be served on the bank and on such officer or director in the manner provided by law for serving a summons in a court of record or shall be transmitted to said bank and officer or director by registered mail with return receipt requested. If such request for removal is not complied with within a reasonable time fixed by the division, the division may by order, with like approval of the banking review board, remove such officer or director, but no order of removal shall be entered until after an opportunity for hearing before the banking review board is given to such officer or director upon not less than 10 days' notice. An order of removal shall take effect as of the date issued. A copy of such order shall be served upon the bank and upon such officer or director in the manner provided by law for service of a summons in a court of record or by mailing such copy to the bank or officer or director at the bank's or officer's or director's last-known post-office address. Any removal under this subsection shall be effective in all respects the same as if made by the board of directors or stockholders of said bank. Any officer or director removed from office under the provisions of this subsection shall not be reelected as an officer or director of any bank without the approval of the division and the banking review board. An order of removal under this subsection shall be deemed a final order or determination of the banking review board within the meaning and contemplation of s. 220.035 (3)
The division, in connection with the liquidation of any bank or banking corporation or when called upon to approve any plan of reorganization and stabilization thereof or when the division is satisfied the interests of the depositors and creditors in assets held under any trust arrangement so require in connection with such reorganization and stabilization, may cause the bank or banking corporation or trust to be audited. The expense of the audit shall, upon the certificate of the division, be refunded forthwith to the division by the bank, banking corporation or the trustees out of the assets of the bank, banking corporation or trust. Such charges shall be a preferred claim against the assets.
The division, with the approval of the banking review board, may establish uniform savings rules which shall be adopted by every bank and trust company bank. Such rules may provide the conditions under which banks or trust company banks may accept deposits.
In times of financial distress, the commissioner with the approval of the banking review board may by order restrict the withdrawal of any class of deposits in any bank or trust company bank. The pendency of any proceeding for review of such order shall not stay or suspend the operation of such order.
The division, with the approval of the banking review board, may establish rules regulating the kind and amount of foreign bonds or bonds and securities offered for sale by the international bank for reconstruction and development, the inter-American development bank, the international finance corporation, the African development bank and the Asian development bank which state banks and trust company banks may purchase, except that such rules shall not apply to bonds and securities of the Canadian government and Canadian provinces, which are payable in American funds.
"Fiduciary property" means that property held by an organization as trustee or in any fiduciary capacity requiring the issuance of letters by a court or probate registrar in this state.
Require the organization to maintain separate books of account for its fiduciary operations and to maintain fiduciary property separate from the property of the organization.
"Regulated entity" means a bank, universal bank, trust company bank, and any other entity that is described in s. 220.02 (2)
as under the supervision and control of the division.
The regulated entity is being operated in an unsafe or unsound manner.
If the division finds that a violation or practice described in par. (b)
is likely to cause insolvency or substantial dissipation of assets or earnings of the regulated entity or seriously prejudice the interests of its depositors, the division may issue a temporary order requiring the official or regulated entity named in the notice of hearing to cease and desist from the violation or practice and to take affirmative action to prevent insolvency, dissipation of assets or earnings or prejudice to depositors pending completion of the proceedings. The temporary order is effective upon service on the official or regulated entity named in the notice of hearing and remains effective and enforceable pending completion of the administrative proceedings unless suspended, set aside or limited by a court as provided in subd. 2.
Within 20 days after an official or regulated entity is served with a temporary order under subd. 1.
, the official or regulated entity may apply to the circuit court for the county within which the regulated entity is located for an injunction setting aside, limiting or suspending the enforcement of the order pending the completion of the administrative proceeding.
As part of an order issued under par. (d)
, the division may impose a forfeiture of up to $10,000 for each violation or practice under par. (b)
An official or regulated entity who violates an order issued under par. (d)
shall, for each violation, forfeit not more than $1,000 per day for each day the violation continues. Assessment of a forfeiture under this subdivision shall commence on the latest of 10 days after the date of delivery of the order or, if an appeal is taken under s. 220.035
, 10 days after the date of the decision of the banking review board.
As a result of the practice or violation the regulated entity has suffered or will probably suffer substantial financial loss or other damage.
If it appears to the division that a person has engaged or is about to engage in an act or practice constituting a violation of the laws of this state relating to banks and banking, including this chapter, chs. 217
and ss. 138.09
, and 138.14
, or a rule promulgated or order issued under those laws, the division may bring an action in the name of the state in the circuit court of the appropriate county to enjoin the acts or practices and to enforce compliance with the laws, rules or orders, or the division may refer the matter to the district attorney of the appropriate county or, if the alleged violation may be enforced by the attorney general under sub. (12)
or s. 220.12
or 224.06 (7)
or is statewide in nature, to the attorney general. Upon a proper showing, the court may grant a permanent or temporary injunction or restraining order, appoint a receiver for the defendant or the defendant's assets or order rescission of any acts determined to be unlawful. The court may not require the division to post a bond.
In order to carry out ss. 220.07
, the division may commence and maintain in the division's name any and all actions necessary or proper to enforce any of said sections.
See also ch. DFI-Bkg 11
, Wis. adm. code.
On or before July 15 of each year, each state bank and trust company bank shall pay to the division an annual assessment for the maintenance of the functions of the division in an amount to be determined by the banking review board, but which shall not exceed 8 cents per $1,000 of resources, or part thereof, for the first $5,000,000 and shall not exceed 6 cents per $1,000, or part thereof, for all resources over $5,000,000.
Whenever in the judgment of the division, the condition or conduct of any bank renders it necessary or expedient to make an extra examination or to devote any extraordinary attention to its affairs, the division shall have the authority to make any and all necessary extra examinations and audits or partial audits and to devote any necessary attention to the conduct of its affairs; and such bank shall pay for each additional examination, and for each audit or partial audit, the actual cost thereof. Where an audit or partial audit is ordered, the actual reasonable cost of auditors shall be charged. Before directing any examination in excess of 2 or any audit or partial audit, the division shall examine the audits and examinations of any clearing house association as to the bank in question which may be furnished to it and shall avoid duplication of examinations, audits or partial audits wherever reasonably possible. In case of audits or partial audits for which a charge may be made under the provisions of this section, the division shall promptly send a copy to the bank and the bank shall pay the reasonable cost thereof. When the division delivers to a bank a copy of any examination, audit or partial audit, the division may by letter accompanying same require the bank to have the receipt of same acknowledged in the record of the next meeting of directors of the bank and may require that there be sent to the division a certified copy of action by the directors showing that all the directors of the bank have read said copy and are familiar with its contents and have signed a statement to such effect on the copy received by the bank and may require that a duplicate of such signed statement signed by all directors to be sent to the division to be attached to and filed with the original of such examination, audit or partial audit on file with the division. Failure of the bank or its board of directors or any of them to comply with any such order or direction of the division within a reasonable time fixed by it shall be sufficient ground for the taking of possession of said bank by the division and liquidating said bank under s. 220.08
The cost to be paid under par. (a)
shall include a fair charge for time of assistants and office overhead. The cost shall be determined by the division within a reasonable time after each examination has been completed. A statement of the charge determined by the division shall be promptly sent to the bank or trust company. Each bank or trust company shall pay the charge within 10 days after receipt of the statement. The cost determined under this subsection shall include the cost of furnishing a copy of the statement to the bank or trust company.
Not to disclose information. 220.06(1m)
No division employee may examine a bank or licensee in which that person is interested as a stockholder, officer or employee. No division employee may examine a bank or licensee located in the same village, city or county with any bank or licensee in which that person is so interested. Employees in the division, and each member and employee of the banking review board, shall keep secret all facts and information obtained in the course of examinations or from reports not under s. 221.1002 (1)
filed by a bank or licensee with the division, except so far as the public duty of the person requires reporting upon or taking special action regarding the affairs of any bank or licensee, and except when called as a witness in any criminal proceeding or trial in a court of justice. The division may furnish to the federal deposit insurance corporation or to any regulatory authority for state or federal financial institutions, insurance or securities a copy of any examination made of any such bank or licensee or of any report made by such bank or licensee and may give access to and disclose to the corporation or to any regulatory authority for state or federal financial institutions, insurance or securities any information possessed by the division with reference to the conditions or affairs of any such insured bank or licensee if the regulatory authority agrees to treat all information received with the same degree of confidentiality as applies to reports of examination that are in the custody of the division.
Officers and employees of a bank or licensee may not redisclose information in the examination reports. A person violating this paragraph may be fined not less than $100 nor more than $1,000 or imprisoned not more than 6 months or both.
Employees of the division shall not be subject to any civil liability or penalty, nor to any criminal prosecution, for any error in judgment or discretion made in good faith and upon reasonable grounds in any action taken or omitted by the division in the division's official capacity under the provisions of chs. 220
History: 1991 a. 316
; 1995 a. 27
Banks; impairment of capital. 220.07(1)
Capital impaired; deficiency.
Whenever the division determines that the capital of any bank is impaired or reduced below the amount required by law or the articles of incorporation, or below the amount certified to the division as paid in, the division may require such bank to make good such impairment or deficiency within 60 days after the date of such requisition. In any case, where the capital of a bank becomes impaired or reduced below the amount required by law or the articles of incorporation, the board of directors of such bank may make a proportional assessment upon all of the stock of the bank to make good such deficiency, and may provide that the amount of such deficiency shall be due and payable at a time to be fixed by such board of directors, which time shall be not less than 10 days after notice of the assessment. Notice to stockholders residing in another state shall be given by registered mail and a return receipt demanded. If any stockholder fails or neglects to pay the amount of the assessment against his or her stock for 10 days after the assessment becomes due and payable, the directors of the bank may offer the stock for sale, and sell the stock at public sale upon 10 days' notice to be given by posting copies of the notice of sale in 5 public places in the town, village or city where the bank is located. Upon the sale, the purchaser shall forthwith pay the amount of the assessment against the stock. The amount received from the sale of the stock, less the cost and expenses of the sale, shall be paid to the original owner of the stock.
Delinquent banks; division may take possession. 220.08(2)
On taking possession of the property and business of any such bank or banking corporation, the division shall forthwith give notice of such fact to any and all banks or banking corporations holding or in possession of any assets of such bank or banking corporation. No bank or banking corporation knowing of such taking possession by the division, or notified as aforesaid, shall have a lien or charge for any payment, or advance, thereafter made, or liability thereafter incurred, against any of the assets of the bank or banking corporation of whose property and business the division shall have taken possession as aforesaid, except that all drafts issued and delivered against existing balances on deposit in any drawee banks or banking corporations shall be paid on presentation, if they correspond by number and amount to a list to be certified to them by the division, and if there be insufficient funds in deposit such drafts shall be preferred claims. Such bank or banking corporation may, with the consent of the division, resume business upon such conditions as may be approved by the division.
The division shall give notice, in such newspapers as the division may direct, by publication of a class 3 notice, under ch. 985
, calling on all persons who may have claims against such bank or banking corporation, to present the same to the division, within 3 months after the date of first insertion. Such notice shall also fix a place and time (not less than 3 months after the date of first insertion) to make legal proof thereof. The division shall mail a similar notice to all persons whose names appear as creditors upon the books of the bank or banking corporation. Any creditor of such bank or banking corporation holding security of any nature, shall file a claim as a general creditor only for the amount by which the debt exceeds the value of such security. The value of said security and the amount to be allowed on the claim so filed shall, upon application of such creditor or the division and upon at least 20 days' notice to the opposing party, be determined by the circuit court of the county wherein such bank or banking corporation is located. If the division doubts the justice and validity of any claim, the division may reject the same, and serve notice of such rejection upon the claimant either by mail or personally. An affidavit of the service of such notice, which shall be prima facie evidence thereof, shall be filed with the division. An action upon a claim so rejected must be brought within 6 months after such service. Claims presented after the expiration of the time fixed in the notice to creditors shall be entitled to receive only liquidating dividends declared after presentation, unless otherwise ordered by the court.
Upon taking possession of the property and assets of such bank or banking corporation, the division shall make an inventory of the assets of such bank or banking corporation, in duplicate, one to be filed with the division, and one in the office of the clerk of circuit court for the county in which such bank or banking corporation is located; upon the expiration of the time fixed for the presentation of claims, the division shall make in duplicate a full and complete list of the claims presented, including and specifying such claims as have been rejected by it, one to be filed with the division, and one in the office of the clerk of circuit court for the county in which such bank or banking corporation is located. Such inventory and list of claims shall be open at all reasonable times to inspection.
Whenever any such bank or banking corporation, of whose property and business the division has taken possession, as aforesaid, deems itself aggrieved thereby, it may, at any time within 10 days after such taking possession, apply to the circuit court for the county in which such bank or banking corporation is located to enjoin further proceedings; and said court, after citing the division to show cause why further proceedings should not be enjoined and hearing the allegations and proofs of the parties and determining the facts may, upon the merits dismiss such application or enjoin the division from further proceedings, and direct the division to surrender such business and property to such bank or banking corporation. Said bank or banking corporation may, if it desires so to do, within 10 days after taking possession apply to the banking review board to review the action of the division in taking possession. The banking review board shall act speedily on such application. Within 10 days after notice of the decision of the banking review board, said bank or banking corporation may apply to said circuit court of the county in which such bank or banking corporation is located to enjoin further proceedings. The proceedings on such application shall be on notice to the division and shall be the same as where the application to the court is made as above provided without application to the review board.
Whenever the division has paid to every depositor and creditor of such bank or banking corporation (not including stockholders), whose claims as such creditor or depositor have been duly proved and allowed, the full amount of such claims, and has made proper provision for unclaimed and unpaid deposits or dividends, and has paid all the expenses of the liquidation, the division shall call a meeting of the stockholders of such bank or banking corporation by giving notice thereof by certified mail and by publication of a class 2 notice, under ch. 985
, in the county where such bank or banking corporation is located. At such meeting the stockholders shall determine whether the division shall be continued as liquidator and shall wind up the affairs of such bank or banking corporation, or whether an agent or agents shall be elected for that purpose, and in so determining the said stockholders shall vote by ballot, in person or by proxy, each share of stock entitling the holder to one vote, and the majority of the stock shall be necessary to a determination.
Such agent or agents shall convert the assets coming into the agent's or agents' possession into cash, and shall account for and make distribution of the property of said bank or banking corporation, as is herein provided in the case of distribution by the division, except that the expenses thereof shall be subject to the direction and control of the circuit court. In case of the death, removal, or refusal to act of any such agent or agents, the stockholders, on the same notice, to be given by the division upon proof of such death, removal, or refusal to act being filed with it, and by the same vote hereinbefore provided, may elect a successor, who shall have the same powers and be subject to the same liabilities and duties as the agent originally elected.
The division shall deposit dividends and unclaimed deposits which have been provided for and which remain unpaid in the hands of the division for 6 months after the order for final distribution in one or more state banks, to the credit of the division, in trust for the several depositors with and creditors of the liquidated bank or banking corporations from which they were received. The division's annual report under s. 220.14
shall include the names of banks or banking corporations so taken possession of and liquidated and the sums of unclaimed and unpaid deposits or dividends with respect to each of them respectively.
The division may pay the moneys held by the division to the persons entitled to them, upon being furnished satisfactory evidence of their right to the same. In cases of doubt or conflicting claims, the division may require an order of the circuit court authorizing and directing the payment thereof. The division may apply the interest earned towards defraying the expenses in the payment and distribution of such unclaimed deposits or dividends to the depositors and creditors entitled to receive them, and if necessary may draw on the fund to defray such expenses. After one year from the time of the order for final distribution, the division shall report and deliver all unclaimed funds to the secretary of revenue as provided in ch. 177
. All claims subsequently arising shall be presented to the division. If the division determines that any claim should be allowed, the division shall certify to the department of administration the name and address of the person entitled to payment and the amount thereof and shall attach the claim to the certificate. The secretary of administration shall certify the claim to the secretary of revenue for payment.
Whenever the division is informed, within 10 days after the division has taken charge of a bank pursuant to law, that a plan for the reorganization of such bank is being considered, the division may refrain from complying with any or all of the provisions of this section for such time as the division deems advisable, but for not more than 40 days after the division has taken charge of said bank. The approval by the division and the acceptance by the depositors and unsecured creditors of a reorganization plan within the time specified as provided in sub. (15)
, shall operate to relieve the division of the duties and liabilities provided by this section in the case of liquidation of banks.
History: 1983 a. 408
; 1985 a. 127
; Sup. Ct. Order, 136 Wis. 2d xi (1987); 1991 a. 316
; 1995 a. 27
; 2009 a. 177
; 2013 a. 20
In the event said federal deposit insurance corporation shall accept the appointment as such receiver, it is hereby authorized and empowered to be and act without bond as such receiver.
Upon the acceptance of the appointment as receiver of any delinquent bank by said federal deposit insurance corporation, the possession of and title to all the assets, business and property of such bank of every kind and nature shall pass to and vest in said corporation without the execution of any instruments of conveyance, assignment, transfer or endorsement.
History: 1995 a. 27
History: 1995 a. 27
Indemnity fund, national bank.
Every national bank which has authority under federal law to act in a fiduciary capacity shall comply with s. 223.02
History: 1995 a. 27
History: 1991 a. 316
; 1995 a. 27
History: 1991 a. 316
; 1995 a. 27
The division shall publish an annual report and submit the report to the governor and the chief clerk of each house of the legislature for distribution to the legislature under s. 13.172 (2)
. The report shall:
Contain a statement of the condition of every bank from which reports have been received, with an abstract of the whole amount of capital returned by them, the whole amount of their liabilities, the total amount of resources, and specifying the amount of lawful money held by banks at the time of their several returns.
Contain a statement of the banks whose business has been closed during the year, the amount of their resources and liabilities, the amount paid to the creditors thereof and a statement of any banks organized during the year.
Contain a statement of the total number of orders issued by the division during the year under s. 222.0203 (2)
Give such other information as the division deems necessary.
The consolidated bank or trust company shall succeed to all rights, obligations, relations, and trusts, and the duties and liabilities connected with the performance of fiduciary services, held by any bank or trust company party to the consolidation, and without further appointment shall act as trustee or personal representative or in any other fiduciary capacity in which any bank or trust company party to the consolidation was acting at the time of the consolidation.
The consolidated bank or trust company shall be entitled to be appointed or to act as trustee or personal representative or other fiduciary to the same extent and with the same effect as would any bank or trust company party to the consolidation if prior to the consolidation any bank or trust company party to the consolidation has been designated as trustee or any other fiduciary in any trust deed or other writing, or has been named to act as personal representative in any will.
Any state bank, trust company bank, licensee under ss. 138.09
, or 224.725
or ch. 217
may cause any or all records kept by such bank, licensee, or registered person to be recorded, copied or reproduced by any photostatic, photographic or miniature photographic process or by optical imaging if the process employed correctly, accurately and permanently copies, reproduces or forms a medium for copying, reproducing or recording the original record on a film or other durable material. A bank may thereafter dispose of the original record. A licensee or registered person may thereafter dispose of the original record after first obtaining the written consent of the division. This section is applicable to national banking associations insofar as it does not contravene federal law.
See also s. DFI-Bkg 9.01
, Wis. adm. code.
Closing in emergencies.
No liability shall be incurred by a bank because the bank is closed during an emergency. If a bank closes during an emergency, the closing shall be noted in the minutes of the next meeting of the bank's board of directors. A bank may not declare in default for nonpayment any obligation which became due while the bank was closed during the emergency if timely payment on the obligation was tendered but not accepted because the bank was closed.
"Subsidiary" of a bank holding company means any other corporation or limited liability company of which voting stock having a majority of the votes entitled to be cast is owned, directly or indirectly, by the bank holding company.
"Trust business" includes self-declared trusts that are established and maintained by a corporate fiduciary, such as common trust funds and group trust funds, and all other activities in which a corporate fiduciary is acting as a fiduciary, as defined in s. 112.01 (1) (b)
, regardless of whether or not a portion of these activities could be undertaken by an entity that is not authorized to accept and execute trusts in this state.
(2) Transfer to successor fiduciary.
If the board of directors of a bank holding company adopt a resolution directing one of its subsidiaries that is a corporate fiduciary to succeed to all or part of the existing or future trust business of another of its subsidiaries that is a corporate fiduciary, the successor corporate fiduciary shall succeed to the predecessor corporate fiduciary. The substitution shall be effective on the date specified in the resolution and no additional authorization is needed. The successor corporate fiduciary shall succeed to all capacities in which the predecessor corporate fiduciary had been acting with respect to the transferred trust business. If, or to the extent that, the resolution directs that one subsidiary shall succeed to future trust business of another subsidiary of the same bank holding company, the successor shall be considered to be named as fiduciary in all writings that named the predecessor corporate fiduciary as trustee, including all wills, trusts, court orders and similar documents and instruments.