Budget Change Items
1. STANDARD BUDGET ADJUSTMENTS
GPR $29,000
PR 6,000
Total $35,000
Governor: Adjust the agency's base budget by $14,500 GPR and $3,000 PR annually for: (a) full funding of salaries and fringe benefits ($11,700 GPR and -$500 PR); (b) full funding of financial service charge-backs ($100 GPR and $200 PR); and (c) reclassification of positions ($2,700 GPR and $3,300 PR).
2. INFORMATION TECHNOLOGY COSTS
GPR $27,000
PR 33,000
Total $60,000
Governor: Provide $13,500 GPR and $16,500 PR annually for information technology costs. The funds would be used as follows: (a) Website maintenance: $20,000 annually ($9,000 GPR and $11,000 PR) would be used to employ outside IT staff to maintain and upgrade the Ethics Board internet website (including the lobbyists-on-line information system), based on 200 hours of staff time annually at $100 per hour; and (b) Permanent property replacements: $10,000 annually ($4,500 GPR and $5,500 PR) as a general increase in base budget funding for unspecified permanent property replacements (primarily IT hardware and software and copying equipment).
3. INVESTIGATION COSTS
Governor: Modify current law to permit the Governor, upon request of the Ethics Board, to appoint special counsel to assist in investigating and prosecuting alleged violations of the state lobbying or ethics laws. Under current law, the Governor may authorize the employment of special counsel in the following situations: (a) to assist the Attorney General in any action; (b) to act instead of the Attorney General in any action if the Attorney General is adversely interested; (c) to defend any officer of the state from any action instituted by the Attorney General; and (d) to institute and prosecute any action for which the Attorney General deems it is his or her duty to defend rather than prosecute. When authorized by the Governor, a special counsel is paid from a GPR sum sufficient appropriation in the Department of Justice. The Governor is responsible for execution of a contract between the state and the appointed special counsel which sets the amount the special counsel is to be paid. No estimated increase in expenditures has been included in DOJ's special counsel appropriation for the new purpose of investigating and prosecuting violation of the state's lobbying or ethics laws.
[Bill Sections: 9 and 10]
FINANCIAL INSTITUTIONS
Budget Change Items
1. STANDARD BUDGET ADJUSTMENTS
PR - $232,000
Governor: Adjust the agency's base budget for: (a) turnover reductions (-$178,700 annually); (b) nonrecurring costs (-$282,300 annually); (c) full funding of salaries and fringe benefits ($281,500 annually); (d) financial services charge-backs ($4,300 annually); (e) reclassifications ($6,100 in 1999-00 and $7,600 in 2000-01); (f) fifth week of vacation as cash ($44,300 in 1999-00 and $46,800 in 2000-01); and (g) full funding of leases and directed move costs ($6,800 annually).
2. ADDITIONAL TECHNOLOGY INITIATIVES
PR $378,700
Governor: Provide $186,500 in 1999-01 and $192,200 in 2000-01 for additional technology initiatives. The recommendation would provide one-time financing to: (a) implement the statewide electronic forms initiative of the Department of Administration ($76,900 in 1999-00 and $79,800 in 2000-01); and (b) develop a shared system to provide administrative functions needed throughout the agency ($87,600 in 1999-00 and $48,800 in 2000-01). In addition, the recommendation would enable the Office of Credit Unions (OCU) to acquire computer equipment for OCU examination staff through the state’s master lease program ($22,000 in 1999-00 and $63,600 in 2000-01).
3. CREDIT UNION INDIRECT COSTS
PR $296,000
Governor: Provide $148,000 annually to cover indirect costs of the Office of Credit Unions for administrative, information technology and other services from the Department’s Administrative Services Division.
4. OPTICAL IMAGING PROJECT
PR $280,000
Governor: Provide one-time financing of $173,500 in 1999-00 and $106,500 in 2000-01 to continue the optical imaging project started in the Division of Banking and expand it to the Mortgage Banking Unit, the Licensed Financial Services Unit and the Division of Savings Institutions. Optical imaging electronically scans and stores documents, which allows each document to be retrieved more quickly and viewed simultaneously by multiple users. Funding includes $21,000 in 1999-00 for portable scanning stations and $15,000 in 2000-01 for network scanners. Other costs include $152,500 in 1999-00 and $91,500 in 2000-01 for training, software, monitors and other equipment.
5. CONVERSION OF PROJECT POSITION
Governor: Convert the policy initiatives advisor position from project to permanent status. There is no fiscal effect of this provision, as the position authority and permanent funding are currently in the agency's base. However, this provision would adjust the Personnel Management Information System to match the agency's base, correcting a previous error.
6. ACCESS FEES FOR COMPUTER DATABASES
Governor: Authorize the Department to charge members of the public a fee for accessing or using the Department's databases or computer systems.
DFI is modernizing its Uniform Commercial Code (UCC) lien filing system, which is a system to maintain a statewide database of all UCC filings. The UCC lien filing system contains filings of financial statements submitted by banks, credit unions, small businesses, service companies and other lending institutions. The Department anticipates increased interest on the part of such institutions in filing forms electronically. In addition, DFI expects growing interest by members of the public in accessing the Department's databases. This provision would authorize the Department to charge fees when providing such services to members of the public.
The administration did not include an estimate of the fiscal impact of this provision in the bill, as the specific fees and the costs of the services to be provided in conjunction with such fees have not been determined. However, DFI has estimated that additional program revenue from such fees could amount to $250,000 annually.
[Bill Sections: 2351 thru 2353]
7. NAME CHANGE FOR DIVISION OF SAVINGS AND LOAN
Governor: Change the name of the Division of Savings and Loan in the Department of Financial Institutions to the Division of Savings Institutions. Provide that any action taken by the Division of Savings and Loan between July 1, 1996, and the bill's general effective date under the name of the Division of Savings Institutions would have the same force and effect in all respects as if the action had been taken under the name of the Division of Savings and Loan.
[Bill Sections: 30, 222, 645, 884, 885, 2166 thru 2169, 2337 thru 2341, 2344, 2345, 2347 thru 2350, 2357 thru 2359, 2927, 3088 and 3243]
8. INSURANCE PREMIUM FINANCE COMPANY LICENSES
Governor: Provide that the Division of Banking in the Department of Financial Institutions, rather than the Commissioner of Insurance, would have the authority to revoke or suspend the license of an insurance premium finance company under the conditions specified in the statutes.
Currently, the Division of Banking is responsible for issuing licenses for insurance finance premium companies and for enforcing all state regulations relating to insurance premium finance companies, except that the Commissioner of Insurance is authorized to revoke or suspend the license of such a company. This provision would make the Division responsible for revoking or suspending the license of an insurance premium finance company, under the conditions specified in the statutes, thereby maintaining consistency in the authority of the Division with respect to regulation of such companies.
[Bill Section: 2170]
9. INTEREST RATE ON HOME MORTGAGE ESCROW ACCOUNTS
Governor: Clarify that the Division of Banking (DOB) must report information to the Division of Savings and Loan [whose name would change to the Division of Savings Institutions (DSI) under the bill] to be used in calculating the interest rate that must be paid on residential mortgage escrow accounts. Under current law, DSI calculates the interest rate for escrow accounts based on information regarding interest rates paid on passbook accounts provided by the Office of Credit Unions (OCU) and the Division of Banking. However, the current statutes do not specifically require DOB to provide this information to DSI.
[Bill Section: 2167]
10. UNIVERSAL BANKING
Governor: Authorize the Division of Banking (DOB) within the Department of Financial Institutions to certify savings banks, saving and loan associations and state banks as "universal banks" under the procedures and with the powers outlined below. Provide that a universal bank would be one of the regulated entities under the powers of supervision and control of DOB. The provisions relating to universal banks would be created in a new chapter of the statutes, and could be cited as the "Wisconsin universal bank law" (UB Law).
General Provisions
Under current law, the Division of Savings and Loan [whose name would change to the Division of Savings Institutions (DSI) under the bill] regulates savings banks and savings and loan associations. DOB regulates state banks. The powers and regulation of these financial institutions are specified in the statutes and vary by type of institution. The UB Law would allow such financial institutions organized under state statutes to apply to DOB to be certified as a universal bank. Certification as a universal bank would provide expanded powers when compared to those currently held by the individual financial institutions. Financial institutions certified as universal banks would remain subject to existing requirements, duties and liabilities and would retain their powers as savings banks, savings and loan associations or state banks, except that, in the event of a conflict between the UB Law and such requirements, duties, liabilities or powers, the UB Law would control.
The Division of Banking would be required to administer the UB Law for all universal banks and to establish such fees as it determined were appropriate for documents filed with the Division and for services provided by the Division. DOB would also be authorized to promulgate rules to carry out the UB Law and to establish additional limits or requirements on universal banks if it determined that the limits or requirements were necessary for the protection of depositors, members, investors or the public.
Certification
A state-chartered savings bank, savings and loan association or bank would be allowed to apply to become certified as a universal bank by filing a written application with DOB including such information as the Division required and on such forms and in accordance with such procedures as DOB prescribed. DOB would be required to approve or disapprove the application in writing within 60 days after its submission to the Division. However, DOB and the financial institution could mutually agree to extend the application period for an additional 60 days.
DOB would be required to approve an application for certification as a universal bank if the applying financial institution met all of the following requirements:
a. It was chartered or organized, and regulated, as a savings bank, savings and loan association or state bank under Wisconsin statutes and had been in existence and continuous operation for a minimum of three years prior to the date of the application.
b. It was "well-capitalized" or "adequately capitalized" as defined by federal law related to banks and banking.
c. It did not exhibit a combination of financial, managerial, operational and compliance weaknesses that were moderately severe or unsatisfactory, as determined by the Division based upon the Division's assessment of the financial institution's capital adequacy, asset quality, management capability, earnings quantity and quality, adequacy of liquidity and sensitivity to market risk.
d. During the 12-month period prior to the application, it had not been the subject of an enforcement action and had no enforcement action pending against it by any state or federal financial institution regulatory agency, including DOB.
For any period during which a universal bank failed to meet such requirements, the Division would be authorized to order limits or restrictions to the exercise of the powers of the universal bank under the UB Law.
