AB892: Bill Text

AB892,21,13 186.80 False statements. (a) No officer, director, or employee of a credit union may do any of the following:

AB892,21,15 1. Willfully and knowingly subscribe to or make, or cause to be made, a false statement or entry in the books of the credit union.

AB892,21,17 2. Knowingly subscribe to or exhibit false information with the intent to deceive any person authorized to examine the affairs of the credit union.

AB892,21,19 3. Knowingly make, state, or publish any false report or statement of the credit union.

AB892,21,21 (b) Any person who violates par. (a) may be fined not less than $1,000 nor more than $5,000, or imprisoned for not less than one year nor more than 15 years, or both.

AB892, s. 41 Section 41. 220.04 (9) (a) 2. of the statutes is amended to read:

AB892,21,25 220.04 (9) (a) 2. "Regulated entity" means a bank, universal bank, trust company bank, and any other entity which that is described in s. 220.02 (2) or 221.0526 as under the supervision and control of the division.

AB892, s. 42 Section 42. 220.14 (5) of the statutes is created to read:

AB892,22,3 220.14 (5) Contain a statement of the total number of orders issued by the division during the year under s. 222.0203 (2).

AB892, s. 43 Section 43. Chapter 222 of the statutes is created to read:

AB892,22,6 CHAPTER 222 UNIVERSAL BANKS

AB892,22,8 Subchapter I General Provisions

AB892,22,10 222.0101 Title. This chapter may be cited as the "Wisconsin universal bank law."

AB892,22,11 222.0102 Definitions. In this chapter:

AB892,22,14 (1) "Capital" of a universal bank means the sum of the following, less the amount of intangible assets that is not considered to be qualifying capital by a deposit insurance corporation or the division:

AB892,22,19 (a) For a universal bank organized as a stock organization, the universal bank's capital stock, preferred stock, undivided profits, surplus, outstanding notes and debentures approved by the division, other forms of capital designated as capital by the division, and other forms of capital considered to be qualifying capital of the universal bank by a deposit insurance corporation.

AB892,22,24 (b) For a universal bank organized as a mutual organization, the universal bank's net worth, undivided profits, surplus, outstanding notes and debentures approved by the division, other forms of capital designated as capital by the division, and other forms of capital considered to be qualifying capital by a deposit insurance corporation.

AB892,23,4 (2) "Deposit insurance corporation" means the Federal Deposit Insurance Corporation or other instrumentality of, or corporation chartered by, the United States that insures deposits of financial institutions and that is supported by the full faith and credit of the U.S. government as stated in a congressional resolution.

AB892,23,5 (3) "Division" means the division of banking.

AB892,23,8 (4) "Financial institution" means a state savings bank organized under ch. 214, state savings and loan association organized under ch. 215, or state bank chartered under ch. 221.

AB892,23,10 (5) "Universal bank" means a financial institution that has been issued a certificate of authority under s. 222.0205.

AB892,23,11 (6) "Well-capitalized" has the meaning given in 12 USC 1831o (b) (1) (A).

AB892,23,16 222.0103 Applicability. (1) Savings banks. A universal bank that is a savings bank organized under ch. 214 remains subject to all of the requirements, duties, and liabilities, and may exercise all of the powers, of a savings bank, except that, in the event of a conflict between this chapter and those requirements, duties, liabilities, or powers, this chapter shall control.

AB892,23,21 (2) Savings and loan associations. A universal bank that is a savings and loan association organized under ch. 215 remains subject to all of the requirements, duties, and liabilities, and may exercise all of the powers, of a savings and loan association, except that, in the event of a conflict between this chapter and those requirements, duties, liabilities, or powers, this chapter shall control.

AB892,23,25 (3) Banks. A universal bank that is a bank chartered under ch. 221 remains subject to all of the requirements, duties, and liabilities, and may exercise all of the powers, of a bank, except that, in the event of a conflict between this chapter and these requirements, duties, liabilities, or powers, this chapter shall control.

AB892,24,3 222.0105 Fees. The division may establish such fees as it determines are appropriate for documents filed with the division under this chapter and for services provided by the division under this chapter.

AB892,24,5 222.0107 Administration. (1) Powers of division. The division shall administer this chapter for all universal banks.

AB892,24,10 (2) Rule-making authority. The division may promulgate rules to administer and carry out this chapter. The division may establish additional limits or requirements on universal banks, if the division determines that the limits or requirements are necessary for the protection of depositors, members, investors, or the public.

AB892,24,12 SUBCHAPTER II Certification

AB892,24,17 222.0201 Procedure. (1) Application. A financial institution may apply to become certified as a universal bank by filing a written application with the division. The application shall include all information required by the division. The application shall be on the forms and in accordance with the procedures prescribed by the division.

AB892,24,23 (2) Review by division. An application submitted by a financial institution under sub. (1) shall either be approved or disapproved by the division, in writing, within 60 days after the date on which application is filed with the division. The division and the financial institution may mutually agree to extend the application period for an additional period of 60 days. The division shall approve an application if all of the applicable requirements under s. 222.0203 (1) are met.

AB892,25,3 222.0203 Eligibility. (1) Requirements. The division may approve an application from a financial institution for certification as a universal bank only if all of the following requirements are met:

AB892,25,6 (a) The financial institution is chartered or organized, and regulated, under ch. 214, 215, or 221 and has been in existence and continuous operation for a minimum of 3 years before the date of the application.

AB892,25,7 (b) The financial institution is well-capitalized.

AB892,25,12 (c) The financial institution does not exhibit a combination of financial, managerial, operational, and compliance weaknesses that is 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.

AB892,25,16 (d) During the 12-month period before the date of the application, the financial institution has not been the subject of an enforcement action, and there is no enforcement action pending against the financial institution by any state or federal financial institution regulatory agency, including the division.

AB892,25,21 (e) The most current evaluation prepared under 12 USC 2906 that the financial institution has received rates the financial institution as "outstanding" or "satisfactory" in helping to meet the credit needs of its entire community, including low-income and moderate-income neighborhoods, consistent with the safe and sound operation of the financial institution.

AB892,26,2 (f) If the financial institution has received from its federal functional regulator, as defined in 15 USC 6809 (2), a consumer compliance examination that contains information regarding the financial institution's compliance with 15 USC 6801 to 6803 and any applicable regulations prescribed under 15 USC 6804, the most recent such examination indicates, in the opinion of the division, that the financial institution is in substantial compliance with those statutes or regulations.

AB892,26,9 (2) Failure to maintain eligibility; limitation of authority and decertification. For any period during which a universal bank fails to meet the requirements under sub. (1), the division shall by order limit or restrict the exercise of the powers of the universal bank under this chapter. In addition to or lieu of limiting or restricting the universal bank's authority under this subsection, the division may by order revoke the universal bank's certificate of authority issued under s. 222.0205.

AB892,26,13 222.0205 Certificate of authority. Upon approval of an application for certification as a universal bank, the division shall issue to the applicant a certificate of authority stating that the financial institution is certified as a universal bank under this chapter.

AB892,26,22 222.0207 Voluntary termination of certification. A financial institution that is certified as a universal bank under this chapter may elect to terminate its certification by giving 60 days' prior written notice of the termination to the division. A termination under this section is effective only with the written approval of the division. A financial institution shall, as a condition to a termination under this section, terminate its exercise of all powers granted under this chapter before the termination of the certification. The division's written approval of a financial institution's termination under this section is void if the financial institution fails to satisfy the precondition to termination under this section.

AB892,26,24 SUBCHAPTER III ORGANIZATION

AB892,27,5 222.0301 Articles of incorporation and bylaws. A universal bank shall continue to operate under its articles of incorporation and bylaws as in effect prior to certification as a universal bank or as such articles or bylaws may be subsequently amended in accordance with the provisions of the chapter under which the universal bank was organized or chartered.

AB892,27,12 222.0303 Name. (1) Use of "bank." Notwithstanding ss. 214.035, 215.40 (1), and 215.60 (1) and subject to subs. (2) and (3) (b), a universal bank may use the word "bank" in its name, without having to include the word "savings." Notwithstanding ss. 215.40 (1) and 215.60 (1) and subject to subs. (2) and (3) (b), a universal bank that is organized under ch. 215 and that uses the word "bank" in its name in accordance with this section need not include the words "savings and loan association" or "savings association" in its name.

AB892,27,15 (2) Distinguishability. Except as provided in sub. (3), the name of the universal bank shall be distinguishable upon the records of the division from all of the following names:

AB892,27,17 (a) The name of every other financial institution organized under the laws of this state.

AB892,27,19 (b) The name of every national bank or foreign bank authorized to transact business in this state.

AB892,27,23 (3) Exceptions. (a) A universal bank may apply to the division for authority to use a name that does not meet the requirements under sub. (2). The division may authorize the use of the name if any of the conditions under s. 221.0403 (2) (a) or (b) is met.

AB892,28,3 (b) A universal bank may use a name that is used in this state by another financial institution or by an institution authorized to transact business in this state, if the universal bank has done any of the following:

AB892,28,4 1. Merged with the other institution.

AB892,28,5 2. Been formed by reorganization of the other institution.

AB892,28,7 3. Acquired all or substantially all of the assets, including the name, of the other institution.

AB892,28,10 222.0305 Capital and assets. (1) Capital requirements. Notwithstanding subch. VI of ch. 214 and ss. 215.24 and 221.0205, the division shall determine the minimum capital requirements of universal banks.

AB892,28,12 (2) Certain asset requirements. Section 214.045 does not apply to universal banks.

AB892,28,19 222.0307 Acquisitions, mergers, and asset purchases. (1) In general. A universal bank may, with the approval of the division, purchase the assets of, merge with, acquire, or be acquired by any other financial institution, universal bank, national bank, federally chartered savings bank, or savings and loan association, or by a holding company of any of these entities. Notwithstanding subch. III of ch. 214 and ss. 214.09 and 215.36, the approval of the division of savings and loan is not required.

AB892,28,23 (2) Applications for approval. An application for approval under sub. (1) shall be submitted on a form prescribed by the division and accompanied by a fee determined by the division. In processing and acting on applications under this section the division shall apply the following standards:

AB892,28,25 (a) For universal banks organized under ch. 214, ss. 214.09, 214.62 to 214.64, and 214.665, and subch. III of ch. 214.

AB892,29,2 (b) For universal banks organized under ch. 215, ss. 215.35, 215.36, 215.53, and 215.73.

AB892,29,3 (c) For universal banks chartered under ch. 221, subchs. VII and IX of ch. 221.

AB892,29,5 SUBCHAPTER IV POWERS

AB892,29,10 222.0401 Federal financial institution powers. (1) In general. (a) Powers exercised by universal bank. A universal bank, with the approval of the division, may exercise any power that may be directly exercised by a federally chartered savings bank, a federally chartered savings and loan association, or a federally chartered national bank.

AB892,29,15 (b) Powers exercised by subsidiary of universal bank. A universal bank, through a subsidiary and with the approval of the division, may exercise any power that a federally chartered savings bank, a federally chartered savings and loan association, or a federally chartered national bank may exercise through a subsidiary.

AB892,29,23 (2) Approval required for exercise of federal power. A universal bank shall file with the division a written request to exercise a power under sub. (1). The division shall determine whether the requested power is permitted under sub. (1). Within 60 days after receiving a request under this subsection, the division shall approve the request, if the power is permitted under sub. (1), or shall disapprove the request if the power is not permitted under sub. (1). The division and the universal bank may mutually agree to extend this 60-day period for an additional period of 60 days.

AB892,30,2 (3) Exercise of federal powers through a subsidiary. The division may require that certain powers exercisable by a universal bank under sub. (1) (a) be exercised through a subsidiary of the universal bank with appropriate safeguards to limit the risk exposure of the universal bank.

AB892,30,5 222.0403 Loan powers. (1) Permitted purposes. A universal bank may make, sell, purchase, arrange, participate in, invest in, or otherwise deal in loans or extensions of credit for any purpose.

AB892,30,11 (2) In general. Except as provided in subs. (3) to (8), the total liabilities of any person, other than a municipal corporation, to a universal bank for a loan or extension of credit may not exceed 20% of the capital of the universal bank at any time. In determining compliance with this section, liabilities of a partnership include the liabilities of the general partners, computed individually as to each general partner on the basis of his or her direct liability.

AB892,30,14 (3) Certain secured liabilities. The percentage limitation under sub. (2) is 50% of the universal bank's capital, if the liabilities under sub. (2) are limited to the following types of liabilities:

AB892,30,18 (a) Warehouse receipts. A liability secured by warehouse receipts issued by warehouse keepers who are licensed and bonded in this state under ss. 99.02 and 99.03 or under the federal Bonded Warehouse Act or who hold a registration certificate under ch. 127, if all of the following requirements are met:

AB892,30,19 1. The receipts cover readily marketable nonperishable staples.

AB892,30,20 2. The staples are insured, if it is customary to insure the staples.

AB892,30,22 3. The market value of the staples is not, at any time, less than 140% of the face amount of the obligation.

AB892,30,24 (b) Certain bonds or notes. A liability in the form of a note or bond that meets any of the following qualifications:

AB892,31,3 1. The note or bond is secured by not less than a like amount of bonds or notes of the United States issued since April 24, 1917, or certificates of indebtedness of the United States.

AB892,31,8 2. The note or bond is secured or covered by guarantees or by commitments or agreements to take over, or to purchase, the bonds or notes, and the guarantee, commitment, or agreement is made by a federal reserve bank, the federal small business administration, the federal department of defense, or the federal maritime commission.

AB892,31,10 3. The note or bond is secured by mortgages or trust deeds insured by the federal housing administration.

AB892,31,12 (4) Obligations of local governmental units. (a) Definition. In this subsection, "local governmental unit" has the meaning given in s. 16.97 (7).

AB892,31,15 (b) General limitation. Except as otherwise provided in this subsection, the total liabilities of a local governmental unit to a universal bank for money borrowed may not, at any time, exceed 25% of the capital of the universal bank.

AB892,31,21 (c) Revenue obligations. Liabilities in the form of revenue obligations of a local governmental unit are subject to the limitations provided in par. (b). In addition, a universal bank is permitted to invest in a general obligation of that local governmental unit in an amount that will bring the combined total of the general obligations and revenue obligations of a single local governmental unit to a sum not in excess of 50% of the capital of the universal bank.

AB892,31,25 (d) General obligations. If the liabilities of the local governmental unit are in the form of bonds, notes, or other evidences of indebtedness that are a general obligation of a local governmental unit, the total liability of the local governmental unit may not exceed 50% of the capital of the universal bank.

AB892,32,5 (e) Temporary borrowings. The total amount of temporary borrowings of any local governmental unit maturing within one year after the date of issue may not exceed 60% of the capital of the universal bank. Temporary borrowings and longer-term general obligation borrowings of a single local governmental unit may be considered separately in determining compliance with this subsection.

AB892,32,11 (5) Obligations of certain international organizations; other foreign bonds. A universal bank may purchase bonds offered for sale by the International Bank for Reconstruction and Development and the Inter-American Development Bank or any other foreign bonds approved under rules established by the division. The aggregate investment in any of these bonds issued by a single issuer may not exceed 10% of the capital of the universal bank.

AB892,32,17 (6) Foreign national government bonds. A universal bank may purchase general obligation bonds issued by any foreign national government if the bonds are payable in United States funds. The aggregate investment in these foreign bonds may not exceed 3% of the capital of the universal bank, except that this limitation does not apply to bonds of the Canadian government and Canadian provinces that are payable in United States funds.

AB892,32,25 (7) Limits established by board. (a) When financial statements required. A universal bank may not make or renew a loan or loans, the aggregate total of which exceeds the level established by the board of directors without being supported by a signed financial statement of the borrower, unless the loan is secured by collateral having a value in excess of the amount of the loan. A signed financial statement furnished by the borrower to a universal bank in compliance with this paragraph must be renewed annually as long as the loan or any renewal of the loan remains unpaid and is subject to this paragraph.

AB892,33,5 (b) Treatment of loans complying with limits. A loan or a renewal of a loan made by a universal bank in compliance with par. (a), without a signed financial statement, may be treated by the universal bank as entirely independent of any secured loan made to the same borrower if the loan does not exceed the applicable limitations provided in this section.

AB892,33,6 (8) Exceptions. This section does not apply to any of the following:

AB892,33,10 (a) Liabilities secured by certain short-term federal obligations. A liability that is secured by not less than a like amount of direct obligations of the United States which will mature not more than 18 months after the date on which such liabilities to the universal bank are entered into.

AB892,33,14 (b) Certain federal and state obligations or guaranteed obligations. A liability that is a direct obligation of the United States or this state, or an obligation of any governmental agency of the United States or this state, that is fully and unconditionally guaranteed by the United States or this state.

AB892,33,16 (c) Commodity Credit Corporation liabilities. A liability in the form of a note, debenture, or certificate of interest of the Commodity Credit Corporation.

AB892,33,20 (d) Discounting bills of exchange or business or commercial paper. A liability created by the discounting of bills of exchange drawn in good faith against actually existing values or the discounting of commercial or business paper actually owned by the person negotiating the same.