AB872: Bill Text

AB872,130,10 (b) The action would be detrimental to the safety and soundness of the applicant or of the in-state bank or in-state bank holding company, or to the safety and soundness of a subsidiary or affiliate of the applicant, the in-state bank or the in-state bank holding company.

AB872,130,16 (c) Because the applicant or its executive officers, directors or principal shareholders have not established a record of sound performance, efficient management, financial responsibility and integrity, the action would be contrary to the best interests of the depositors, other customers, creditors or shareholders of the applicant or of the in-state bank or in-state bank holding company or contrary to the best interests of the public.

AB872,130,20 (d) The applicant has received a rating of "needs to improve record of meeting community credit needs" under 12 USC 2906 (b) (2) (C) or "substantial noncompliance in meeting community credit needs" under 12 USC 2906 (b) (2) (D) by the bank supervisory agency.

AB872,130,24 (f) The applicant has failed to enter into an agreement prepared by the division to comply with the laws and rules of this state regulating consumer credit finance charges and other charges and related disclosure requirements, except to the extent preempted by federal law or regulation.

AB872,131,2 (g) The applicant fails to meet any other standards established by rule of the division.

AB872,131,7 (7) State concentration limit. The division may not approve any transaction under sub. (3) (a) if, upon consummation of the transaction, the applicant would control a greater percentage of the total amount of deposits of insured depository institutions in the state than the percentage specified under 12 USC 1842 (d) (2) (B) (ii).

AB872,131,12 (8) Age requirement. (a) Except as provided in pars. (b) and (c), the division may not approve an application by an out-of-state bank holding company under sub. (3) (a) unless the in-state bank to be acquired, or all in-state bank subsidiaries of the in-state bank holding company to be acquired, have as of the proposed date of acquisition been in existence and in continuous operation for at least 5 years.

AB872,131,17 (b) The division may approve an application for an acquisition of an in-state bank holding company that owns one or more in-state banks that have been in existence for less than 5 years, if the out-of-state bank holding company divests itself of those in-state banks within 2 years after the date of acquisition of the in-state bank holding company by the out-of-state bank holding company.

AB872,131,22 (c) Paragraphs (a) and (b) do not apply to an in-state bank that is the surviving bank of a merger with an in-state bank that had been in existence and continuous operation for at least 5 years at the time of the merger or would have been in existence and in continuous operation for at least 5 years as of the proposed date of acquisition, if the merger had not taken place.

AB872,131,25 (9) Reports. Each bank holding company that controls an in-state bank or an in-state bank holding company shall submit to the division reports under s. 221.0526.

AB872,132,2 (10) Penalties. The division may enforce the provisions of this section pursuant to s. 220.04 (9).

AB872,132,3 SUBCHAPTER X

AB872,132,5 RECORDS, REPORTS AND LEGAL PROCESS

AB872,132,13 221.1001 Stock book. Every bank shall keep a stock book. The stock book shall be subject to the inspection of officers, directors and shareholders of the bank during the usual hours for transacting business. The stock book shall show the name, residence and number of shares held by each shareholder. A refusal by the officers of such bank to exhibit the stock book to any person rightfully demanding inspection of the book, may be required to forfeit not more than $50. In all actions, suits and proceedings, the stock book is presumptive evidence of the facts contained in the book.

AB872,132,18 221.1002 Reports; proofs of publication. (1) Reporting requirements. A bank shall make to the division not less than 2 reports during each calendar year. The reports shall be made at the times required by the division on forms prescribed and furnished by the division. The forms shall conform as nearly as practicable to that required of national banks, including any schedules.

AB872,132,24 (2) Attestation. The reports under sub. (1) shall be signed and verified by the oath or affirmation of one of the officers of the bank, and shall be attested by at least 2 of the directors. If by reason of absence or other inability it is impracticable to obtain the signature of 2 directors, the report shall specify the reason why it is impracticable and the attestation by the director so absent or under disability is not required.

AB872,133,5 (3) Resources and liabilities. The report under sub. (1) shall exhibit in detail and under the proper headings, the resources and liabilities of the bank at the close of the business of any past day specified by the division. The bank shall transmit the report to the division within 30 days after the receipt of request for the report from the division.

AB872,133,9 (4) List of shareholders. When requested by the division, any bank shall report to the division a list of its shareholders, their residences, and the amount of stock held by each. The shareholder list shall be signed and verified by the oath or affirmation of one of the officers of the bank.

AB872,133,12 (5) Special reports. The division may require special reports from a bank, if the division determines that the reports are necessary to inform the division fully of the bank's condition.

AB872,133,17 221.1003 Forfeiture. A bank failing to make and transmit to the division a report or proof of publication required under this chapter may be required to forfeit to the division not more than $100 for each day after the report or proof of publication was required. If a bank fails or refuses to pay the forfeiture under this section, the division may institute proceedings for the recovery of the forfeiture.

AB872,133,19 221.1004 False statements. (1) Prohibition. An officer, director or employe of a bank may not do any of the following:

AB872,133,21 (a) Wilfully and knowingly subscribe to or make, or cause to be made, any false statement or false entry in the books of the bank.

AB872,133,23 (b) Knowingly subscribe to or exhibit false papers with the intent to deceive any person authorized to examine the affairs of the bank.

AB872,133,24 (c) Knowingly make, state, or publish any false report or statement of the bank.

AB872,134,3 (2) Penalties. Any person who violates sub. (1) may be fined not less than $1,000 nor more than $5,000, or imprisoned not less than one year nor more than 10 years, or both.

AB872,134,10 221.1005 Refusal to permit inspection. If an officer in charge of a bank refuses to submit the books, papers and concerns of the bank to the inspection of the division, or refuses to be examined under oath touching the concerns of the bank, the division may inform the attorney general. The department of justice shall then institute an action to procure a judgment dissolving the bank. In order to carry out this section, the division may commence and maintain in the division's name any action necessary or proper to enforce this section.

AB872,134,14 221.1006 Fees for certified copies. If a certified copy of a record filed in the division is lawfully required to be furnished by the division, the division may assess a reasonable fee as determined by the banking review board. These fees shall be deposited in the general fund.

AB872,134,17 221.1007 Legal process; how served. Legal process against a bank may be served upon the bank in the manner provided by law for service on other corporations organized under the laws of this state.

AB872,135,4 221.1008 Record search. A bank is entitled to reimbursement for expenses and costs incurred in searching for, reproducing and transporting books, papers, records and other data required to be produced by legal process, unless otherwise prohibited by law from collecting these expenses and costs. The expenses and costs shall be paid by persons seeking such production, including governmental units as defined in s. 108.02 (17). A bank may not be required to produce books, papers, records and other data in response to legal process unless the expenses and costs, identified in an itemized invoice to be provided by the bank, are paid or unless payment is tendered to the bank in cash or by certified check or draft. This section does not require the division to reimburse banks for expenses and costs incurred in the exercise by the division of statutory authority to examine banks and enforce the banking laws of this state.

AB872,135,5 SUBCHAPTER XI

AB872,135,6 BANK SERVICE CORPORATIONS

AB872,135,7 221.1101 Bank service corporations. (1) Definitions. In this subchapter:

AB872,135,10 (a) "Bank service corporation" means a corporation organized to perform bank services for 2 or more banks, each of which owns part of the capital stock of the corporation.

AB872,135,14 (b) "Bank services" means check and deposit sorting and posting, computation and posting of interest and other credits and charges, preparation and mailing of checks, statements, notices and similar items, or any other clerical, bookkeeping, accounting, statistical or other similar functions performed for a bank.

AB872,135,18 (c) "Invest" includes any advance of funds to a bank service corporation, whether by purchase of stock, the making of a loan, or otherwise, except a payment for rent earned, goods sold and delivered, or services rendered prior to the making of the payment.

AB872,135,21 (2) Investments in bank service corporations. (a) Two or more banks may invest not more than 10% of the capital of each of the banks in a bank service corporation.

AB872,136,2 (b) If stock in a bank service corporation is held by 2 banks, and one of the banks ceases to utilize the services of the corporation and ceases to hold stock in it, and leaves the other as the sole stock holding bank, the corporation may nevertheless continue to function as a bank service corporation and the other bank may continue to hold stock in it.

AB872,136,8 (3) Services to competitive banks. (a) Except as provided in par. (b), if a bank, referred to in this subsection as the "applying bank", applies for a type of bank service for itself from a bank service corporation that supplies the same type of bank service to another bank, and the applying bank is competitive with a bank that holds stock in the bank service corporation, the bank service corporation must offer to supply the service by doing at least one of the following, at the option of the applying bank:

AB872,136,10 1. Issuing stock to the applying bank and furnishing the bank service to it on the same basis as to the other banks holding stock in the bank service corporation.

AB872,136,13 2. Furnishing the bank service to the applying bank at a rate no higher than necessary to fairly reflect the cost of the service, including the reasonable cost of the capital provided to the bank service corporation by its shareholders.

AB872,136,20 (b) The bank service corporation need not offer to supply the bank service to the applying bank under par. (a) if the service at competitive overall costs are available to the applying bank from another source, or if the furnishing of the bank service sought by the applying bank would be beyond the practical capacity of the bank service corporation. In any action or proceeding to enforce the duty imposed by this subsection, or for damages for the breach of this section, the bank service corporation has the burden of showing the applicability of this paragraph.

AB872,136,23 (4) Permitted activities of bank service corporations. A bank service corporation may not engage in any activity other than the performance of bank services for banks.

AB872,137,4 (5) Contracting for bank services. A bank may cause to be performed, by contract or otherwise, any bank service for itself, whether on or off its premises, if the bank and the party performing the service provide the division with assurances, satisfactory to the division, that the performance of the service will be subject to regulation and examination by the division to the same extent as if the service was being performed by the bank itself on its own premises.

AB872,137,5 SUBCHAPTER XII

AB872,137,6 BANK-OWNED BANKS

AB872,137,10 221.1201 Stock in bank-owned banks. A bank, or, subject to the limitations of s. 221.0901, a bank holding company, may, with the approval of the division, acquire and hold stock, in an aggregate amount not exceeding 10% of its capital, in one or more of the following:

AB872,137,11 (1) A bank chartered under s. 221.1202.

AB872,137,12 (2) A national bank chartered under 12 USC 27 (b).

AB872,137,14 (3) A bank holding company wholly owning a bank described under sub. (1) or (2).

AB872,137,20 221.1202 Bank-owned banks. (1) Establishment and ownership. The division may authorize the establishment of, and issue a charter to, a bank, all of the stock of which is owned by 2 or more depository institutions or depository institution holding companies. Notwithstanding any other requirement of this section, the division may authorize, by rule, up to 10% of the stock to be held by other persons to accommodate operational needs of the bank.

AB872,137,23 (2) Status and powers. A bank established under sub. (1) is a state bank chartered under this chapter for all purposes, except that its functions are limited solely to doing the following:

AB872,138,2 (a) Providing banking and banking-related services to or for depository institutions, subsidiaries of depository institutions, depository institution holding companies, subsidiaries of depository institution holding companies and directors, officers and employes of other depository institutions.

AB872,138,5 (b) Providing correspondent banking services at the request of other depository institutions or depository institution holding companies, and to depository institution trade associations.

AB872,138,7 (3) Stock issuance. A bank established under sub. (1) may authorize and hold authorized but not issued stock.

AB872, s. 25 Section 25. Chapter 223 (title) of the statutes is amended to read:

AB872,138,9 CHAPTER 223

AB872,138,11 TRUST COMPANY BANKS and other fiduciaries

AB872, s. 26 Section 26. Subchapter I (title) of chapter 223 [precedes 223.01] of the statutes is created to read:

AB872,138,14 Chapter 223

AB872,138,15 Subchapter I

AB872,138,16 Trust company banks

AB872, s. 27 Section 27. 223.01 of the statutes is amended to read:

AB872,139,2 223.01 Trust company banks, capital. Trust company banks may be organized pursuant to ch. 221, entitled "State Banks," and shall be subject to all the provisions, requirements, and liabilities of chs. 220 and 221, so far as applicable, except ss. 221.29 and 221.32, that trust company banks may not accept deposits other than trust deposits and except as otherwise hereinafter provided. The capital stock of any such corporation shall be fixed and limited by the articles of incorporation, and must be at least $100,000, and not to exceed $5,000,000, except that in cities of less than 100,000 inhabitants it may be less than $100,000, but it shall not be less than $50,000. The division may, with the approval of the banking review board, establish minimum capital requirements for a trust company bank.

AB872, s. 28 Section 28. 223.02 of the statutes, as affected by 1995 Wisconsin Act 27, is repealed and recreated to read:

AB872,139,7 223.02 Indemnity fund deposit; errors and omissions insurance. Before any trust company bank may commence business in this state, the trust company bank shall do one of the following:

AB872,139,9 (1) Indemnity fund deposit. Deposit at least $100,000 with the state treasurer or the state treasurer's agent in accordance with the following provisions:

AB872,139,13 (a) The deposit may be securities eligible for trust investments under ch. 881 and approved by the division or be cash. The trust company bank may from time to time withdraw securities or cash, if the value of the balance of the deposit remains at least $100,000.

AB872,139,18 (b) The state treasurer or the state treasurer's agent shall pay over to the bank trust company the interest, dividends or other income on deposit or may authorize the bank trust company to collect the interest, dividends or other income. The state treasurer shall issue a certificate stating that a deposit has been made with the state treasurer or the state treasurer's agent in the manner provided in this section.

AB872,139,23 (c) The state treasurer or the state treasurer's agent shall hold the deposit as security for the faithful execution of any trust which may be lawfully imposed upon and accepted by the trust company bank. The cash or securities shall remain in the possession of the state treasurer or the state treasurer's agent until otherwise ordered by a court of competent jurisdiction, unless released pursuant to par. (d).

AB872,140,2 (d) The securities and cash deposited by a trust company bank may be released by the state treasurer or the state treasurer's agent and returned to the bank, if the division certifies to the state treasurer that the bank no longer exercises trust powers and that the division is satisfied that there are no outstanding trust liabilities.

AB872,140,7 (e) The state treasurer may designate a banking corporation, having an authorized capital of $1,000,000 or more, to act as an agent to hold the cash or securities in safekeeping. The agent shall furnish to the state treasurer a safekeeping receipt for all cash and securities received by it. The agent shall pay the cash and securities to the state treasurer on demand without conditions.

AB872,140,12 (2) Errors and omissions insurance policy. Obtain and maintain adequate insurance against loss, expense and liability resulting from errors, omissions or neglect in the performance of any trust which may be lawfully imposed upon and accepted by the trust company bank. The trust company bank shall file a copy of the policy with the division.

AB872, s. 29 Section 29. 223.025 of the statutes, as affected by 1995 Wisconsin Act 27, is repealed.

AB872, s. 30 Section 30. 223.03 (6) of the statutes is repealed and recreated to read:

AB872,140,18 223.03 (6) To act as trustee, executor, administrator, registrar of stocks and bonds, custodian, agent, guardian of estates, assignee, receiver, and in any other fiduciary capacity authorized by the division.

AB872, s. 31 Section 31. 223.03 (10) of the statutes, as affected by 1995 Wisconsin Act 27, is repealed.

AB872, s. 32 Section 32. 223.03 (11) of the statutes is repealed.

AB872, s. 33 Section 33. 223.03 (12) of the statutes is repealed.

AB872, s. 34 Section 34. 223.03 (14) of the statutes, as affected by 1995 Wisconsin Act 27, is amended to read:

AB872,141,5 223.03 (14) To establish and maintain a branch trust company bank with the approval of the division. Section 221.04 (1) (jm) 2. to 8., as it applies to bank branch offices under that paragraph, applies to trust company bank branch offices under this subsection to the same extent and in the same manner that a state bank may establish and maintain a branch bank under s. 221.0302.

AB872, s. 35 Section 35. 223.04 of the statutes is repealed.

AB872, s. 36 Section 36. 223.07 (1) of the statutes, as affected by 1995 Wisconsin Act 27, is amended to read:

AB872,141,13 223.07 (1) Any trust company bank may, with the approval of the division, establish and maintain a trust service office at any office in this state of a state or national bank depository institution, as defined in s. 221.0901 (2) (i), if the establishment of the trust service office has been approved by the board of directors of the state or national bank at a meeting called for that purpose.

AB872, s. 37 Section 37. 223.07 (3) of the statutes, as affected by 1995 Wisconsin Act 27, is amended to read:

AB872,142,23 223.07 (3) If the state or national bank depository institution at which a trust service office is to be established has exercised trust powers, the trust company bank and the state or national bank depository institution shall enter into an agreement respecting those fiduciary powers to which the trust company bank shall succeed and shall file the agreement with the division. The trust company bank shall cause a notice of the filing, in a form prescribed by the division, to be published as a class 1 notice, under ch. 985, in the city, village or town where the state or national bank depository institution is located. After filing and publication, the trust company bank establishing the office shall, as of the date the office first opens for business, without further authorization of any kind, succeed to and be substituted for the state or national bank depository institution as to all fiduciary powers, rights, duties, privileges and liabilities of the bank depository institution in its capacity as fiduciary for all estates, trusts, guardianships and other fiduciary relationships of which the bank depository institution is then serving as fiduciary, except as may be otherwise specified in the agreement between the trust company bank and the state or national bank depository institution. The trust company bank shall also be deemed named as fiduciary in all writings, including, but not limited to, wills, trusts, court orders and similar documents and instruments naming the state or national bank depository institution as fiduciary, signed before the date the trust office first opens for business, unless expressly negated by the writing or otherwise specified in the agreement between the trust company bank and the state or national bank depository institution. On the effective date of the substitution, the state or national bank depository institution shall be released and absolved from all fiduciary duties and obligations under such writings and shall discontinue its exercise of trust powers on all matters not specifically retained by the agreement. This subsection does not effect a discharge in the manner of s. 701.16 (6) or other applicable statutes and does not absolve a state or national bank depository institution exercising trust powers from liabilities arising out of any breach of fiduciary duty or obligation occurring prior to the date the trust service office first opens for business at the bank depository institution. This subsection does not affect the authority, duties or obligations of a bank depository institution with respect to relationships which may be established without trust powers, including escrow arrangements, whether the relationships arise before or after the establishment of the trust service office.

AB872, s. 38 Section 38. 223.08 of the statutes is amended to read:

AB872,143,12 223.08 Name of corporation; penalty. The word "trust" shall form part of the name of every corporation organized under this chapter, but the word "bank" shall may not be used as a part of the name. All persons, partnerships, associations, or corporations not organized under the provisions of this chapter, except state banks vested with trust powers under s. 221.04 (6) 221.0316 and nonprofit corporations organized for the advancement of historic preservation or for the protection of land for public conservation purposes, are prohibited from using the word "trust" in their business, or as a portion of the name or title of such the person, partnership, association, or corporation. Any A person who violates this section, either individually or as an interested party in any partnership, association, or corporation, may be fined not less than $300 nor more than $1,000 or imprisoned for not less than 60 days nor more than one year in the county jail or both.

AB872, s. 39 Section 39. Subchapter II (title) of chapter 223 [precedes 223.10] of the statutes is created to read:

AB872,143,15 Chapter 223