SB494: Bill Text

SB494,123,3 (2) Where proceeding to be brought. The bank shall bring the special proceeding in the circuit court for the county where its principal office or, if none in this state, its registered office is located. If the bank is a foreign bank without a registered office in this state, it shall bring the special proceeding in the county in this state in which was located the registered office of the issuer bank that merged with or whose shares were acquired by the foreign bank.

SB494,123,7 (3) Parties to the proceeding. The bank shall make all dissenters, whether or not residents of this state, whose demands remain unsettled parties to the special proceeding. Each party to the special proceeding shall be served with a copy of the petition as provided in s. 801.14.

SB494,123,13 (4) Jurisdiction. The jurisdiction of the court in which the special proceeding is brought under sub. (2) is plenary and exclusive. The court may appoint one or more persons as appraisers to receive evidence and recommend a decision on the question of fair value. An appraiser has the power described in the order appointing him or her or in any amendment to the order. The dissenters are entitled to the same discovery rights as parties in other civil proceedings.

SB494,123,15 (5) Judgements. Each dissenter made a party to the special proceeding is entitled to judgment for any of the following:

SB494,123,17 (a) The amount, if any, by which the court finds the fair value of his or her shares, plus interest, exceeds the amount paid by the bank.

SB494,123,20 (b) The fair value, plus accrued interest, of his or her shares acquired on or after the date specified in the dissenters' notice under s. 221.0710 (2) (c), for which the bank elected to withhold payment under s. 221.0715.

SB494,123,25 221.0718 Court costs and counsel fees. (1) Assessment of and liability for costs. (a) Notwithstanding ss. 814.01 to 814.04, the court in a special proceeding brought under s. 221.0717 shall determine all costs of the proceeding, including the reasonable compensation and expenses of appraisers appointed by the court and shall assess the costs against the bank, except as provided in par. (b).

SB494,124,4 (b) Notwithstanding ss. 814.01 and 814.04, the court may assess costs against all or some of the dissenters, in amounts that the court finds to be equitable, to the extent that the court finds the dissenters acted arbitrarily, vexatiously or not in good faith in demanding payment under s. 221.0716.

SB494,124,8 (2) When liable for fees and costs. The parties shall bear their own expenses of the proceeding, except that, notwithstanding ss. 814.01 to 814.04, the court may also assess the fees and expenses of counsel and experts for the respective parties, in amounts that the court finds to be equitable, as follows:

SB494,124,10 (a) Against the bank and in favor of any dissenter if the court finds that the bank did not substantially comply with ss. 221.0708 to 221.0716.

SB494,124,14 (b) Against the bank or against a dissenter, in favor of any other party, if the court finds that the party against whom the fees and expenses are assessed acted arbitrarily, vexatiously or not in good faith with respect to the rights provided by this chapter.

SB494,124,19 (3) Payment of counsel and experts from recovery. Notwithstanding ss. 814.01 to 814.04, if the court finds that the services of counsel and experts for any dissenter were of substantial benefit to other dissenters similarly situated, the court may award to these counsel and experts reasonable fees to be paid out of the amounts awarded the dissenters who were benefited.

SB494,124,20 SUBCHAPTER VIII

SB494,124,21 DISSOLUTION AND LIQUIDATION

SB494,125,3 221.0801 Liquidation. (1) When authorized. A bank organized or doing business under this chapter may go into liquidation by a vote of its shareholders owning a majority of the capital stock outstanding or such greater percentage required under the articles of incorporation or bylaws. If a vote is taken to go into liquidation, the board of directors shall give notice of this fact to the division, and the notice shall be certified by an officer of the bank. A liquidating bank may not transfer assets or liabilities to another bank until the transfer is approved by the division.

SB494,125,7 (2) Notice. The board of directors shall also give notice of this fact by certified mail to all persons whose names appear as creditors upon the books of the bank and by publication as a class 3 notice, under ch. 985. The notice shall direct all persons who may have claims against the bank to file the claims.

SB494,125,19 221.0802 Banks may be placed in hands of division. A bank doing business under this chapter may place its affairs and assets under the control of the division by posting a notice on its front door, as follows: "This bank is in the hands of the Division of Banking of the Department of Financial Institutions". Immediately upon posting such notice, the bank shall notify the division of this action. The posting of the notice, or the taking possession of a bank by the division, places the bank's assets and property in the possession of the division, and bars any attachment proceedings. For each day the division is placed in possession of the bank, and until such time as a special deputy is appointed under s. 220.08 (4), the bank shall pay to the division the actual cost of such liquidation proceedings. The division shall pay the amounts to the state treasurer and the percentage specified in s. 20.124 (1) (g) shall be credited to the appropriation account under s. 20.124 (1) (g).

SB494,126,3 221.0803 Charter, how forfeited. If the board of directors or a quorum thereof or any committee of the board of any bank knowingly violates or knowingly permits any of the officers, agents or employes of the bank to violate this chapter, the directors are jointly and severally liable for the amount of the loss sustained by the bank. If, after a warning from the division, the directors shall fail to make good any loss or damage resulting from the violations, or continue such conduct, it shall constitute a ground for the forfeiture of the charter of the bank, and the division shall institute proceedings to enforce the forfeiture and to secure a dissolution and a winding up of the affairs of the bank.

SB494,126,4 SUBCHAPTER IX

SB494,126,6 INTERSTATE BANKING AND FOREIGN BANKS

SB494,126,9 221.0901 Acquisitions of banks and bank holding companies. (1) Applicability. This section applies to acquisitions of an in-state bank or an in-state bank holding company by any company.

SB494,126,10 (2) Definitions. In this section:

SB494,126,11 (a) "Affiliate" has the meaning set forth in 12 USC 1841 (k).

SB494,126,12 (b) "Bank" has the meaning set forth in 12 USC 1841 (c).

SB494,126,15 (c) "Bank holding company" has the meaning set forth in 12 USC 1841 (a), and unless the context otherwise requires, includes an in-state bank holding company, an out-of-state bank holding company and a foreign bank holding company.

SB494,126,19 (d) "Bank supervisory agency" means the U.S. office of the comptroller of the currency, the federal deposit insurance corporation, the board of governors of the federal reserve system, or any successor to these agencies, or any agency of another state with primary responsibility for chartering and supervising banks.

SB494,126,21 (f) "Company" has the meaning set forth in 12 USC 1841 (b) and includes a bank holding company.

SB494,126,22 (g) "Control" shall be interpreted consistently with 12 USC 1841 (a).

SB494,126,23 (h) "Deposit" has the meaning set forth in 12 USC 1813 (1).

SB494,126,25 (i) "Depository institution" means any insured depository institution under 12 USC 1813 (c) (2) and (3).

SB494,127,3 (j) "Foreign bank holding company" means a bank holding company that is organized under the laws of a country other than the United States or any territory or possession of the United States.

SB494,127,6 (k) "In-state bank" means a bank that is organized under this chapter, a trust company bank organized under ch. 223 or a bank organized under federal law and having its principal place of business in this state.

SB494,127,10 (L) "In-state bank holding company" means a bank holding company that has its principal place of business in this state or a company that has control of a trust company organized under ch. 223 and is not controlled by a bank holding company other than an in-state bank holding company.

SB494,127,13 (m) "Out-of-state bank holding company" means a bank holding company that is not an in-state bank holding company and, unless the context requires otherwise, includes a foreign bank holding company.

SB494,127,15 (n) "Principal place of business" of a bank holding company means the state in which the total deposits of its bank subsidiaries are the greatest.

SB494,127,17 (p) "State" means any state, territory or other possession of the United States, including the District of Columbia.

SB494,127,18 (q) "Subsidiary" has the meaning set forth in 12 USC 1841 (d).

SB494,127,21 (3) Approval requirements. (a) Except as otherwise expressly permitted by federal law or par. (b), no company may do any of the following without the prior approval of the division:

SB494,127,22 1. Merge or consolidate with an in-state bank holding company.

SB494,127,23 2. Assume direct or indirect ownership or control of:

SB494,128,3 a. More than 25% of any class of voting shares of an in-state bank holding company or an in-state bank, if the acquiring company is not a bank holding company prior to the acquisition.

SB494,128,6 b. More than 5% of any class of voting shares of an in-state bank holding company or an in-state bank, if the acquiring company is a bank holding company prior to the acquisition.

SB494,128,8 c. All or substantially all of the assets of an in-state bank holding company or an in-state bank.

SB494,128,10 3. Take other action that results in the direct or indirect acquisition of control of an in-state bank holding company or an in-state bank.

SB494,128,12 (b) The approval of the division is not needed under par. (a) in any of the following transactions:

SB494,128,14 1. A transaction arranged by the division or a bank supervisory agency to prevent the insolvency or closing of the acquired bank.

SB494,128,17 2. A transaction in which a bank forms its own bank holding company, if the ownership rights of the former bank shareholders are substantially similar to those of the shareholders of the new bank holding company.

SB494,128,21 (c) In a transaction under par. (b) in which the division's approval is not required, the parties shall give written notice to the division at least 15 days before the effective date of the acquisition, unless a shorter period of notice is required under applicable federal law.

SB494,128,23 (4) Required application. A company that requires the division's approval under sub. (3) (a) shall do all of the following:

SB494,128,24 (a) File with the division an application in the form that the division requires.

SB494,128,25 (b) Pay to the division an application fee determined by the division.

SB494,129,3 (c) Reimburse the division for all actual costs incurred by the division in making an investigation related to the application under par. (a) and in holding any hearing on the application.

SB494,129,9 (d) Cause to be published a class 3 notice, under ch. 985, in the form prescribed by the division, in the official state newspaper, of the application under par. (a) and of the opportunity for a hearing under sub. (5). If the application is to acquire an in-state bank, the notice also shall be published in a newspaper of general circulation in the city, village or town where the home office of the in-state bank is located.

SB494,129,11 (e) File with the division proof of publication of the notice under par. (d), upon completion of the publication of the notice.

SB494,129,14 (f) If the applicant is an out-of-state bank holding company, submit to the division with the application, proof that the applicant has complied with, or is exempt from, the requirements of subch. XV of ch. 180.

SB494,129,21 (5) Hearing. (a) Except as provided in par. (b), the division shall hold a hearing on the application under sub. (4) (a) if at least 25 residents of this state petition for a hearing within 30 days after the notice under sub. (4) (d) or if the division, on its own motion, calls for a hearing within 30 days after the notice under sub. (4) (d). Except as provided in par. (b), the division may not approve any transaction under sub. (3) (a) until the later of 30 days after the notice under sub. (4) (d) or 30 days after any hearing required under this paragraph.

SB494,129,24 (b) Paragraph (a) does not apply to a proposed transaction if the division finds that an emergency exists and that the proposed transaction is necessary and appropriate to prevent the probable failure of an in-state bank.

SB494,130,2 (6) Standards for disapproval. The division may disapprove a transaction under sub. (3) (a) if the division finds any of the following:

SB494,130,6 (a) Considering the financial and managerial resources and future prospects of the applicant and of the in-state bank or in-state bank holding company, the transaction would be contrary to the best interests of the shareholders or customers of the in-state bank or in-state bank holding company.

SB494,130,10 (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.

SB494,130,16 (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.

SB494,130,20 (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.

SB494,130,24 (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.

SB494,131,2 (g) The applicant fails to meet any other standards established by rule of the division.

SB494,131,7 (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).

SB494,131,12 (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.

SB494,131,17 (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.

SB494,131,22 (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.

SB494,131,25 (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.

SB494,132,2 (10) Penalties. The division may enforce the provisions of this section pursuant to s. 220.04 (9).

SB494,132,3 SUBCHAPTER X

SB494,132,5 RECORDS, REPORTS AND LEGAL PROCESS

SB494,132,13 221.1001 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.

SB494,132,18 221.1002 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.

SB494,132,24 (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.

SB494,133,5 (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.

SB494,133,9 (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.

SB494,133,12 (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.

SB494,133,17 221.1003 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.

SB494,133,19 221.1004 False statements. (1) Prohibition. An officer, director or employe of a bank may not do any of the following:

SB494,133,21 (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.

SB494,133,23 (b) Knowingly subscribe to or exhibit false papers with the intent to deceive any person authorized to examine the affairs of the bank.

SB494,133,24 (c) Knowingly make, state, or publish any false report or statement of the bank.

SB494,134,3 (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.

SB494,134,10 221.1005 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.

SB494,134,14 221.1006 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.

SB494,134,17 221.1007 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.

SB494,135,4 221.1008 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.

SB494,135,5 SUBCHAPTER XI