SB494: Bill Text

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

SB494,135,6 BANK SERVICE CORPORATIONS

SB494,135,7 221.1101 Bank service corporations. (1) Definitions. In this subchapter:

SB494,135,10 (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.

SB494,135,14 (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.

SB494,135,18 (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.

SB494,135,21 (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.

SB494,136,2 (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.

SB494,136,8 (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:

SB494,136,10 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.

SB494,136,13 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.

SB494,136,20 (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.

SB494,136,23 (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.

SB494,137,4 (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.

SB494,137,5 SUBCHAPTER XII

SB494,137,6 BANK-OWNED BANKS

SB494,137,10 221.1201 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:

SB494,137,11 (1) A bank chartered under s. 221.1202.

SB494,137,12 (2) A national bank chartered under 12 USC 27 (b).

SB494,137,14 (3) A bank holding company wholly owning a bank described under sub. (1) or (2).

SB494,137,20 221.1202 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.

SB494,137,23 (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:

SB494,138,2 (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.

SB494,138,5 (b) Providing correspondent banking services at the request of other depository institutions or depository institution holding companies, and to depository institution trade associations.

SB494,138,7 (3) Stock issuance. A bank established under sub. (1) may authorize and hold authorized but not issued stock.

SB494, s. 25 Section 25. Chapter 223 (title) of the statutes is amended to read:

SB494,138,9 CHAPTER 223

SB494,138,11 TRUST COMPANY BANKS and other fiduciaries

SB494, s. 26 Section 26. Subchapter I (title) of chapter 223 [precedes 223.01] of the statutes is created to read: