SB494,58,15 7(5) Certain secured loans. A bank may make loans secured by assignment or
8transfer of stock certificates or other evidence of the borrower's ownership interest
9in a corporation formed for the cooperative ownership of real estate. Sections 846.10
10and 846.101, as they apply to a foreclosure of a mortgage involving a one-family
11residence, apply to a proceeding to enforce the lender's rights in security given for
12a loan under this subsection. The division shall promulgate joint rules with the
13division of credit unions and the division of savings and loan that establish
14procedures for enforcing a lender's rights in security given for a loan under this
15subsection.
SB494,58,18 16(6) Investments in other financial institutions. In addition to the authority
17granted under s. 221.1201 and subject to the limitations of sub. (3), a bank may invest
18in other financial institutions.
SB494,58,24 19221.0322 Additional banking authority. (1) Other permitted activities
20or powers.
Subject to any regulatory approval required by law and subject to sub.
21(2) and s. 221.0315 (2), a bank, directly or through a subsidiary of the bank, may
22undertake any activity, exercise any power or offer any financially related product
23or service in this state that any other provider of financial products or services may
24undertake, exercise or provide or that the division finds to be financially related.
SB494,59,8
1(2) Division rules. The activities, powers, products and services that may be
2undertaken, exercised or offered by banks under sub. (1) are limited to those
3specified by rule of the division and, with respect to loans under s. 221.0321 (1) and
4investments under s. 221.0321 (2), are subject to the limitations set forth in s.
5221.0321. The division may direct any bank to cease any activity, the exercise of any
6power or the offering of any product or service authorized by rule under this
7subsection. Among the factors that the division may consider in so directing a bank
8are the bank's capital, assets, management and liquidity ratio, and capital ratio.
SB494,59,11 9221.0323 Bank purchase of its own stock. (1) In general. A bank may be
10the holder or purchaser of not more than 10% of its capital stock, capital notes or
11debentures, except as provided in sub. (2).
SB494,59,21 12(2) Debts previously contracted. A bank may be the holder or purchaser of
13more than 10% of its capital stock, capital notes or debentures if the purchase is
14necessary to prevent loss upon a debt previously contracted in good faith. Stock,
15notes or debentures purchased under this subsection may not be held by the bank
16for more than 6 months if the stock, notes or debentures can be sold for the amount
17of the claim of the bank against the same, and they must be sold for the best price
18obtainable within one year, or they shall be canceled, and shall then amount to a
19reduction of the capital stock, capital notes or debentures. If the reduction reduces
20the capital stock below the minimum required by law, the bank's capital stock must
21be increased to the amount required by law.
SB494,59,24 22(3) Use as security. A bank may not loan any part of its capital, surplus or
23deposits on the capital stock, capital notes or debentures of its own bank as collateral
24security.
SB494,60,4
1(4) Status of treasury shares. Treasury shares are issued shares but not
2outstanding shares. All shares acquired by a bank after the effective date of this
3subsection .... [revisor inserts date], constitute treasury shares unless any of the
4following conditions exists:
SB494,60,55 (a) The articles of incorporation prohibit treasury shares.
SB494,60,76 (b) The board of directors, by resolution, cancels the acquired shares, in which
7event the shares are restored to the status of authorized but unissued shares.
SB494,60,10 8(5) Prohibition in articles of incorporation. If the articles of incorporation
9prohibit treasury shares, all of its own shares acquired by the bank shall be restored
10to the status of authorized but unissued shares.
SB494,60,14 11(6) Saving clause. Treasury shares existing on the effective date of this
12subsection .... [revisor inserts date], remain treasury shares until disposed of,
13canceled or restored to the status of authorized but unissued shares by action of the
14board of directors or shareholders.
SB494,60,19 15221.0324 Assets not to be pledged as security. (1) In general. A bank or
16bank officer may not give preference to any depositor or creditor by pledging the
17assets of the bank as collateral security, except to secure deposits where otherwise
18permitted or required by law for a particular depositor, to secure repurchase
19agreements entered into by the bank or as otherwise provided under this section.
SB494,60,23 20(2) Government deposits. A bank may deposit with the treasurer of the United
21States, or in the custody of federal reserve banks or branches of the federal reserve
22banks designated by a court, so much of its assets, not exceeding its capital and
23surplus, as may be necessary to do any of the following:
SB494,60,2524 (a) To qualify as a depository for postal savings funds and other government
25deposits.
SB494,61,6
1(b) To qualify as a depository for bankrupt estates, debtors, corporations and
2railroads under reorganization under federal bankruptcy laws and receivers,
3trustees and other officers thereof appointed by any U.S. district court or by any
4bankruptcy court of the United States. In acting as a depository under this
5paragraph, a state bank has all the rights and privileges granted to banking
6institutions under section 61 of the U.S. bankruptcy act, as amended.
SB494,61,13 7(3) Temporary purposes. A bank may borrow money for temporary purposes,
8and may pledge assets of the bank not exceeding 50% in excess of the amount
9borrowed as collateral security for this borrowing, if the board of directors has
10adopted a resolution designating the lender from which the money may be borrowed,
11the maximum amount for which the bank may become indebted at any one time and
12the names of the officers who may sign the promissory note evidencing the
13indebtedness.
SB494,61,17 14(4) Bond requirements. A bank that is authorized to exercise trust powers and
15that complies with s. 223.02 is exempt from furnishing the bond specified in s.
16221.0316 and is entitled to the same exemption as to making and filing any oath or
17giving any bond or security as is conferred on trust company banks by s. 223.03 (8).
SB494,61,22 18(5) Pledges to federal reserve board. A bank may pledge assets in an amount
19not to exceed 4 times the amount of its capital to the federal reserve bank, as fiscal
20agent of the United States, of the federal reserve district in which it is located, except
21that no such pledge shall be made in excess of the amount of its capital without the
22consent of the division.
SB494,61,24 23(6) Borrowing to reloan. If a bank is borrowing habitually for the purpose of
24reloaning, the division may require the bank to repay money so borrowed.
SB494,62,3
1(7) Rediscounting and endorsing negotiable notes. This section does not
2prevent a bank from rediscounting in good faith and endorsing its negotiable notes,
3if authorized by a recorded resolution of the board of directors.
SB494,62,6 4(8) Certificates of deposit. A bank may not issue its certificate of deposit for
5the purpose of borrowing money. A bank may not make partial payments upon
6certificates of deposit.
SB494,62,12 7(9) Pledges to and loans from the federal home loan bank. Notwithstanding
8sub. (3), a bank that is a member of the federal home loan bank may borrow money
9from the federal home loan bank for a term not to exceed 20 years and may pledge
10bank assets having a value that does not exceed 2 times the amount of the loan as
11collateral to secure the loan. Total assets pledged under this subsection may not
12exceed 4 times the amount of the bank's capital.
SB494,62,18 13221.0325 Certified checks. An officer, employe or agent of a bank may not
14certify a check, draft or order drawn upon the bank unless the person, firm or
15corporation drawing the check, draft or order has on deposit with the bank at the time
16the check, draft or order is certified an amount of money equal to the amount
17specified in the check, draft or order. A check, draft or order so certified by the duly
18authorized officer, employe or agent is a valid obligation against the bank.
SB494,62,22 19221.0326 Bad debts. All debts due a bank, on which interest is past due and
20unpaid for a period of 12 months, shall be considered bad debts and shall be charged
21off to the profit and loss account at the expiration of one year from the date on which
22the debt became past due, unless the debts are well secured or in process of collection.
SB494,63,3 23221.0327 Surplus fund. (1) Charges to surplus account. A loss sustained
24by a bank in excess of its undivided profits may be charged to its surplus account, if
25its surplus fund is thereafter reimbursed from its earnings. Cash dividends on

1capital stock may not be declared or paid by the bank in excess of 50% of its net
2earnings until its surplus fund is fully restored to the amount that was in the surplus
3account immediately preceding the charge of the loss.
SB494,63,8 4(2) Reimbursement of surplus and restricted dividends. If the surplus fund
5of a bank is in excess of 100% of its capital stock and if losses charged against it do
6not reduce the surplus account to an amount less than 100% of its capital stock, the
7bank is not subject to sub. (1) with respect to reimbursement of the surplus account
8and with respect to restricted dividends on capital stock.
SB494,63,17 9221.0328 Dividends. (1) When permitted. Except as provided in sub. (2), the
10board of directors of a bank may declare and pay a dividend from its undivided profits
11in an amount they consider expedient. The board of directors shall provide for the
12payment of all expenses, losses, required reserves, taxes, and interest accrued or due
13from the bank before the declaration of dividends from undivided profits. If
14dividends declared and paid in either of the 2 immediately preceding years exceeded
15net income for either of those 2 years respectively, the bank may not declare or pay
16any dividend in the current year that exceeds year-to-date net income except with
17the written consent of the division.
SB494,63,22 18(2) Liability of shareholders. A bank's dividends may not in any way impair
19or diminish the capital of the bank other than by reducing undivided profits. If a
20dividend is paid that does not comply with this section, every shareholder receiving
21the dividend is liable to restore the full amount of the dividend unless the capital is
22subsequently made good.
SB494,64,2 23(3) Liability of directors. If the board of directors of a bank pays dividends
24when the bank is insolvent or in danger of insolvency, or not having reason to believe
25that there were sufficient undivided profits to pay the dividends, the members of the

1board of directors are jointly and severally liable to the creditors of the bank at the
2time of declaring dividends in an amount equal to twice the amount of the dividends.
SB494,64,33 SUBCHAPTER IV
SB494,64,44 NAME
SB494,64,6 5221.0401 State bank. Every bank incorporated under this chapter shall be
6known as a state bank.
SB494,64,15 7221.0402 Use of "bank". (1) Use of "bank". Except as provided in sub. (2),
8a person who is engaged in business in this state, who is not subject to supervision
9and examination by the division, and who is not required to make reports to the
10division under this chapter, may not use the term "bank", in any form upon any office
11sign at the place where the business is transacted. Except as provided in sub. (2),
12the person may not use or circulate letterheads, billheads, blank notes, blank
13receipts, certificates, circulars, or any written or printed or partly written and partly
14printed paper, containing an artificial or corporate name, or other words, that
15indicates that the person's business is the business of a bank.
SB494,64,18 16(2) Exceptions. (a) A check sold by a bank chartered under the laws of another
17state or a foreign country or a national bank authorized to do business in another
18state may use any form of "bank", if the bank is licensed under ch. 217.
SB494,64,2019 (b) Mortgage bankers registered under s. 440.72 may use the designation
20"mortgage banker".
SB494,64,2221 (c) A savings bank organized under ch. 214 may use the designation "savings
22bank".
SB494,64,24 23(3) Enforcement. Violations of this section may be enforced by the division
24under s. 220.02 (2).
SB494,65,3
1221.0403 Bank names. (1) In general. Except as provided in subs. (2) and
2(3), the name of a bank must be approved by the division and must be distinguishable
3upon the records of the division from all of the following names:
SB494,65,44 (a) The name of another state bank organized under this chapter.
SB494,65,65 (b) The name of a national bank or foreign bank authorized to transact
6business in this state.
SB494,65,10 7(2) Exceptions. A bank may apply to the division for the authority to use a
8name that is not distinguishable upon the records of the division from one or more
9of the names described in sub. (1). The division may authorize the use of the name
10if any of the following occurs:
SB494,65,1311 (a) The other bank consents to the use in writing and submits an undertaking,
12in a form satisfactory to the division, to change its name to a name that is
13distinguishable upon the records of the division from the name of the applicant.
SB494,65,1614 (b) The applicant delivers to the division a certified copy of the final judgment
15of a court of competent jurisdiction establishing the applicant's right to use the name
16applied for in this state.
SB494,65,19 17(3) Use of same name. A bank may use the name that is used in this state by
18another bank organized under this chapter or authorized to transact business in this
19state if the bank proposing to use the name has done any of the following:
SB494,65,2020 (a) Merged with the other bank.
SB494,65,2121 (b) Been formed by reorganization of the other bank.
SB494,65,2322 (c) Acquired all or substantially all of the assets, including the name, of the
23other bank.
SB494,65,24 24(4) Use of "savings". A bank name may not contain the word "savings".
SB494,65,2525 SUBCHAPTER V
SB494,66,1
1SHARES AND SHAREHOLDERS
SB494,66,7 2221.0501 Quorum and voting requirements for voting groups. (1)
3Quorum requirement. Shares entitled to vote as a separate voting group may take
4action on a matter at a meeting only if a quorum of those shares exists with respect
5to that matter. Unless the articles of incorporation, the bylaws or this chapter
6provide otherwise, a majority of the votes entitled to be cast on the matter by the
7voting group constitutes a quorum of that voting group for action on that matter.
SB494,66,13 8(2) Method of determining quorum. If a share is represented for any purpose
9at a meeting, other than for the purpose of objecting to holding the meeting or
10transacting business at the meeting, the share is considered present for purposes of
11determining whether a quorum exists for the remainder of the meeting and for any
12adjournment of that meeting, unless a new record date is or must be set for that
13adjourned meeting.
SB494,66,17 14(3) Simple majority voting. If a quorum exists, action on a matter by a voting
15group is approved if the votes cast within the voting group favoring the action exceed
16the votes cast opposing the action, unless the articles of incorporation, the bylaws or
17this chapter require a greater number of affirmative votes.
SB494,66,22 18221.0502 Greater or lower quorum or greater voting requirements. (1)
19Method of specifying different requirements. The articles of incorporation may
20provide, or authorize the bylaws under s. 221.0503 to provide, for a greater or lower
21quorum requirement or a greater voting requirement for shareholders or voting
22groups of shareholders than is provided by this chapter.
SB494,67,2 23(2) Amendments to articles of incorporation to change requirements. An
24amendment to the articles of incorporation that adds, changes or deletes a greater
25or lower quorum requirement or a greater voting requirement must meet the same

1quorum requirement and be adopted by the same vote and voting groups required
2to take action under the quorum and voting requirements then in effect.
SB494,67,11 3221.0503 Bylaw fixing quorum or voting requirements for
4shareholders.
(1) In general. If authorized by the articles of incorporation, the
5shareholders may adopt or amend a bylaw that fixes a greater or lower quorum
6requirement or a greater voting requirement for shareholders or voting groups of
7shareholders than is provided by this chapter. The adoption or amendment of a
8bylaw that adds, changes or deletes a greater or lower quorum requirement or a
9greater voting requirement for shareholders must meet the same quorum
10requirement and be adopted by the same vote and voting groups required to take
11action under the quorum and voting requirement then in effect.
SB494,67,14 12(2) Shareholder approval. A bylaw that fixes a greater or lower quorum
13requirement or a greater voting requirement for shareholders under sub. (1) may not
14be adopted, amended or repealed by the board of directors.
SB494,67,17 15221.0504 Number of shareholders. (1) Method of counting. For purposes
16of this chapter, any of the following constitutes one shareholder if identified as a
17shareholder in a bank's current record of shareholders:
SB494,67,1818 (a) Three or fewer coowners.
SB494,67,1919 (b) An entity.
SB494,67,2120 (c) The trustees, guardians, custodians or other fiduciaries of a single trust,
21estate or account.
SB494,67,24 22(2) Substantially similar names. For purposes of this chapter, shareholdings
23registered in substantially similar names constitute one shareholder if it is
24reasonable to believe that the names represent the same person.
SB494,68,4
1221.0505 Issued and outstanding shares. (1) Issued and outstanding
2shares.
A bank may issue the number of shares of each class or series authorized by
3the articles of incorporation. Shares that are issued are outstanding shares until
4they are reacquired, redeemed, converted or canceled.
SB494,68,9 5(2) Share requirements. At all times that shares of the bank are outstanding,
6there must be outstanding one or more shares that together have unlimited voting
7rights and one or more shares, which may be the same share or shares as those with
8unlimited voting rights, that together are entitled to receive the net assets of the
9bank upon dissolution.
SB494,68,11 10221.0506 Fractional shares. (1) Issuance and disposition. A bank may do
11any of the following:
SB494,68,1212 (a) Issue fractions of a share or pay in money the value of fractions of a share.
SB494,68,1313 (b) Arrange for disposition of fractional shares by the shareholders.
SB494,68,16 14(2) Rights of holders of fractional shares. The holder of a fractional share
15may exercise the rights of a shareholder, including the right to vote, to receive
16dividends and to participate in the assets of the bank upon liquidation.
SB494,68,19 17221.0507 Share dividends. (1) Definition. In this section, "share dividend"
18means shares issued proportionally and without consideration to the bank's
19shareholders or to the shareholders of one or more classes or series.
SB494,68,21 20(2) Power to issue share dividends. Except as provided in sub. (3) and unless
21the articles of incorporation provide otherwise, a bank may issue share dividends.
SB494,68,24 22(3) Limitiations. (a) A bank may not issue shares of one class or series as a
23share dividend in respect of shares of another class or series unless any of the
24following is satisfied:
SB494,68,2525 1. The articles of incorporation authorize the issuance.
SB494,69,2
12. A majority of the votes entitled to be cast by the class or series to be issued
2approve the issuance.
SB494,69,43 3. There are no outstanding shares of the class or series to be issued, as
4determined under par. (b).
SB494,69,85 (b) If a security is outstanding that is convertible into or carries a right to
6subscribe for or acquire shares of the class or series to be issued, the holder of the
7security is considered a holder of the class or series to be issued for purposes of
8making the determination under par. (a) 3.
SB494,69,11 9(4) Record date. If the board of directors does not fix the record date for
10determining shareholders entitled to a share dividend, it is the date on which the
11board of directors authorizes the share dividend.
SB494,69,13 12221.0508 Form and content of certificates. (1) Contents. At a minimum,
13a share certificate shall state on its face all of the following:
SB494,69,1514 (a) The name of the issuing bank and that the bank is organized under the laws
15of this state.
SB494,69,1616 (b) The name of the person to whom issued.
SB494,69,1817 (c) The number and class of shares and the designation of the series, if any, that
18the certificate represents.
SB494,69,21 19(2) Classes and series requirements. If the issuing bank is authorized to issue
20different classes of shares or different series within a class, the front or back of each
21certificate shall contain any of the following:
SB494,69,2522 (a) A summary of the designations, relative rights, preferences and limitations
23applicable to each class, and the variations in rights, preferences and limitations
24determined for each series and the authority of the board of directors to determine
25variations for future series.
SB494,70,2
1(b) A conspicuous statement that the bank will furnish the shareholder the
2information described in par. (a) on request, in writing and without charge.
SB494,70,5 3(3) Signature. (a) Each share certificate shall be signed either manually or
4in facsimile, by the officer or officers designated in the bylaws or by the board of
5directors.
SB494,70,76 (b) The validity of a share certificate is not affected if a person who signed the
7certificate no longer holds office when the certificate is issued.
SB494,70,9 8221.0509 Restriction on transfer of shares and other securities. (1)
9Definitions. In this section:
SB494,70,1110 (a) "Other securities" include securities that are convertible into or carry a right
11to subscribe for or acquire shares.
SB494,70,1312 (b) "Transfer restriction" means a restriction on the transfer or registration of
13transfer of shares and other securities of a bank.
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