AB299: Bill Text

AB299,16,3 (b) Merge with one or more in-state Wisconsin credit unions.

AB299, s. 31 Section 31. 186.41 (4) (intro.), (a) to (d) and (f) of the statutes are amended to read:

AB299,16,7 186.41 (4) Limitations. (intro.) A regional An out-of-state credit union may not take any action under sub. (3) until all of the following conditions have been met:

AB299,16,11 (a) The office of credit unions finds that the statutes of the regional state in which the regional out-of-state credit union has its principal office permit in-state Wisconsin credit unions to both acquire regional out-of-state credit union assets and merge with one or more regional out-of-state credit unions in the regional that state.

AB299,16,14 (b) The office of credit unions has not disapproved the acquisition of in-state Wisconsin credit union assets or the merger with the in-state Wisconsin credit union under sub. (5).

AB299,16,23 (c) The office of credit unions gives a class 3 notice, under ch. 985, in the official state newspaper, of the application to take an action under sub. (3) and of the opportunity for a hearing and, if at least 25 residents of this state petition for a hearing within 30 days of the final notice or if the office of credit unions on its own motion calls for a hearing within 30 days of the final notice, the office of credit unions holds a public hearing on the application, except that a hearing is not required if the office of credit unions finds that an emergency exists and that the proposed action under sub. (3) is necessary and appropriate to prevent the probable failure of an in-state a Wisconsin credit union that is closed or in danger of closing.

AB299,17,2 (d) The office of credit unions is provided a copy of any original application seeking approval by a federal agency of the acquisition of in-state Wisconsin credit union assets or of the merger with an in-state a Wisconsin credit union and of any supplemental material or amendments filed with the application.

AB299,17,5 (f) With regard to an acquisition of assets of an in-state a Wisconsin credit union that is chartered on or after May 9, 1986, the in-state Wisconsin credit union has been in existence for at least 5 years before the date of acquisition.

AB299, s. 32 Section 32. 186.41 (5) (a), (b), (c) and (cr) of the statutes are amended to read:

AB299,17,10 186.41 (5) (a) Considering the financial and managerial resources and future prospects of the applicant and of the in-state Wisconsin credit union concerned, the action would be contrary to the best interests of the members of the in-state Wisconsin credit union.

AB299,17,13 (b) The action would be detrimental to the safety and soundness of the applicant or of the in-state Wisconsin credit union concerned, or to a subsidiary or affiliate of the applicant or of the in-state Wisconsin credit union.

AB299,17,18 (c) Because the applicant, its executive officers, or directors 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 creditors, the members or, the other customers of the applicant or of the in-state , the Wisconsin credit union, or contrary to the best interests of the public.

AB299,17,22 (cr) The applicant has failed to propose to provide adequate and appropriate services of the type contemplated by the community reinvestment act of 1977 in the community in which the in-state Wisconsin credit union which the applicant proposes to acquire or merge with is located.

AB299, s. 33 Section 33. 186.41 (6) (a) of the statutes is renumbered 186.41 (6).

AB299, s. 34 Section 34. 186.41 (6) (b) of the statutes is repealed.

AB299, s. 35 Section 35. 186.41 (8) of the statutes is repealed.

AB299, s. 36 Section 36. 186.45 of the statutes is created to read:

AB299,18,3 186.45 Non-Wisconsin credit union, Wisconsin offices. (1) Definitions. In this section:

AB299,18,5 (a) "Non-Wisconsin credit union" means a credit union organized under the laws of and with its principal office located in a state other than this state.

AB299,18,6 (b) "Wisconsin credit union" has the meaning given in s. 186.41 (1) (bm).

AB299,18,11 (2) Approval. A non-Wisconsin credit union may open an office and conduct business as a credit union in this state if the office of credit unions finds that Wisconsin credit unions are allowed to do business in the other state under conditions similar to those contained in this section and that all of the following apply to the non-Wisconsin credit union:

AB299,18,13 (a) It is a credit union organized under laws similar to the credit union laws of this state.

AB299,18,14 (b) It is financially solvent based upon national board ratings.

AB299,18,15 (c) It has member savings insured with federal share insurance.

AB299,18,17 (d) It is effectively examined and supervised by the credit union authorities of the state in which it is organized.

AB299,18,19 (e) It has received approval from the credit union authorities of the state in which it is organized.

AB299,18,21 (f) It has a need to place an office in this state to adequately serve its members in this state.

AB299,18,23 (g) It meets all other relevant standards or qualifications established by the office of credit unions.

AB299,18,25 (3) Requirements. A non-Wisconsin credit union shall agree to do all of the following:

AB299,19,2 (a) Grant loans at rates not in excess of the rates permitted for Wisconsin credit unions.

AB299,19,3 (b) Comply with this state's laws.

AB299,19,4 (c) Designate and maintain an agent for the service of process in this state.

AB299,19,8 (4) Records. As a condition of a non-Wisconsin credit union doing business in this state under this section, the office of credit unions may require copies of examination reports and related correspondence regarding the non-Wisconsin credit union.

AB299, s. 37 Section 37. 186.80 of the statutes is created to read:

AB299,19,11 186.80 False statements. (a) No officer, director, or employee of a credit union may do any of the following:

AB299,19,13 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.

AB299,19,15 2. Knowingly subscribe to or exhibit false information with the intent to deceive any person authorized to examine the affairs of the credit union.

AB299,19,17 3. Knowingly make, state, or publish any false report or statement of the credit union.

AB299,19,19 (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.

AB299, s. 38 Section 38. 220.04 (9) (a) 2. of the statutes is amended to read:

AB299,19,23 220.04 (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.

AB299, s. 39 Section 39. 220.14 (5) of the statutes is created to read:

AB299,20,2 220.14 (5) Contain a statement of the total number of orders issued by the division during the year under s. 222.0203 (2).

AB299, s. 40 Section 40. Chapter 222 of the statutes is created to read:

AB299,20,5 CHAPTER 222 UNIVERSAL BANKS

AB299,20,7 Subchapter I General Provisions

AB299,20,9 222.0101 Title. This chapter may be cited as the "Wisconsin universal bank law."

AB299,20,10 222.0102 Definitions. In this chapter:

AB299,20,13 (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:

AB299,20,18 (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.

AB299,20,23 (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.

AB299,21,2 (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.

AB299,21,3 (3) "Division" means the division of banking.

AB299,21,6 (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.

AB299,21,8 (5) "Universal bank" means a financial institution that has been issued a certificate of authority under s. 222.0205.

AB299,21,9 (6) "Well-capitalized" has the meaning given in 12 USC 1831o (b) (1) (A).

AB299,21,14 222.0103 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.

AB299,21,19 (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.

AB299,21,23 (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.

AB299,22,3 222.0105 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.

AB299,22,5 222.0107 Administration. (1) Powers of division. The division shall administer this chapter for all universal banks.

AB299,22,10 (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.

AB299,22,12 SUBCHAPTER II Certification

AB299,22,17 222.0201 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.

AB299,22,23 (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.

AB299,23,3 222.0203 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:

AB299,23,6 (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.

AB299,23,7 (b) The financial institution is well-capitalized.

AB299,23,12 (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.

AB299,23,16 (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.

AB299,23,21 (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.

AB299,24,2 (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.

AB299,24,9 (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.

AB299,24,13 222.0205 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.

AB299,24,22 222.0207 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.

AB299,24,24 SUBCHAPTER III ORGANIZATION

AB299,25,5 222.0301 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.

AB299,25,12 222.0303 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.

AB299,25,15 (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:

AB299,25,17 (a) The name of every other financial institution organized under the laws of this state.

AB299,25,19 (b) The name of every national bank or foreign bank authorized to transact business in this state.

AB299,25,23 (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.

AB299,26,3 (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:

AB299,26,4 1. Merged with the other institution.

AB299,26,5 2. Been formed by reorganization of the other institution.

AB299,26,7 3. Acquired all or substantially all of the assets, including the name, of the other institution.

AB299,26,10 222.0305 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.

AB299,26,12 (2) Certain asset requirements. Section 214.045 does not apply to universal banks.

AB299,26,19 222.0307 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.