SB686: Bill Text

Current law provides certain powers for the liquidator in a liquidation proceeding, including the power to enter into contracts as necessary to carry out the liquidation and the power to affirm or disavow any contracts to which the insurer is a party. Also in a liquidation proceeding, if one of the specified conditions is met, a liquidator may avoid a preference and recover property or its value. A “preference” is a transfer of an insurer's property to or for the benefit of a creditor based on a preexisting debt if the transfer is made within one year before the liquidation petition and the transfer's effect is to enable the creditor to obtain a greater percentage of his or her debt than another creditor of the same class.

This bill provides that a liquidator does not have the power to disavow any Federal Home Loan Bank security agreement or similar arrangement, and may not avoid any transfer of money or property in connection with any Federal Home Loan Bank security agreement or similar arrangement, except that a transfer may be avoided if it was made with actual intent to hinder, delay, or defraud creditors.

Exemption from overtime pay requirements for outside salespersons

The FLSA currently provides an exemption from the minimum wage and overtime pay provisions of the FLSA for employees employed as outside salespersons, as defined under the Code of Federal Regulations. Rules promulgated by DWD currently provide an exemption from state overtime pay provisions for outside salespersons who spend 80 percent of their time away from the employer's place of business.

The bill modifies the administrative rule provision to conform the state exemption for outside salespersons to the exemption under the FLSA. Specifically, the bill provides that the state exemption applies to an employee 1) whose primary duty is either making sales or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer, and 2) who is customarily and regularly engaged away from the employer's place of business in performing that primary duty.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

SB686,1 Section 1 . 34.07 of the statutes is amended to read:

SB686,4,7 34.07 Security. A surety bond or other security, including an irrevocable letter of credit issued by a federal home loan bank, state bank, national bank, federal or state savings bank, federal or state credit union, or federal or state savings and loan association, may be required of or given by any public depository for any public deposits that exceed the amount of deposit insurance provided by an agency of the United States and the coverage provided under s. 34.08 (2).

SB686,2 Section 2 . 138.052 (5) (am) 1. of the statutes is amended to read:

SB686,5,8 138.052 (5) (am) 1. Except as provided in par. (b) and unless the escrow funds are held by a 3rd party in a noninterest-bearing account, a bank, credit union, savings bank, savings and loan association or mortgage banker which originates a loan on or after January 1, 1994, and before the effective date of this subdivision .... [LRB inserts date], or a loan subject to subd. 3., and which requires an escrow to assure the payment of taxes or insurance shall pay interest on the outstanding principal balance of the escrow at the variable interest rate established under subd. 2.

SB686,3 Section 3. 186.235 (7) (b) 4. of the statutes is created to read:

SB686,5,15 186.235 (7) (b) 4. Furnish to a federal home loan bank, upon request, a copy of any examination report made by, or other supervisory information created by, the office of credit unions of any credit union, if the federal home loan bank agrees to treat the information received under this subdivision with the same degree of confidentiality that is required of employees of the office of credit unions under par. (a).

SB686,4 Section 4 . 186.235 (16) (a) of the statutes is amended to read:

SB686,5,25 186.235 (16) (a) Except as provided in par. (b), at least once every 18 months, the office of credit unions shall examine the records and accounts of each credit union. For that purpose the office of credit unions shall have full access to, and may compel the production of, each credit union's records and accounts. The office of credit unions may administer oaths to and examine each credit union's officers and agents. In conducting examinations under this paragraph, the office of credit unions may accept and rely on information collected by other agencies or independent 3rd parties in determining whether a credit union has satisfied any requirement that is part of the examination.

SB686,5 Section 5. 214.54 (1) of the statutes is amended to read:

SB686,6,5 214.54 (1) Except as provided in sub. (2) and s. 214.49 (4), the total of outstanding loans and extensions of credit, both direct and indirect, made by a savings bank to a single person shall be subject to limits established by rule of the division, but may not exceed 15 20 percent of the savings bank's capital.

SB686,6 Section 6 . 214.54 (2) of the statutes is amended to read:

SB686,6,12 214.54 (2) Total outstanding loans and extensions of credit, both direct and indirect, made by a savings bank to a single person may exceed the 15 20 percent limit under sub. (1), but may not exceed 25 percent of the savings bank's capital, if all loans or extensions of credit that exceed the 15 20 percent limit are at least 100 percent secured by readily marketable collateral having a market value that may be determined by reliable and continuously available price quotations.

SB686,7 Section 7 . 214.725 (3) (intro.) of the statutes is amended to read:

SB686,6,15 214.725 (3) (intro.) An Subject to sub. (3m), an examination shall include a review of all of the following:

SB686,8 Section 8 . 214.725 (3m) of the statutes is created to read:

SB686,6,20 214.725 (3m) In conducting examinations under sub. (1) (a), the division may accept and rely on information collected by other agencies or independent 3rd parties in determining whether a savings bank has satisfied any requirement that is part of the examination.

SB686,9 Section 9. 214.755 (1) (f) of the statutes is created to read:

SB686,6,23 214.755 (1) (f) A federal home loan bank if the federal home loan bank agrees to keep the information confidential.

SB686,10 Section 10. 215.02 (6) (a) 7. of the statutes is created to read:

SB686,7,4 215.02 (6) (a) 7. The division may furnish to a federal home loan bank a copy of any examination report made by, or other supervisory information created by, the division of any association if the federal home loan bank agrees to keep the examination report or other information confidential.

SB686,11 Section 11 . 215.03 (2) (a) of the statutes is amended to read:

SB686,7,16 215.03 (2) (a) Except as provided in par. (b), at least once within every 18-month period, the division shall examine the cash, bills, collaterals, securities, assets, books of account, condition and affairs of all such associations and for that purpose the division or the division's examiners shall have access to, and may compel the production of, all their books, papers, securities and moneys, administer oaths to and examine their officers and agents as to their affairs. In conducting examinations under this paragraph, the division may accept and rely on information collected by other agencies or independent 3rd parties in determining whether an association has satisfied any requirement that is part of the examination. An employee of the division may not examine an association in which the employee is interested as an officer or director.

SB686,12 Section 12 . 220.04 (1) (a) of the statutes is amended to read:

SB686,8,4 220.04 (1) (a) The division shall examine at least once every 18 months the cash, bills, collaterals, securities, assets, books of account, condition and affairs of each bank and trust company bank doing business in this state, except national banks. For that purpose the division may examine on oath any of the officers, agents, directors, clerks, stockholders, customers or depositors thereof, touching the affairs and business of such institution. In conducting examinations under this paragraph, the division may accept and rely on information collected by other agencies or independent 3rd parties in determining whether a bank or trust company bank has satisfied any requirement that is part of the examination. In making such examinations of banks, the division shall determine the fair valuation of all assets in accordance with the schedules, rules and regulations prescribed by the banking review board.

SB686,13 Section 13. 220.06 (1m) of the statutes is amended to read:

SB686,8,25 220.06 (1m) No division employee may examine a bank or licensee in which that person is interested as a stockholder, officer or employee. No division employee may examine a bank or licensee located in the same village, city or county with any bank or licensee in which that person is so interested. Employees in the division, and each member and employee of the banking review board, shall keep secret all facts and information obtained in the course of examinations or from reports not under s. 221.1002 (1) filed by a bank or licensee with the division, except so far as the public duty of the person requires reporting upon or taking special action regarding the affairs of any bank or licensee, and except when called as a witness in any criminal proceeding or trial in a court of justice. The division may furnish to the federal deposit insurance corporation, to a federal home loan bank, or to any regulatory authority for state or federal financial institutions, insurance or securities a copy of any examination made of any such bank or licensee or of any report made by such bank or licensee and may give access to and disclose to the corporation or to any regulatory authority for state or federal financial institutions, insurance or securities any information possessed by the division, or to a federal home loan bank any information created by the division, with reference to the conditions or affairs of any such insured bank or licensee if the regulatory authority agrees to treat all information received with the same degree of confidentiality as applies to reports of examination that are in the custody of the division.

SB686,14 Section 14. 221.0328 (4) of the statutes is created to read:

SB686,9,9 221.0328 (4) Reduction of capital. Subject to the approval of the division, and subject to ss. 221.0211 (4) and 221.0323 (1) and (2), a bank may, by a vote of shareholders owning, in the aggregate, at least two-thirds of its capital stock, reduce its capital. Notwithstanding sub. (2) and subject to ss. 221.0216 (5) and 221.0327, as part of its capital reduction plan approved by the division in accordance with this subsection, and with the affirmative vote of shareholders owning at least two-thirds of the shares of each class of its stock outstanding, a bank may distribute cash or other assets to its shareholders.

SB686,15 Section 15 . 223.105 (3) (a) of the statutes is amended to read:

SB686,9,21 223.105 (3) (a) To assure compliance with such rules as may be established under s. 220.04 (7), the division of banking and the office of credit unions shall, at least once every 18 months, examine the fiduciary operations of each organization which is under its respective jurisdiction and is subject to examination under sub. (2). If a particular organization subject to examination under sub. (2) is not otherwise under the jurisdiction of one of the foregoing agencies, such examination shall be conducted by the division of banking. In conducting examinations under this paragraph, the division of banking or office of credit unions may accept and rely on information collected by other agencies or independent 3rd parties in determining whether an organization has satisfied any requirement that is part of the examination.

SB686,16 Section 16 . 645.05 (3) of the statutes is created to read:

SB686,9,25 645.05 (3) No injunction against a federal home loan bank. Notwithstanding subs. (1) and (2) and any other provision of this chapter, no federal home loan bank may be stayed, enjoined, or prohibited from exercising or enforcing any right or cause of action regarding collateral pledged under any security agreement, or any pledge, security, collateral, or guarantee agreement, or any other similar arrangement or credit enhancement relating to a federal home loan bank security agreement.

SB686,17 Section 17 . 645.46 (11) of the statutes is renumbered 645.46 (11) (a) and amended to read:

SB686,10,8 645.46 (11) (a) Enter Subject to par. (b), enter into such contracts as are necessary to carry out the order to liquidate, and affirm or disavow any contracts to which the insurer is a party.

SB686,18 Section 18 . 645.46 (11) (b) of the statutes is created to read:

SB686,10,14 645.46 (11) (b) Notwithstanding any other provision of this chapter, no liquidator has the power to disavow any federal home loan bank security agreement, or any pledge, security, collateral, or guarantee agreement, or any other similar arrangement or credit enhancement relating to a federal home loan bank security agreement.

SB686,19 Section 19 . 645.54 (1) (b) 3. of the statutes is created to read:

SB686,10,23 645.54 (1) (b) 3. Notwithstanding any other provision of this chapter, no liquidator may avoid any transfer of, or any obligation to transfer, money or any other property arising under or in connection with any federal home loan bank security agreement, or any pledge, security, collateral, or guarantee agreement, or any other similar arrangement or credit enhancement relating to a federal home loan bank security agreement. However, a transfer may be avoided under this paragraph if it was made with actual intent to hinder, delay, or defraud either existing or future creditors.

SB686,20 Section 20 . DWD 274.04 (2) of the administrative code is repealed and recreated to read:

SB686,11,1 DWD 274.04 (2) An employee who meets all of the following conditions:

SB686,11,3 (a) The employee's primary duty, as determined under 29 CFR 541.500 (b), is any of the following:

SB686,11,4 1. Making sales, as defined under 29 USC 203 (k).

SB686,11,6 2. Obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer.

SB686,11,9 (b) The employee is customarily and regularly engaged away from the employer's place of business, as described under 29 CFR 541.502, in performing the employee's primary duty described under par. (a).

SB686,21 Section 21 . Effective dates. This act takes effect on the day after publication, except as follows:

SB686,11,13 (1) The treatment of section DWD 274.04 (2) of the administrative code takes effect as provided in section 227.265 of the statutes.

SB686,11,14 (End)