Chapter 214

214.495(1) (1) A mortgage taken and recorded by a savings bank shall have priority over all liens, except tax and special assessment liens and liens under ss. 292.31 (8) (i) and 292.81, upon the mortgaged premises and the buildings and improvements thereon, that are filed after the recording of the mortgage.

214.495(2) (2) Any additional advance made to a borrower, if the mortgage and mortgage note provides for additional advances, may not exceed an amount specified in the mortgage.

214.495 History History: 1991 a. 221; 1993 a. 453; 1995 a. 227; 1997 a. 27.

214.50 214.50 General loan contract provisions. A loan and an agreement for securing the loan shall be evidenced by one or more written instruments, consistent with sound lending practices. A savings bank shall record an instrument if it is necessary to establish priority over the claim of any 3rd party.

214.50 History History: 1991 a. 221.

214.502 214.502 Nonconforming loans. Notwithstanding s. 214.48 (3), a savings bank may make loans secured by real property used primarily for residential or farming purposes, even if those loans do not comply with one or more of the requirements under those provisions, if the total amount of loans made under this section does not exceed 5 percent of the savings bank’s total assets.

214.502 History History: 1997 a. 144.

214.505 214.505 Modification agreements. Except as provided in a loan contract, a savings bank may enter into a written agreement with a borrower to modify the terms of a loan that describe the amount, time or method of the payments, the interest rate or any other provision of the loan contract. The loan contract, security instrument and lien priority are not affected by the modification, even if the modification was not provided for in the loan contract, unless the modification increases the total amount to be loaned under the loan contract.

214.505 History History: 1991 a. 221.

214.507 214.507 Customer access to credit reports. If requested by an individual who is a customer, loan applicant or credit applicant, a financial institution, as defined in s. 705.01 (3), shall provide that individual, at no additional charge, with a copy of any written credit report which is held by the financial institution, which relates to that individual and for which a fee is imposed.

214.507 History History: 1993 a. 425.

214.509 214.509 Record search. A savings 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 or unless the person seeking the production is a government unit, as defined in s. 108.02 (17). The expenses and costs shall be paid by persons seeking such production. If a savings bank is entitled to reimbursement under this section, a savings 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 savings bank, are paid or unless payment is tendered to the savings bank in cash or by certified check or draft.

214.509 History History: 1995 a. 336.

214.51 214.51 Sale, assignment, and servicing of loans and contracts.

214.51(1) (1) A savings bank may sell a loan or a participating interest in a loan with or without recourse. The division may by rule adopt limitations on the sale of loans except loans sold to agencies of the United States or this state or to another government-sponsored agency if approved by the division.

214.51(2) (2) A savings bank may contract to service a loan or a participating interest in a loan, subject to rules of the division.

214.51(3) (3) A savings bank may sell and assign, with or without recourse, any certificate of sale, defaulted loan or defaulted real estate contract to any person eligible to purchase it.

214.51 History History: 1991 a. 221; 1995 a. 27.

214.515 214.515 Purchase of real estate at forced sale. A savings bank may purchase at any sheriff’s or other judicial sale any real estate upon which the savings bank has any mortgage, lien or other encumbrance, or in which the savings bank has any other interest. The savings bank may repair, insure, improve, sell, lease, preserve, mortgage or dispose of that real estate.

214.515 History History: 1991 a. 221.

214.515 Cross-reference Cross-reference: See also ch. DFI-SB 11, Wis. adm. code.

214.52 214.52 Purchase of real estate for office and rental purposes.

214.52(1) (1) A savings bank may acquire and hold real estate on which a building exists or may be built that is suitable for the transaction of the savings bank’s business. A savings bank may own all or part of the stock, shares or interest in a corporation, limited liability company, association or trust engaged solely in holding all or part of that real estate. A savings bank may derive rents from any portion of a building not required for the savings bank’s own use.

214.52(2) (2) The amount invested under sub. (1) may not exceed 100 percent of a savings bank’s capital.

214.52(3) (3) Unless prior written approval of the division is obtained, a savings bank may not purchase, lease or acquire a site for an office building or an interest in real estate from an officer, director, employee, from a stockholder holding more than 10 percent of the stock of the savings bank, or from any firm, corporation, entity, or family in which an officer, director, employee or stockholder holding more than 10 percent of the stock of a savings bank has a direct or indirect interest.

214.52 History History: 1991 a. 221; 1993 a. 112; 1995 a. 27.

214.525 214.525 Prohibited loans. A savings bank may not make a loan to a person owning 10 percent or more of its stock, an affiliated person, agent, or attorney of the savings bank, either individually or as an agent or partner of another, except under rules of the division and regulations of a deposit insurance corporation.

214.525 History History: 1991 a. 221; 1995 a. 27.

214.525 Cross-reference Cross-reference: See also s. DFI-SB 3.06, Wis. adm. code.

214.53 214.53 Effect of unauthorized investments.

214.53(1) (1) If a savings bank makes a loan or other investment that is not authorized under this subchapter, it shall be due and payable according to its terms and the obligation of the loan is not impaired.

214.53(2) (2) A director or officer of a savings bank may not knowingly participate in or assent to, or knowingly permit an officer, employee or agent of the savings bank to make, an investment that is not authorized by this subchapter.

214.53(3) (3) The division may require a director or officer of a savings bank who knowingly participates in or assents to, or who knowingly permits an officer, employee or agent of the savings bank to make, an investment that is not authorized by this subchapter to obtain an indemnity bond, insurance, or collateral sufficient to indemnify the savings bank against damages that the savings bank may sustain as a result of the investment. If an unauthorized investment, the amount considered sufficient to indemnify the savings bank shall be the difference between the book value and the market value of the investment at the time the division determines that the investment is unauthorized. If an unauthorized loan, the amount considered sufficient to indemnify the savings bank shall be the difference between the book value of the loan and the amount of the loan that could have been made under this subchapter. If an unauthorized investment is sold or disposed of without recourse, the division shall release all or part of the indemnity after deducting any loss. If the balance of an unauthorized loan is reduced to an amount that would permit the loan to be made under this subchapter, the indemnity shall be released. In making a determination under this subsection, the division may order an independent appraisal at the savings bank’s expense.

214.53 History History: 1991 a. 221; 1995 a. 27.

214.54 214.54 Loans to one borrower.

214.54(1) (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 20 percent of the savings bank’s capital.

214.54(2) (2) Total outstanding loans and extensions of credit, both direct and indirect, made by a savings bank to a single person may exceed the 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 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.

214.54(3) (3) Notwithstanding subs. (1) and (2), a savings bank may make loans to one borrower under any of the following circumstances:

214.54(3)(a) (a) For any purpose if the total amount loaned does not exceed $500,000.

214.54(3)(b) (b) To develop domestic residential housing units if the total amount loaned does not exceed the lesser of $30,000,000 or 30 percent of the savings bank’s capital and if all of the following conditions are met:

214.54(3)(b)1. 1. The purchase price of each single-family dwelling unit in a development financed under this paragraph does not exceed $500,000.

214.54(3)(b)2. 2. The savings bank is in compliance with the capital requirements under s. 214.43.

214.54(3)(b)3. 3. Loans made under this paragraph to all borrowers do not, in aggregate, exceed 150 percent of the savings bank’s capital.

214.54(3)(b)4. 4. Loans under this paragraph comply with all applicable loan-to-value requirements.

214.54(4) (4) A savings bank’s loans to one borrower to finance the sale of real property acquired in satisfaction of debts may not exceed 50 percent of the savings bank’s capital.

214.54(5) (5) A loan or extension of credit granted to one person, the proceeds of which are used for the direct benefit of a 2nd person, shall be considered to be a loan or extension of credit to the 2nd person as well as the first person.

214.54(6) (6) The total liabilities of a partnership, pool, syndicate or joint venture shall include the liabilities of the members of the entity.

214.54(7) (7) For a loan authorized under sub. (2), a savings bank shall institute procedures to ensure that collateral fully secures an outstanding loan or extension of credit at all times.

214.54(8) (8) If collateral values fall below 100 percent of an outstanding balance of a loan or extension of credit to the extent that the loan or extension of credit does not comply with subs. (1) and (2), the savings bank shall bring the loan into conformance within 15 business days unless a judicial proceeding or other extraordinary occurrence prevents the savings bank from taking action.

214.54(9) (9) This section does not apply to loans or extensions of credit to the United States or its agencies or to this state or its agencies.

214.54 History History: 1991 a. 221; 1995 a. 27; 2017 a. 340.

214.545 214.545 Rules. The division shall promulgate rules to determine permissible levels of investment and permissible concentrations of assets for savings banks that apply to all lending and investment authority under this subchapter. The rules shall give due regard to capital adequacy, operating income, underwriting standards, risk inherent in the investment or loan, and competitive parity with other financial institutions.

214.545 History History: 1991 a. 221; 1995 a. 27.

subch. VIII of ch. 214 SUBCHAPTER VIII

DEPOSIT ACCOUNTS

214.57 214.57 Deposit accounts. A savings bank may establish deposit accounts. Deposit accounts shall be payable without notice, unless the contract of deposit provides otherwise.

214.57 History History: 1991 a. 221.

214.575 214.575 Deposit accounts subject to liens.

214.575(1) (1) A deposit account shall be subject to a lien for the payment of charges that may accrue on the account under this chapter.

214.575(2) (2) A deposit account shall be subject to a debt offset for the debts of the deposit account holder to the savings bank.

214.575(3) (3) Deposit accounts may not be assessed for any debts or losses of the savings bank.

214.575 History History: 1991 a. 221.

214.58 214.58 Payment of interest.

214.58(1) (1) The board of directors shall determine the rate and amount of interest to be paid on or credited to deposit accounts. The board of directors may establish reasonable classifications of accounts based on the types of accounts, the length of time accounts are continued in effect, the size of initial deposits into accounts, the minimum balances of accounts required for payment of interest, the frequency and extent of the activity on accounts, or on other classifications the division may approve.

214.58(2) (2) The board of directors shall determine by resolution the method of calculating the amount of interest on deposit accounts and the date on which interest is to be paid or credited.

214.58 History History: 1991 a. 221; 1995 a. 27.

214.585 214.585 Holders of deposit accounts. Deposit accounts may be held as follows:

214.585(1) (1) By an individual in his or her own right, regardless of age, or by 2 or more individuals.

214.585(2) (2) By a fiduciary if authorized by law.

214.585(3) (3) By a government or governmental instrumentality if authorized by law.

214.585(4) (4) By a corporation or other person.

214.585(5) (5) In any other form receiving the prior written approval of the division.

214.585 History History: 1991 a. 221; 1995 a. 27.

214.59 214.59 Prohibited activities.

214.59(1) (1) A savings bank may not participate, directly or indirectly, in the sale or transfer of any equity or debt security or instrument of an affiliate, its parent savings bank holding company or an affiliate of the savings bank holding company.

214.59(2) (2) A shareholder, director, officer, employee or agent of the savings bank may not participate, directly or indirectly, in any sale or transfer described in sub. (1), nor may that person allow any other person to do so at an office of the savings bank or any office of the savings bank’s subsidiaries or service corporations.

214.59 History History: 1991 a. 221.

214.592 214.592 Financially related services tie-ins. In any transaction conducted by a savings bank, a savings bank holding company, or a subsidiary of either with a customer who is also a customer of any other subsidiary of any of them, the customer shall be given a notice in 12-point boldface type in substantially the following form:

NOTICE OF RELATIONSHIP

This company, .... (insert name and address of savings bank, savings bank holding company, or subsidiary), is related to .... (insert name and address of savings bank, savings bank holding company, or subsidiary) of which you are also a customer. You may not be compelled to buy any product or service from either of the above companies or any other related company in order to participate in this transaction.

If you feel that you have been compelled to buy any product or service from either of the above companies or any other related company in order to participate in this transaction, you should contact the management of either of the above companies at either of the above addresses or the division of banking at .... (insert address).

214.592 History History: 1991 a. 221; 1995 a. 27; 1999 a. 9; 2003 a. 33.

214.595 214.595 Savings promotion prize programs.

214.595(1) (1) In this section:

214.595(1)(a) (a) “Nonqualifying account” means a deposit account, other than a demand account, that is not a qualifying account.

214.595(1)(b) (b) “Qualifying account” means a deposit account, other than a demand account, through which a savings bank’s depositors may obtain chances to win prizes in a savings promotion.

214.595(1)(c) (c) “Savings promotion” means a contest or promotion to encourage savings deposits that is sponsored by one or more savings banks, or by a banking trade association or its subsidiary in conjunction with one or more savings banks, and in which savings bank depositors are offered a chance to win designated prizes.

214.595(2) (2) A savings bank may sponsor, or participate in, a savings promotion if all of the following requirements are satisfied:

214.595(2)(a) (a) Savings bank depositors are not required to pay any fee or otherwise provide any consideration in order to enter the savings promotion.