Chapter 214

214.82(1)(b) (b) The savings bank’s books and records, after at least 2 consecutive notices from the division spanning at least 2 consecutive calendar quarters, are in an inaccurate and incomplete condition to the extent that the division is unable to determine the financial condition of the savings bank or the details or purpose of any transaction that may materially affect the savings bank’s financial condition.

214.82(1)(c) (c) The savings bank fails to meet its capital requirement and may not meet its requirements or restore its capital without assistance from its deposit insurance corporation.

214.82(1)(d) (d) The savings bank is insolvent in that its assets are less than its obligations to its creditors, including its depositors.

214.82(1)(e) (e) The savings bank has experienced substantial dissipation of assets due to a violation of a state or federal law, regulation, rule or order of the division or due to any unsafe or unsound practice.

214.82(1)(f) (f) There is a likelihood that the savings bank will not be able to meet the demands of its depositors or pay its obligations in the normal course of business.

214.82(1)(g) (g) Losses have occurred or are likely to occur that have or will deplete all or substantially all of the savings bank’s capital and that there is no reasonable prospect for restoring its capital without federal assistance.

214.82(1)(h) (h) The savings bank or its officers, directors or employees are violating a state or federal law, regulation, rule or supervisory order of the division or of another regulatory authority.

214.82(1)(i) (i) The savings bank is in an unsafe or unsound condition likely to cause insolvency or a substantial dissipation of assets or earnings that will weaken the condition of the savings bank and will prejudice the interests of its depositors.

214.82(1)(j) (j) The directors, officers, trustees or liquidators have neglected, failed or refused to take any action that the division considers necessary for the protection of the savings bank, including production of an annual audit report after 2 requests were made, have continued to maintain the savings bank’s books and records in an inaccurate and incomplete condition for 2 consecutive quarters after 2 notices from the division or have impeded or obstructed an examination.

214.82(1)(k) (k) The deposit accounts of the savings bank are impaired to the extent that the realizable value of its assets is insufficient to pay in full its creditors and deposit accounts holders or meet its obligations in the normal course of business or that its stock is impaired.

214.82(1)(L) (L) The savings bank is unable to continue operation.

214.82(1)(m) (m) The business of the savings bank or savings bank in liquidation is being conducted in a fraudulent, illegal or unsafe or unsound manner.

214.82(1)(n) (n) The officers, employees, trustees or liquidators assume duties or perform acts without providing a bond.

214.82(2) (2) The division may postpone taking custody of a savings bank pending a satisfactory resolution of the condition permitting custody as suggested by the deposit insurance corporation, if the savings bank has sufficient liquidity and has adopted and implemented an operating plan considered prudent by the division.

214.82(3) (3) The division shall promulgate rules to govern the determination of a need for a conservator, the selection and appointment of a conservator and the conduct of a conservatorship, including allocation of the payment of costs.

214.82 History History: 1991 a. 221, 315; 1995 a. 27; 2011 a. 182.

214.825 214.825 Purposes of taking custody. The purposes of taking custody of a savings bank may include examination; production of an audit report or audited financial statement; reconstruction of books and records; conservation of assets; restoration of impaired capital; the making of any necessary or equitable adjustment, including changes in officers and management, considered necessary by the division under any plan of reorganization or liquidation; restructuring of the savings bank through a merger or formation of an interim institution; establishment of a conservatorship to operate and manage a savings bank as an ongoing concern until the grounds for custody and conservatorship are remedied; or the maturing of an obligation of the deposit insurance corporation.

214.825 History History: 1991 a. 221; 1995 a. 27; 1997 a. 35; 2011 a. 182.

214.83 214.83 Division’s powers during custody. During the period in which the division has custody of a savings bank, the division shall have all powers necessary to accomplish the purposes of custody of the savings bank and the authority to call meetings of the members, stockholders, former officers and directors, liquidators or trustees to consider and act upon matters considered by the division to be of sufficient importance to obtain the views of those persons.

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

214.835 214.835 Custody of savings banks. If the division takes custody of a savings bank, in addition to powers conferred under ss. 214.825 and 214.83, the division may do any of the following:

214.835(1) (1) Notify the deposit insurance corporation of the custody and the reasons for that action, including a copy of the division’s report of examination and condition of the savings bank, and to appoint the deposit insurance corporation or its designee as receiver or conservator for the savings bank.

214.835(2) (2) Permit the deposit insurance corporation to submit any plan or proposal for the reorganization, merger or liquidation of the savings bank that it considers to be feasible.

214.835(3) (3) Determine and declare the savings bank to be in default, find from the division’s examination and from reports of the savings bank the amount of insured deposits and make any necessary orders that may be required for the purpose of making deposit insurance available to depositors.

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

214.84 214.84 Notice of custody; action to enjoin. On the date the division takes custody of a savings bank, the division shall provide by 1st class mail a written notice of that action to the president or secretary and to 2 or more directors of the savings bank or to 2 or more of the trustees of any trust or to 2 or more of the liquidators if the savings bank is in liquidation. If the parties receiving notice believe the division does not have authority to take custody, the savings bank, the directors or officers of the savings bank or the trustees or liquidators, within 20 days after the mailing of the notice, or within further periods of time as the division may extend up to an additional 60 days, may file a complaint in the circuit court of the county in which the savings bank is located to enjoin custody. The court shall require the division to show cause why custody should not be enjoined. If, upon hearing, the court finds that grounds do not exist for the division’s custody, it may enter an order enjoining further custody.

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

214.845 214.845 Segregation of collections during custody. All payments received on deposit accounts on depositors’ unpledged accounts during custody of the savings bank shall be segregated in a separate account until the savings bank is redelivered to the directors, trustees or liquidators or delivered to a conservator or receiver. A depositor whose payments have been segregated may request the return of those payments and the division shall repay them without interest or dividends. Before delivery of the savings bank or its assets to any trustee, liquidator, receiver or conservator, the division shall return the money segregated in the separate account.

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

214.85 214.85 Redelivery of possession. If, after examination of the savings bank and consideration of all conditions affecting its affairs, the division finds that the cause for taking custody has been removed, the division shall relinquish custody of the savings bank, remove any conservator appointed and redeliver the savings bank and all assets, books and records to its qualified directors, trustees or liquidators.

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

214.855 214.855 Limitations upon custody. The custody of a savings bank by the division, including a conservatorship, may be continued for a reasonable period not to exceed 12 months, unless a longer time period is approved by a vote of two-thirds of the directors of the savings bank or ordered by a court.

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

subch. XII of ch. 214 SUBCHAPTER XII

ENFORCEMENT POWERS

214.90 214.90 Action to correct conditions. The division may issue an order requiring a savings bank, savings bank subsidiary, service corporation, affiliate, savings bank holding company or a party affiliated with a savings bank to take action to correct any condition resulting from a violation or practice identified in the order. The division may by order require the savings bank, savings bank subsidiary, service corporation, affiliate, savings bank holding company or party affiliated with a savings bank to do any of the following:

214.90(1) (1) Make restitution or provide reimbursement, indemnification or guarantees for or against losses if any of the following conditions occurs:

214.90(1)(a) (a) The person was unjustly enriched or received direct or indirect personal benefit in connection with the violation or practice.

214.90(1)(b) (b) The violation or practice involved a reckless disregard for applicable state or federal laws, regulations, rules or orders of the division or other appropriate regulator.

214.90(2) (2) Restrict the savings bank’s growth or institute appropriate operating restrictions.

214.90(3) (3) Dispose of any loan or asset involved.

214.90(4) (4) Rescind an agreement or contract.

214.90(5) (5) Submit candidates for future directors, employees or officers to the division for approval.

214.90(6) (6) Take any other action the division considers necessary.

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

214.905 214.905 Books and records corrective orders.

214.905(1) (1) If an order under s. 214.90 specifies that the books and records of a savings bank are so incomplete and inaccurate that the division is unable to determine the financial condition of the savings bank or unable to determine the nature, details or purpose of any transaction that may have a material effect on the savings bank’s financial condition, the division shall issue an order that requires all of the following:

214.905(1)(a) (a) Specific steps to restore, reconstruct or adjust the books and records to accuracy and compliance.

214.905(1)(b) (b) Rescission or cessation of transactions or activities that led to the incomplete or inaccurate condition of the books and records.

214.905(1)(c) (c) Establishment of reserves for any losses that the division finds were incurred due to the condition of the books and records.

214.905(2) (2) An order under sub. (1) shall be effective until the division determines through an examination that the condition has been corrected and rescinds the order.

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

214.91 214.91 Removal and prohibition authority.

214.91(1) (1) The division may remove from a savings bank any employee, agent or person affiliated with the savings bank if the division finds that the person has done any of the following:

214.91(1)(a) (a) Directly or indirectly violated any state or federal law, regulation, rule or order or any agreement between the savings bank and the division or between the savings bank and the deposit insurance corporation.

214.91(1)(b) (b) Breached fiduciary or professional responsibilities to the savings bank.

214.91(2) (2) The division may serve upon a savings bank employee, agent or person affiliated with the savings bank a written notice of the division’s intention to remove or suspend the person from office in the savings bank or to prohibit any further participation in any manner by that person in the conduct of the affairs of a savings bank or of a savings and loan association organized under ch. 215, if the division finds that, because of a violation permitting removal under sub. (1), any of the following conditions exists:

214.91(2)(a) (a) A savings bank has or probably will suffer financial loss or other damage.

214.91(2)(b) (b) The interests of the savings bank’s depositors have been or could be prejudiced.

214.91(2)(c) (c) The person received financial gain or other benefit by reason of the violation.

214.91(2)(d) (d) The violation or breach involves personal dishonesty on the part of the person or demonstrates willful or continuing disregard by the person for the safety and soundness of the savings bank.

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

214.915 214.915 Participation prohibition.

214.915(1) (1) Except as provided in rules of the division, any person who has been removed or suspended from office in a savings bank or prohibited from participating in the conduct of the affairs of a savings bank under s. 214.90 may not, while an order is in effect, hold any office in or participate in any manner in the conduct of the affairs of another savings bank, savings bank subsidiary, affiliate, service corporation, savings bank holding company or state savings and loan association.

214.915(2) (2) A violation of sub. (1) by any person who is subject to an order described in that subsection shall be treated as a violation of the order.

214.915 History History: 1991 a. 221, 315; 1995 a. 27.

214.92 214.92 Effect of termination or resignation. The resignation, termination of employment, or separation of a person affiliated with a savings bank from the savings bank does not affect the authority of the division to issue an order under s. 214.90, 214.91 or 214.915 if the order is issued within 6 years after the person ceases to be a person affiliated with the savings bank.

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

214.925 214.925 Unauthorized participation by convicted individual.

214.925(1) (1) Except with the prior written consent of the division, a person who has been convicted of a criminal offense involving dishonesty or a breach of trust may not participate, directly or indirectly, in any manner in the conduct of the affairs of a savings bank.

214.925(2) (2) The directors or officers of a savings bank may not permit a person described in sub. (1) to participate in the conduct of the affairs of the savings bank.

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

214.93 214.93 False statements. A person may not knowingly make, cause, or allow another person to make or cause to be made, a false statement, under oath if required by this chapter or on any report or statement required by the division or by this chapter. In addition to any forfeiture under s. 214.935, a person who violates this section is guilty of a Class F felony.

214.93 History History: 1991 a. 221; 1995 a. 27, 103; 1997 a. 283; 2001 a. 109.

214.935 214.935 Civil forfeitures. In addition to the enforcement authority granted to the division, the following forfeiture provisions apply:

214.935(1) (1) Except as provided in sub. (2), any person who violates this chapter, any rule promulgated under this chapter or an order of the division may be required to forfeit not more than $10,000. Each day of continued violation constitutes a separate offense.

214.935(2) (2) Any person who fails to comply with a reporting requirement under this chapter may be required to forfeit not more than $1,000 for the first offense and may be required to forfeit not more than $2,500 for the 2nd or any later offense.

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