Chapter 221

221.0215(8)(e) (e) The date that the amendment was adopted.

221.0215(8)(f) (f) A statement that the amendment was adopted by the board of directors and that shareholder action was not required. An amendment filed under this subsection is not effective unless approved by the division.

221.0215(9) (9) Resolutions modifying preferences, limitations and relative rights. After the articles of amendment are filed under sub. (8) and before the bank issues any shares of the class or series that is the subject of the articles of amendment, the board of directors may alter or revoke any preferences, limitations or relative rights described in the articles of amendment, by adopting another resolution appropriate for that purpose. The bank shall file with the division revised articles of amendment that comply with sub. (8). A preference, limitation or relative right may not be altered or revoked after the issuance of any shares of the class or series that are subject to the preference, limitation or relative right.

221.0215 History History: 1995 a. 336.

221.0216 221.0216 Preferred stock.

221.0216(1) (1) Issuance.

221.0216(1)(a) (a) Except as provided in sub. (2), a bank may issue preferred stock of one or more classes by providing for the issuance in the original articles of incorporation, or by providing for the issuance by an amendment to these articles of incorporation that is approved by the division and by shareholders owning a majority of the stock of the bank entitled to vote, or such greater percentage as may be required in the bank’s articles of incorporation or bylaws. An issue of preferred stock is not valid until the par value of all preferred stock is paid in.

221.0216(1)(b) (b) Preferred stock issued under par. (a) may be issued in such amount and with such par value as may be approved by the division and may provide for any of the following, subject to the approval of the division:

221.0216(1)(b)1. 1. Payment of dividends at a specified rate on the preferred stock before dividends are paid on the capital stock.

221.0216(1)(b)2. 2. The cumulation of dividends under subd. 1.

221.0216(1)(b)3. 3. A preference over the capital stock in the distribution of the assets of the bank.

221.0216(1)(b)4. 4. Conversion of the preferred stock into capital stock.

221.0216(1)(b)5. 5. Redemption of the preferred stock.

221.0216(1)(b)6. 6. Denying or restricting the voting power of the preferred stock.

221.0216(2) (2) Newly organized banks. The requirement for a vote of shareholders under sub. (1) (a) does not apply to a newly organized bank that has not yet issued capital stock.

221.0216(3) (3) Changes relating to preferred stock. No change in relation to preferred stock may be made except by an amendment to the articles of incorporation that is approved by all of the following:

221.0216(3)(a) (a) A vote of the shareholders owning a majority of the preferred stock of the bank who are entitled to vote or such greater percentage required under the articles of incorporation or bylaws.

221.0216(3)(b) (b) A vote of the shareholders owning a majority of the capital stock of the bank entitled to vote or such greater percentage required under the articles of incorporation or bylaws.

221.0216(3)(c) (c) The division.

221.0216(4) (4) Liability of holders of preferred stock. Preferred stock of a bank is not subject to an assessment to restore an impairment in the capital of the bank. A holder of preferred stock of a bank is not individually responsible, in the shareholder’s capacity as a shareholder, for any debt, contract or acknowledgment of a bank.

221.0216(5) (5) Dividend rights. A dividend may not be declared or paid on capital stock until the cumulative dividends on the preferred stock have been paid in full. If the bank is placed in liquidation, a payment may not be made to the holders of the capital stock if the holders of the preferred stock have not been paid in full the par value of the stock plus all cumulative dividends.

221.0216 History History: 1995 a. 336; 1997 a. 35, 146.

221.0217 221.0217 Reorganization of a state bank as a national bank. A bank organized under this chapter may reorganize under the laws of the United States as a national bank. When the bank has obtained a certificate from the U.S. comptroller of the currency authorizing it to commence business under the federal banking law, the bank is reorganized as a national bank. The reorganized bank takes and holds all of the assets, real and personal, of the bank organized under this chapter, subject to all liabilities existing against the bank at the time of the reorganization. The reorganized bank shall immediately notify the division of the reorganization.

221.0217 History History: 1995 a. 336.

221.0218 221.0218 Reorganization of a national bank as a state bank. A national bank that is authorized to dissolve and that has taken the necessary steps to effect a dissolution, may reorganize as a state bank under this chapter, with the approval of the division and upon the consent in writing of the shareholders owning a majority of the stock of the bank entitled to vote or such greater percentage required in the articles of incorporation or bylaws. The shareholders shall make, execute and acknowledge articles of incorporation as required by this chapter. A national bank seeking to reorganize under this section shall pay to the division a fee determined by the division, plus the actual costs incurred by the division in investigating the proposed reorganization. Upon the filing of articles of incorporation under this chapter and upon the approval of the division, the bank is reorganized under this chapter, and the assets, real and personal, of the dissolved national bank become the property of the reorganized bank, subject to all liabilities of the national bank not liquidated before the reorganization.

221.0218 History History: 1995 a. 336.

221.0219 221.0219 Conversion of a credit union to a state bank. A credit union under ch. 186 may become a state bank under this chapter by doing all of the following:

221.0219(1) (1) Applying to the division of banking for authority to organize as a bank under this chapter and satisfying all requirements under this chapter for organizing as a bank.

221.0219(2) (2) Satisfying all requirements under s. 186.314 (2m) for conversion to a state bank.

221.0219(3) (3) Recording the bank’s articles of incorporation in the county in which its home office is located.

221.0219 History History: 2011 a. 32.

subch. III of ch. 221 SUBCHAPTER III

PURPOSES AND POWERS

221.0301 221.0301 General powers. Upon approval of the articles of incorporation by the division, the bank is a body corporate and, except as provided in sub. (6), has perpetual duration. In addition to all other powers granted under this chapter, a bank has all of the following powers:

221.0301(1) (1) Power to contract. To make contracts necessary and proper to effect its purpose and conduct its business.

221.0301(2) (2) Power to sue. To sue and be sued, and to appear and defend in all actions and proceedings under its corporate name to the same extent as a natural person.

221.0301(3) (3) Corporate seal. To adopt and use a corporate seal and alter the same at pleasure.

221.0301(4) (4) Officers and agents. To elect or appoint officers, agents and employees, define their duties and obligations, require bonds of them, fix their compensation, dismiss them and fill vacancies.

221.0301(5) (5) Business of banking. To exercise by its board of directors, or duly authorized officers or agents, all incidental powers necessary to carry on the business of banking. A bank may exercise the powers granted by this subsection to carry on the business of banking at a branch bank. Powers granted under this subsection include all of the following:

221.0301(5)(a) (a) Buying, discounting and negotiating promissory notes, bonds, drafts, bills of exchange, foreign and domestic, and other evidences of debt.

221.0301(5)(b) (b) Buying and selling coin and bullion.

221.0301(5)(c) (c) Receiving commercial and savings deposits under such conditions as the bank may establish.

221.0301(5)(d) (d) Buying and selling exchange.

221.0301(5)(e) (e) Making loans on personal and real security in accordance with this chapter.

221.0301(6) (6) Succession. To have succession until any of the following occurs:

221.0301(6)(a) (a) The bank is dissolved by the act of its shareholders owning a majority of the stock of the bank entitled to vote or such greater percentage required under its articles of incorporation or bylaws.

221.0301(6)(b) (b) The bank’s corporate existence becomes terminated by a provision in its articles of incorporation.

221.0301(6)(c) (c) The bank’s charter is forfeited under s. 220.08 (18) or 221.0803.

221.0301(7) (7) Intermediary or payer bank. To establish and maintain facilities for the receipt of checks and other transit items as an intermediary or payer bank in bank-to-bank transactions.

221.0301(8) (8) Services to other depository institutions. To contract with one or more depository institutions to provide banking and financially related products or services on its behalf to its customers, except that no contract is required for the acceptance of deposits of customers at affiliated banks. A bank that proposes to enter into a contract under this subsection shall file with the division, at least 30 days before the effective date of the contract, a notice of intention to enter into a contract with a depository institution, a description of the services proposed to be performed under the contract and a copy of the contract. A bank may not, pursuant to a contract under this subsection, conduct any activity as an agent that it would be prohibited from conducting as a principal under applicable state or federal law, or have an agent conduct any activity that the bank as a principal would be prohibited from conducting under applicable state or federal law. The division may order a bank or any other depository institution subject to the division’s enforcement powers to cease acting as an agent or principal under any contract that the division finds to be inconsistent with safe and sound banking practices.

221.0301(9) (9) Other. To exercise such other powers as may be provided or permitted under this chapter.

221.0301 History History: 1995 a. 336.

221.0302 221.0302 Branch banks and other facilities.

221.0302(1g) (1g) Definitions. In this section:

221.0302(1g)(a) (a) “Affiliate” means any company that directly or indirectly controls, or is under common control with, another company.

221.0302(1g)(b) (b) “Bank holding company” has the meaning given in 12 USC 1841 (a).

221.0302(1g)(c) (c) “Commercial activities” means those activities in which a bank holding company, financial holding company, national bank, state bank, as defined in s. 221.0903 (1) (e), or state bank certified under ch. 222 as a universal bank are not authorized to engage under federal or state law.

221.0302(1g)(d) (d) “Company” has the meaning given in s. 221.0901 (2) (f).

221.0302(1g)(e) (e) “Financial holding company” has the meaning given in 12 USC 1841 (p).

221.0302(1m) (1m) Establishment. A bank may establish and maintain a branch bank or joint branch bank with the approval of the division.

221.0302(2) (2) Conversion. A bank may be converted to a branch bank of the surviving bank of a merger or consolidation under s. 221.0702. A branch of a bank converted into a branch bank becomes a branch of the surviving bank.

221.0302(3) (3) Transfer. A bank may transfer a branch bank to any other bank located in this state with the approval of the division. A bank may transfer a branch bank to a bank located in another state only if the division has determined under s. 221.0904 (3) (b) that the state’s laws are reciprocal regarding establishing branches.

221.0302(4) (4) Out-of-state branches. A bank may establish a branch bank in another state with the approval of the division.

221.0302(5) (5) Activities not considered branch banking. The following activities do not constitute the establishment or maintenance of a branch bank or a joint branch bank:

221.0302(5)(a) (a) Picking up deposits and delivering money to bank customers at locations designated by the bank.

221.0302(5)(b) (b) Establishing or maintaining a facility under s. 221.0301 (7).

221.0302(5)(c) (c) Acting as an agent, or having another bank act as agent, under s. 221.0301 (8).

221.0302(5)(d) (d) Operating a trust service office under s. 221.0316 (4).

221.0302(6) (6) Application. A bank shall apply for the establishment or transfer of a branch bank under this section to the division on a form furnished by the division. The application shall be accompanied by a fee determined by the division.

221.0302(7) (7) Standards for approval.

221.0302(7)(a) (a) General. Except as provided in par. (b), the division shall approve the establishment of a branch bank under sub. (1m) or the conversion of a bank to a branch bank under sub. (2) if the financial and managerial resources and future prospects of the bank establishing a branch bank, or the surviving bank of a merger or consolidation, are satisfactory to the division.

221.0302(7)(b) (b) Location restrictions; certification of compliance. The division may not approve the establishment of a branch bank under sub. (1m), the conversion of a bank to a branch bank under sub. (2), or the transfer of a branch bank under sub. (3) if the establishment, conversion, or transfer would violate sub. (8m). Each bank shall certify to the division that the location of a branch bank complies with sub. (8m).

221.0302(8) (8) Applicability of laws and rules governing banks. Branch banks are subject to all laws and rules applicable to banks generally.

221.0302(8m) (8m) Location restrictions for branch banks. Except as provided in sub. (10) (b), no bank may directly or indirectly establish or maintain in this state a branch bank that is located within a 1.5-mile radius of premises or property owned, leased, or otherwise controlled, directly or indirectly, by an affiliate of the bank that engages in commercial activities. No bank may circumvent the prohibition in this subsection by first establishing a branch bank and then locating, or attempting to influence or facilitate the location of, an office of the bank’s affiliate engaged in commercial activities within a 1.5-mile radius of the location of the branch bank.

221.0302(9) (9) Closure of branch banks. At least 30 days before closing a branch bank, a bank shall notify the division in writing and post a notice of the closing in the lobby of the bank and the lobby of the branch bank to be closed.

221.0302(10) (10) Exemptions.

221.0302(10)(a) (a) Grandfathered branch banks. Every branch bank, branch office, or bank station existing on August 1, 1989, is considered to be a branch bank approved by the division under this paragraph.

221.0302(10)(b) (b) Exemption from location restrictions. Subsections (7) (b) and (8m) do not apply to any bank branch approved by the division on or before April 2, 2008.

221.0302 History History: 1995 a. 336; 1997 a. 146; 2005 a. 217; 2007 a. 112.

221.0302 Cross-reference Cross-reference: See also ch. DFI-Bkg 8, Wis. adm. code.

221.0303 221.0303 Customer bank communications terminals.

221.0303(1) (1) Definition. In this section, “customer bank communications terminal” means a terminal or other facility or installation, attended or unattended, that is not located at the principal place of business or at a branch or remote facility of a bank and through which customers and banks may engage, by means of either the direct transmission of electronic impulses to and from a bank or the recording of electronic impulses or other indicia of a transaction for delayed transmission to a bank, in transactions which are incidental to the conduct of the business of banking and which are otherwise permitted by law. “Customer bank communications terminal” also includes all equipment, regardless of location, which is interconnected with a customer bank communications terminal and which is necessary to transmit, route and process electronic impulses in order to enable the customer bank communications terminal to perform any function for which it is designed.

221.0303(2) (2) Operation and acquisition of customer bank communications terminals. A bank may, directly or indirectly, acquire, place, and operate, or participate in the acquisition, placement, and operation of, at locations other than its main or branch offices, customer bank communications terminals, in accordance with rules established by the division. The rules of the division shall provide that any such customer bank communications terminal shall be available for use, on a nondiscriminatory basis, by any state or national bank and by all customers designated by a bank using the terminal. This subsection does not authorize a bank which has its principal place of business outside this state to conduct banking business in this state. The customer bank communications terminals also shall be available for use, on a nondiscriminatory basis, by any credit union, savings and loan association, or savings bank, if the credit union, savings and loan association, or savings bank requests to share its use, subject to rules jointly established by the division of banking and the office of credit unions.

221.0303(3) (3) Terminals owned or operated by retailers. If a person who is primarily engaged in the retail sale of goods or services owns or operates a customer bank communications terminal on the person’s premises and allows access to the terminal by any financial institution, group of financial institutions, or their customers for any purpose or function, then all of the following apply:

221.0303(3)(a) (a) The division may not require the person to accept any connection to or use of the customer bank communications terminal on its premises for any other purpose or function, or to accept any connection to the terminal on its premises by any other financial institution.

221.0303(3)(b) (b) This chapter, and the rules promulgated by the division, do not apply to the person, except for laws or rules directly related to the particular function performed by the terminal on such person’s premises for a financial institution.

221.0303(4) (4) Use of transmitted information. Information transmitted from a customer bank communications terminal, either identified as to particular transactions or aggregate information, may be used only for purposes of effecting the financial transactions for which the information was received, for any other purpose lawfully authorized by contract or for any other purpose permitted by statute or rules pertaining to the dissemination and disclosure of such information.

221.0303 History History: 1995 a. 336; 1997 a. 27; 1999 a. 9; 2003 a. 33; 2021 a. 240 s. 30; 2023 a. 128.

221.0303 Cross-reference Cross-reference: See also s. DFI-Bkg 14.02, Wis. adm. code.