LRB-3495/2
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1997 - 1998 LEGISLATURE
February 19, 1998 - Introduced by Representatives Ward, Klusman, Williams,
Turner, Gronemus, Staskunas, Brandemuehl, Meyer, Kunicki, Travis,
Krusick, Porter, Hasenohrl, Carpenter, Vander Loop, Ryba, La Fave and
Hoven, cosponsored by Senators C. Potter and Grobschmidt. Referred to
Committee on Financial Institutions.
AB797,1,6
1An Act to consolidate, renumber and amend 214.715 (4) (a) and (b) and
2215.03 (7) (a) and (b);
to amend 214.485 (8), 214.485 (9), 214.49 (14) and 215.50
3(7); and
to create 214.485 (11), 214.502 and 215.215 of the statutes;
relating
4to: investment and lending powers of savings institutions, the location of
5savings institution offices and the power of boards of directors of savings and
6loan associations to provide for pension and deferred compensation plans.
Analysis by the Legislative Reference Bureau
This bill makes several changes in the authority granted to savings and loan
associations and savings banks ("savings institutions") to make loans and
investments and to maintain offices. Certain changes made by the bill affect only
savings banks, others affect only savings and loan associations and still others apply
to all savings institutions.
savings banks and savings and loan associations
1. Home offices and branch offices. Under current law, a savings institution
that intends to move its home office or a branch office to another location may apply
to the division for permission to relocate, if it is relocating no more than one mile
away from its current location. Current law requires that the division provide notice
and an opportunity for hearing on the application to relocate. This bill repeals the
one-mile limitation and the requirement that the division provide notice and
opportunity for hearing on a relocation application.
2. Nonconforming loans. Under current law, loans made by savings
institutions are required to meet certain requirements relating to underwriting
criteria for loans, to appraisals of property pledged as security for loans and to the
permissible term of loans. This bill notwithstands these provisions to permit savings
institutions to make loans secured by real property that is used primarily for
residential or farming purposes, even if these requirements are not met
(nonconforming loans). The bill permits savings institutions to make nonconforming
loans if the total amount of a savings institution's nonconforming loans does not
exceed 5% of its total assets.
Savings banks
1. Commercial loans. Under current law, a savings bank may make secured
or unsecured loans for business, corporate, commercial or agricultural purposes, if
the total amount of these types of loans does not exceed 10% of the savings bank's
total assets. This bill amends this provision to grant the division of savings and loan
(the division) in the department of financial institutions the authority to allow a
bank to exceed this limit with its written authorization. In addition, the bill amends
the provision so that a savings bank may make these types of loans without the
division's written authorization, if the total amount of these loans does not exceed
20% of the savings bank's total assets.
2. Personal loans. Under current law, a savings bank may make secured or
unsecured loans for personal, family or household purposes if the total of all loans
granted does not exceed 10% of the savings bank's total assets. This bill increases
this percentage limit from 10% to 20% and grants the division the authority to allow
a savings bank to exceed the limit with its written authorization.
3. Credit card loans. Under current law, savings banks may make loans for a
variety of specified purposes and for any other purpose authorized by rule of the
division. This bill amends the provisions regarding the lending powers of savings
banks to specifically authorize a savings bank to make loans through credit cards or
credit card accounts.
4. Marketable investment securities. Under current law, savings banks may
invest in marketable investment securities, if the total amount of these securities of
any one issuer or obligor does not exceed 5% of the savings bank's capital and if the
aggregate amount of these securities does not exceed 15% of the savings bank's
capital. This bill replaces the 5% limit on securities of any one issuer or obligator
with a 10% limit. The bill also replaces the overall limit of 15% of the savings bank's
capital with a limit of 10% of the savings bank's total assets. The bill permits the
savings bank to exceed this limit with written authorization from the division.
Finally, the bill amends this provision to specify that marketable investment
securities include marketable corporate debt instruments that are rated in one of the
4 highest categories by a nationally recognized rating service.
SAVINGS AND LOAN ASSOCIATIONS
Under current law, the board of directors of a savings and loan association may,
by resolution, create a fund or join a pension system or enter into deferred
compensation agreements for the retirement of its officers and employes, subject to
specific, prior approval of both the division and the savings and loan review board.
This bill eliminates the requirement of specific, prior approval by the savings and
loan review board.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB797, s. 1
1Section
1. 214.485 (8) of the statutes is amended to read:
AB797,3,62
214.485
(8) Through secured or unsecured loans for business, corporate,
3commercial or agricultural purposes
if. Unless a greater amount is authorized in
4writing by the division, the total of all loans granted under this subsection
does may 5not exceed
10% 20% of the savings bank's total assets
, unless a greater amount is
6authorized in writing by the division.
AB797, s. 2
7Section
2. 214.485 (9) of the statutes is amended to read:
AB797,3,128
214.485
(9) Through secured or unsecured loans for personal, family or
9household purposes if the total of all loans granted under this subsection does not
10exceed
10% 20% of the savings bank's total assets
, unless the division grants written
11authorization for the savings bank to grant loans under this subsection in a greater
12amount.
AB797, s. 3
13Section
3. 214.485 (11) of the statutes is created to read:
AB797,3,1414
214.485
(11) For loans made through credit cards or credit card accounts.
AB797, s. 4
15Section
4. 214.49 (14) of the statutes is amended to read:
AB797,4,216
214.49
(14) In marketable investment securities,
including marketable
17corporate debt instruments rated in one of the 4 highest categories by a nationally
18recognized rating service, if the total amount of those securities of any one issuer or
19obligor does not exceed
5% 10% of the savings bank's capital
and the. The aggregate
20amount of investments under this subsection
does
may not exceed
15% of capital 10%
1of the savings bank's total assets, unless the savings bank has received written
2authorization from the division.
AB797, s. 5
3Section
5. 214.502 of the statutes is created to read:
AB797,4,8
4214.502 Nonconforming loans. Notwithstanding ss. 214.48 (3), (4) and (4m)
5and 214.485 (2) (a) and (d), a savings bank may make loans secured by real property
6used primarily for residential or farming purposes , even if those loans do not comply
7with one or more of the requirements under those provisions, if the total amount of
8loans made under this section does not exceed 5% of the savings bank's total assets.
AB797, s. 6
9Section
6. 214.715 (4) (a) and (b) of the statutes are consolidated, renumbered
10214.715 (4) and amended to read:
AB797,4,2011
214.715
(4) A savings bank that intends to move its home office or a branch
12office t
o some other location not more than one mile from its current location shall
13make an application to the division.
The division may approve or deny the
14application for relocation. (b) A savings bank that intends to move its home office
15or a branch office to some other location more than one mile from its current location
16shall make an application to the division. The division shall give notice and provide
17an opportunity for hearing as provided in s. 214.26 (3) to (5). In approving or denying
18the application for relocation, the division shall determine the need for relocation
19and determine whether undue harm or injury would be caused to any savings bank
20doing business in the area or vicinity of the proposed relocation.
AB797, s. 7
21Section
7. 215.03 (7) (a) and (b) of the statutes are consolidated, renumbered
22215.03 (7) and amended to read:
AB797,5,823
215.03
(7) Any association which determines to move its home office or
a 24branch
office to some other location
not more than one mile from its then location 25shall make an application to the division.
The division may approve or deny such
1application for relocation. (b) Any association which determines to move its home
2office or branch to some other location more than one mile from its then location shall
3make an application to the division. The division shall give notice and provide an
4opportunity for hearing as provided in s. 215.40 (7). In approving or denying the
5application for relocation, the division shall ascertain the need for relocation and
6determine whether undue harm or injury would be caused to any properly conducted
7association or branch now doing business in the area or vicinity of the proposed
8relocation.
AB797, s. 8
9Section
8. 215.215 of the statutes is created to read:
AB797,5,14
10215.215 Nonconforming loans. Notwithstanding ss. 215.19 (2) and 215.21
11(1), (16) and (18), an association may make loans secured by real property used
12primarily for residential or farming purposes, even if those loans do not comply with
13one or more of the requirements under those provisions, if the total amount of loans
14made under this section does not exceed 5% of the association's total assets.
AB797, s. 9
15Section
9. 215.50 (7) of the statutes is amended to read:
AB797,5,2116
215.50
(7) Directors to fix compensation. The compensation of officers,
17directors, employes and committee members shall be fixed by a majority vote of the
18board of directors in accordance with the bylaws. In addition, the board of directors
19may, by resolution, create a fund or join a pension system or enter into deferred
20compensation agreements for the retirement of its officers and employes, subject to
21specific, prior approval of the division
and the review board.
AB797,6,3
1(1)
Relocation applications. The treatment of sections 214.715 (4) (a) and (b)
2and 215.03 (7) (a) and (b) of the statutes first applies to applications submitted on
3the effective date of this subsection.
