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 1Section 1 . 34.07 of the statutes is amended to read:
SB686,4,7 234.07 Security. A surety bond or other security, including an irrevocable letter
3of credit issued by a federal home loan bank, state bank, national bank, federal or
4state savings bank, federal or state credit union, or federal or state savings and loan
5association,
may be required of or given by any public depository for any public
6deposits that exceed the amount of deposit insurance provided by an agency of the
7United States and the coverage provided under s. 34.08 (2).
SB686,2 8Section 2 . 138.052 (5) (am) 1. of the statutes is amended to read:
SB686,5,8
1138.052 (5) (am) 1. Except as provided in par. (b) and unless the escrow funds
2are held by a 3rd party in a noninterest-bearing account, a bank, credit union,
3savings bank, savings and loan association or mortgage banker which originates a
4loan on or after January 1, 1994, and before the effective date of this subdivision ....
5[LRB inserts date],
or a loan subject to subd. 3., and which requires an escrow to
6assure the payment of taxes or insurance shall pay interest on the outstanding
7principal balance of the escrow at the variable interest rate established under subd.
82.
SB686,3 9Section 3. 186.235 (7) (b) 4. of the statutes is created to read:
SB686,5,1510 186.235 (7) (b) 4. Furnish to a federal home loan bank, upon request, a copy of
11any examination report made by, or other supervisory information created by, the
12office of credit unions of any credit union, if the federal home loan bank agrees to treat
13the information received under this subdivision with the same degree of
14confidentiality that is required of employees of the office of credit unions under par.
15(a).
SB686,4 16Section 4 . 186.235 (16) (a) of the statutes is amended to read:
SB686,5,2517 186.235 (16) (a) Except as provided in par. (b), at least once every 18 months,
18the office of credit unions shall examine the records and accounts of each credit
19union. For that purpose the office of credit unions shall have full access to, and may
20compel the production of, each credit union's records and accounts. The office of
21credit unions may administer oaths to and examine each credit union's officers and
22agents. In conducting examinations under this paragraph, the office of credit unions
23may accept and rely on information collected by other agencies or independent 3rd
24parties in determining whether a credit union has satisfied any requirement that is
25part of the examination.
SB686,5
1Section 5. 214.54 (1) of the statutes is amended to read:
SB686,6,52 214.54 (1) Except as provided in sub. (2) and s. 214.49 (4), the total of
3outstanding loans and extensions of credit, both direct and indirect, made by a
4savings bank to a single person shall be subject to limits established by rule of the
5division, but may not exceed 15 20 percent of the savings bank's capital.
SB686,6 6Section 6 . 214.54 (2) of the statutes is amended to read:
SB686,6,127 214.54 (2) Total outstanding loans and extensions of credit, both direct and
8indirect, made by a savings bank to a single person may exceed the 15 20 percent
9limit under sub. (1), but may not exceed 25 percent of the savings bank's capital, if
10all loans or extensions of credit that exceed the 15 20 percent limit are at least 100
11percent secured by readily marketable collateral having a market value that may be
12determined by reliable and continuously available price quotations.
SB686,7 13Section 7 . 214.725 (3) (intro.) of the statutes is amended to read:
SB686,6,1514 214.725 (3) (intro.) An Subject to sub. (3m), an examination shall include a
15review of all of the following:
SB686,8 16Section 8 . 214.725 (3m) of the statutes is created to read:
SB686,6,2017 214.725 (3m) In conducting examinations under sub. (1) (a), the division may
18accept and rely on information collected by other agencies or independent 3rd parties
19in determining whether a savings bank has satisfied any requirement that is part
20of the examination.
SB686,9 21Section 9. 214.755 (1) (f) of the statutes is created to read:
SB686,6,2322 214.755 (1) (f) A federal home loan bank if the federal home loan bank agrees
23to keep the information confidential.
SB686,10 24Section 10. 215.02 (6) (a) 7. of the statutes is created to read:
SB686,7,4
1215.02 (6) (a) 7. The division may furnish to a federal home loan bank a copy
2of any examination report made by, or other supervisory information created by, the
3division of any association if the federal home loan bank agrees to keep the
4examination report or other information confidential.
SB686,11 5Section 11 . 215.03 (2) (a) of the statutes is amended to read:
SB686,7,166 215.03 (2) (a) Except as provided in par. (b), at least once within every
718-month period, the division shall examine the cash, bills, collaterals, securities,
8assets, books of account, condition and affairs of all such associations and for that
9purpose the division or the division's examiners shall have access to, and may compel
10the production of, all their books, papers, securities and moneys, administer oaths
11to and examine their officers and agents as to their affairs. In conducting
12examinations under this paragraph, the division may accept and rely on information
13collected by other agencies or independent 3rd parties in determining whether an
14association has satisfied any requirement that is part of the examination.
An
15employee of the division may not examine an association in which the employee is
16interested as an officer or director.
SB686,12 17Section 12 . 220.04 (1) (a) of the statutes is amended to read:
SB686,8,418 220.04 (1) (a) The division shall examine at least once every 18 months the
19cash, bills, collaterals, securities, assets, books of account, condition and affairs of
20each bank and trust company bank doing business in this state, except national
21banks. For that purpose the division may examine on oath any of the officers, agents,
22directors, clerks, stockholders, customers or depositors thereof, touching the affairs
23and business of such institution. In conducting examinations under this paragraph,
24the division may accept and rely on information collected by other agencies or
25independent 3rd parties in determining whether a bank or trust company bank has

1satisfied any requirement that is part of the examination.
In making such
2examinations of banks, the division shall determine the fair valuation of all assets
3in accordance with the schedules, rules and regulations prescribed by the banking
4review board.
SB686,13 5Section 13. 220.06 (1m) of the statutes is amended to read:
SB686,8,256 220.06 (1m) No division employee may examine a bank or licensee in which
7that person is interested as a stockholder, officer or employee. No division employee
8may examine a bank or licensee located in the same village, city or county with any
9bank or licensee in which that person is so interested. Employees in the division, and
10each member and employee of the banking review board, shall keep secret all facts
11and information obtained in the course of examinations or from reports not under s.
12221.1002 (1) filed by a bank or licensee with the division, except so far as the public
13duty of the person requires reporting upon or taking special action regarding the
14affairs of any bank or licensee, and except when called as a witness in any criminal
15proceeding or trial in a court of justice. The division may furnish to the federal
16deposit insurance corporation, to a federal home loan bank, or to any regulatory
17authority for state or federal financial institutions, insurance or securities a copy of
18any examination made of any such bank or licensee or of any report made by such
19bank or licensee and may give access to and disclose to the corporation or to any
20regulatory authority for state or federal financial institutions, insurance or
21securities any information possessed by the division, or to a federal home loan bank
22any information created by the division,
with reference to the conditions or affairs
23of any such insured bank or licensee if the regulatory authority agrees to treat all
24information received with the same degree of confidentiality as applies to reports of
25examination that are in the custody of the division.
SB686,14
1Section 14. 221.0328 (4) of the statutes is created to read:
SB686,9,92 221.0328 (4) Reduction of capital. Subject to the approval of the division, and
3subject to ss. 221.0211 (4) and 221.0323 (1) and (2), a bank may, by a vote of
4shareholders owning, in the aggregate, at least two-thirds of its capital stock, reduce
5its capital. Notwithstanding sub. (2) and subject to ss. 221.0216 (5) and 221.0327,
6as part of its capital reduction plan approved by the division in accordance with this
7subsection, and with the affirmative vote of shareholders owning at least two-thirds
8of the shares of each class of its stock outstanding, a bank may distribute cash or
9other assets to its shareholders.
SB686,15 10Section 15 . 223.105 (3) (a) of the statutes is amended to read:
SB686,9,2111 223.105 (3) (a) To assure compliance with such rules as may be established
12under s. 220.04 (7), the division of banking and the office of credit unions shall, at
13least once every 18 months, examine the fiduciary operations of each organization
14which is under its respective jurisdiction and is subject to examination under sub.
15(2). If a particular organization subject to examination under sub. (2) is not
16otherwise under the jurisdiction of one of the foregoing agencies, such examination
17shall be conducted by the division of banking. In conducting examinations under this
18paragraph, the division of banking or office of credit unions may accept and rely on
19information collected by other agencies or independent 3rd parties in determining
20whether an organization has satisfied any requirement that is part of the
21examination.
SB686,16 22Section 16 . 645.05 (3) of the statutes is created to read:
SB686,9,2523 645.05 (3) No injunction against a federal home loan bank. Notwithstanding
24subs. (1) and (2) and any other provision of this chapter, no federal home loan bank
25may be stayed, enjoined, or prohibited from exercising or enforcing any right or cause

1of action regarding collateral pledged under any security agreement, or any pledge,
2security, collateral, or guarantee agreement, or any other similar arrangement or
3credit enhancement relating to a federal home loan bank security agreement.
SB686,17 4Section 17 . 645.46 (11) of the statutes is renumbered 645.46 (11) (a) and
5amended to read:
SB686,10,86 645.46 (11) (a) Enter Subject to par. (b), enter into such contracts as are
7necessary to carry out the order to liquidate, and affirm or disavow any contracts to
8which the insurer is a party.
SB686,18 9Section 18 . 645.46 (11) (b) of the statutes is created to read:
SB686,10,1410 645.46 (11) (b) Notwithstanding any other provision of this chapter, no
11liquidator has the power to disavow any federal home loan bank security agreement,
12or any pledge, security, collateral, or guarantee agreement, or any other similar
13arrangement or credit enhancement relating to a federal home loan bank security
14agreement.
SB686,19 15Section 19 . 645.54 (1) (b) 3. of the statutes is created to read:
SB686,10,2316 645.54 (1) (b) 3. Notwithstanding any other provision of this chapter, no
17liquidator may avoid any transfer of, or any obligation to transfer, money or any other
18property arising under or in connection with any federal home loan bank security
19agreement, or any pledge, security, collateral, or guarantee agreement, or any other
20similar arrangement or credit enhancement relating to a federal home loan bank
21security agreement. However, a transfer may be avoided under this paragraph if it
22was made with actual intent to hinder, delay, or defraud either existing or future
23creditors.
SB686,20 24Section 20 . DWD 274.04 (2) of the administrative code is repealed and
25recreated to read:
SB686,11,1
1DWD 274.04 (2) An employee who meets all of the following conditions:
SB686,11,32(a) The employee's primary duty, as determined under 29 CFR 541.500 (b), is
3any of the following:
SB686,11,441. Making sales, as defined under 29 USC 203 (k).
SB686,11,65 2. Obtaining orders or contracts for services or for the use of facilities for which
6a consideration will be paid by the client or customer.
SB686,11,97 (b) The employee is customarily and regularly engaged away from the
8employer's place of business, as described under 29 CFR 541.502, in performing the
9employee's primary duty described under par. (a).
SB686,21 10Section 21 . Effective dates. This act takes effect on the day after publication,
11except as follows:
SB686,11,1312 (1) The treatment of section DWD 274.04 (2) of the administrative code takes
13effect as provided in section 227.265 of the statutes.
SB686,11,1414 (End)
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