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LRB-4658/1
ARG/EVM/ZDW:all
2021 - 2022 LEGISLATURE
October 4, 2021 - Introduced by Representatives Katsma, Armstrong, Dallman,
Dittrich, Kurtz, Loudenbeck, Mursau, Penterman, Thiesfeldt, Wichgers,
Wittke, Zimmerman and Doyle, cosponsored by Senators Marklein,
Felzkowski, Feyen and Nass. Referred to Committee on Financial
Institutions.
AB596,1,7 1An Act to amend 34.08 (2), 38.20 (2) (e), 67.12 (12) (a), 705.04 (2) (intro.), 705.04
2(2g) and 705.06 (3); and to create 66.0440, 101.02 (7m) and 705.06 (2m) of the
3statutes; relating to: P.O.D. accounts and loan obligations to financial
4institutions; payments for public deposit losses in failed financial institutions;
5automated teller machines; prohibiting requiring access boxes on buildings
6owned by financial institutions; promissory notes of certain public bodies; and
7repealing rules promulgated by the Department of Financial Institutions.
Analysis by the Legislative Reference Bureau
This bill does all of the following:
1. Allows a financial institution that has established a payable-on-death
(P.O.D.) account and made a loan to the P.O.D. account owner to, upon the death of
the account owner, withhold distribution to the P.O.D. account beneficiary of an
amount necessary to satisfy the account owner's loan obligation to the financial
institution.
2. Increases the amount of compensation available from the Department of
Financial Institutions for losses by the state or a local government resulting from the
deposit of public moneys in a failed or failing financial institution.
3. Repeals certain DFI rules related to the placement or operation of automated
teller machines (ATMs) by financial institutions.

4. Prohibits the Department of Safety and Professional Services and local
governments from requiring a financial institution to install an access box in or on
any financial institution building.
5. Extends the maximum maturity date, from 10 to 20 years, of a promissory
note issued by a city, village, town, county, or school district.
P.O.D. accounts
Current law allows a depositor of a financial institution to establish a P.O.D.
account under which the sums on deposit at the time of the depositor's death are
transferred to a designated P.O.D. beneficiary and are not subject to distribution by
will or otherwise as part of the deceased depositor's estate.
Under this bill, if the financial institution has made a loan to the depositor and
has any lien right, right to setoff, or security interest in the P.O.D. account resulting
from the loan, then upon the depositor's death, the financial institution may retain
control of all sums on deposit in the P.O.D. account to the extent necessary to exercise
its lien right or right to setoff or to protect its security interest. The financial
institution must then pay the remaining balance of the account to the P.O.D.
beneficiary.
Public deposit losses
Under current law, the Investment Board (SWIB) and the governing bodies of
counties, municipalities, and certain other local governmental units (collectively,
public depositors) must designate one or more financial institutions in this state for
deposit of all public moneys received by the public depositor. DFI administers a
claims process that repays public depositors for losses that exceed applicable deposit
insurance resulting from a failed or failing financial institution's failure to repay the
deposit of public moneys. The maximum payment that DFI can make to a public
depositor for losses from a single financial institution is $400,000. These loss
payment provisions also apply to local government deposits in the local government
pooled-investment fund managed by SWIB.
This bill increases, from $400,000 to $1,000,000, the maximum payment that
DFI can make to a public depositor for losses from a single financial institution that
exceed deposit insurance.
ATMs
Under current law, a bank, savings bank, savings and loan association, or credit
union (financial institution) may acquire, place, and operate, at locations away from
the financial institution, devices referred to variously as customer bank
communications terminals, remote terminals, or remote service units (collectively,
off-site ATMs), in accordance with rules established by DFI. Among these rules, 1)
a financial institution must provide advance written notice to DFI before acquiring,
placing, or operating an off-site ATM or changing an off-site ATM location; and 2)
a financial institution may not engage in any activity related to an off-site ATM if
the activity is beyond the financial or management capabilities of the financial
institution, would result in unfair competition among financial institutions, or is
otherwise in violation of DFI's rules relating to off-site ATMs.
This bill repeals these rules described as 1) and 2), above.

Access boxes on financial institution buildings
Under current law, DSPS is required to promulgate rules establishing
standards for building safety, including prescribing safety devices, safeguards, and
other means of protection necessary to render public buildings and places of
employment safe. Under current law generally, local ordinances that establish
minimum standards for constructing, altering, or adding to public buildings or
places of employment must conform to applicable DSPS rules.
This bill prohibits DSPS from requiring, and prohibits local units of
government from enacting or enforcing an ordinance requiring, a financial
institution to install an access box in or on any financial institution building. The
bill defines “access box” as “any box that is installed in or on a building and that is
designed to hold keys or access codes to the building for use by emergency
responders.”
Promissory notes of certain public bodies
Under current law, a public body that has the authority to borrow money and
issue obligations to repay the money out of public funds or revenues and that has the
authority to levy a tax may issue promissory notes for any public purpose. Public
bodies covered by this provision include cities, villages, towns, counties, and school
districts. Each promissory note, with several exceptions, must be repaid within 10
years after the original date of the note. Under this bill, each promissory note must
be repaid within 20 years after the original date of the note.
For further information see the state and local 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:
AB596,1 1Section 1. 34.08 (2) of the statutes is amended to read:
AB596,4,22 34.08 (2) Payments under sub. (1) shall be made in the order in which
3satisfactory proofs of loss are received by the division of banking. The payment made
4to any public depositor for all losses of the public depositor in any individual public
5depository may not exceed $400,000 $1,000,000 above the amount of deposit
6insurance provided by an agency of the United States at the public depository that
7experienced the loss. Upon a satisfactory proof of loss, the division of banking shall
8direct the department of administration to draw its warrant payable from the
9appropriation under s. 20.144 (1) (a) and the secretary of administration shall pay

1the warrant under s. 16.401 (4) in favor of the public depositor that has submitted
2the proof of loss.
AB596,2 3Section 2. 38.20 (2) (e) of the statutes is amended to read:
AB596,4,214 38.20 (2) (e) The district purchasing property under this subsection may, with
5approval of the city council or village board involved, pay the purchase price by
6issuing and delivering directly to the city or village the general obligation promissory
7notes or the notes of the district under s. 67.12 (12), except that no referendum may
8be held and the 10-year 20-year limitation on such notes shall be inapplicable to
9such notes issued under this paragraph. Such notes shall mature and be payable at
10such times, in such amounts and at such rate of interest as will amortize and pay
11when due the principal and interest on the outstanding obligations of the city or
12village for technical college purposes. All such notes, upon execution and delivery
13to the city or village, shall in all respects be held and considered as an authorized
14investment under s. 66.0603 (1m) or 67.11 (2) and (3) of the debt service fund created
15for payment of the city or village obligations issued for technical college purposes and
16shall be offset against city or village indebtedness in computing legal debt limit to
17the same extent as other authorized investments of the debt service fund and such
18notes may be sold and hypothecated. If the offset against city or village indebtedness
19under this paragraph is determined to be invalid in any respect, such city or village
20immediately may require the district issuing the promissory notes to such city or
21village to comply with pars. (c) and (d) to the extent necessary to cure such invalidity.
AB596,3 22Section 3. 66.0440 of the statutes is created to read:
AB596,4,23 2366.0440 (1) Definitions. In this section:
AB596,5,3
1(a) “Access box” means any box that is installed in or on a building and that is
2designed to hold keys or access codes to the building for use by emergency
3responders.
AB596,5,44 (b) “Financial institution” has the meaning given in s. 705.01 (3).
AB596,5,55 (c) “Local governmental unit” has the meaning given in s. 66.0137 (1) (as).
AB596,5,8 6(2) No local governmental unit may enact or enforce an ordinance that requires
7a financial institution to install or use an access box in or on any building owned or
8occupied by a financial institution.
AB596,4 9Section 4. 67.12 (12) (a) of the statutes is amended to read:
AB596,5,1910 67.12 (12) (a) Any municipality may issue promissory notes as evidence of
11indebtedness for any public purpose, as defined in s. 67.04 (1) (b), including but not
12limited to paying any general and current municipal expense, and refunding any
13municipal obligations, including interest on them. Each note, plus interest if any,
14shall be repaid within 10 years after the original date of the note, except that notes
15issued under this section for purposes of ss. 119.498, 281.58, 281.59, 281.60, 281.61,
16and 292.72, issued to raise funds to pay a portion of the capital costs of a metropolitan
17sewerage district, or issued by a 1st class city or a county having a population of
18750,000 or more, to pay unfunded prior service liability with respect to an employee
19retirement system, shall be repaid
within 20 years after the original date of the note.
AB596,5 20Section 5. 101.02 (7m) of the statutes is created to read:
AB596,5,2121 101.02 (7m) (a) Definitions. In this subsection:
AB596,5,2422 1. “Access box” means any box that is installed in or on a building and that is
23designed to hold keys or access codes to the building for use by emergency
24responders.
AB596,5,2525 2. “Financial institution” has the meaning given in s. 705.01 (3).
AB596,6,1
13. “Local governmental unit” has the meaning given in s. 66.0137 (1) (as).
AB596,6,52 (b) Notwithstanding subs. (1) (b) and (15) (h) to (j), the department may not
3require, and notwithstanding subs. (7) (a) and (7r), no local governmental unit may
4enact or enforce an ordinance that requires, a financial institution to install or use
5an access box in or on any building owned or occupied by a financial institution.
AB596,6 6Section 6. 705.04 (2) (intro.) of the statutes is amended to read:
AB596,6,97 705.04 (2) (intro.) If Except as provided in s. 705.06 (2m), if the account is a
8P.O.D. account, on the death of the original payee or the survivor of 2 or more original
9payees, all of the following apply:
AB596,7 10Section 7 . 705.04 (2g) of the statutes is amended to read:
AB596,6,1811 705.04 (2g) Notwithstanding subs. (1) and (2) and s. 705.06 (2m), the
12department of health services may collect, from funds of a decedent that are held by
13the decedent immediately before death in a joint account or a P.O.D. account, an
14amount equal to the medical assistance that is recoverable under s. 49.496 (3) (a), an
15amount equal to aid under s. 49.68, 49.683, 49.685, or 49.785 that is recoverable
16under s. 49.682 (2) (a) or (am), or an amount equal to long-term community support
17services under s. 46.27, 2017 stats., that is recoverable under s. 46.27 (7g) (c) 1., 2017
18stats., and that was paid on behalf of the decedent or the decedent's spouse.
AB596,8 19Section 8. 705.06 (2m) of the statutes is created to read:
AB596,7,420 705.06 (2m) If a financial institution has any lien right, right to setoff, or
21security interest in a P.O.D. account resulting from the financial institution's loan
22or other extension of credit to an original payee, on the death of the original payee
23or the survivor of 2 or more original payees, the financial institution may retain
24control of all sums on deposit in the P.O.D. account to the extent necessary to exercise
25its lien right or right to setoff or to protect its security interest or may tender such

1sums to a court and seek a court determination, but shall pay any remaining balance
2of the sums on deposit to the P.O.D. beneficiary or beneficiaries as provided in s.
3705.04 (2). This subsection applies notwithstanding any limitation on the rights of
4creditors under s. 705.07 (1).
AB596,9 5Section 9. 705.06 (3) of the statutes is amended to read:
AB596,7,86 705.06 (3) The protection provided by this section subs. (1) and (2) shall have
7no bearing on the rights of parties or their successors in disputes concerning the
8beneficial ownership of funds in or withdrawn from an account.
AB596,10 9Section 10 . DFI-Bkg 14.03 of the administrative code is repealed.
AB596,11 10Section 11 . DFI-CU 63.03 of the administrative code is repealed.
AB596,12 11Section 12 . DFI-SB 12.03 of the administrative code is repealed.
AB596,13 12Section 13 . DFI-SL 12.03 of the administrative code is repealed.
AB596,14 13Section 14 . Initial applicability.
AB596,7,1514 (1) Public deposit losses. The treatment of s. 34.08 (2) first applies to losses,
15as defined in s. 34.01 (2), occurring on the effective date of this subsection.
AB596,15 16Section 15 . Effective dates. This act takes effect on the day after publication,
17except as follows:
AB596,7,2018 (1) Administrative rules. The repeal of sections DFI-Bkg 14.03, DFI-CU
1963.03, DFI-SB 12.03, and DFI-SL 12.03 of the administrative code takes effect as
20provided in s. 227.265.
AB596,7,2121 (End)
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