Comments may be submitted to the contact person shown below no later than the date on which the public hearing on this proposed rule order is conducted. Information as to the place, date and time of the public hearing will be published in the Wisconsin Administrative Register.
By mail: Marc Shovers, Assistant Chief Legal Counsel, Department of Financial Institutions, PO Box 8861, Madison, WI 53708-8861.
Rule Text
SECTION 1. DFI-Bkg 3.01 is repealed.
SECTION 2. DFI-Bkg 3.02 is repealed.
SECTION 3. DFI-Bkg 3.03 (intro.) and (1) are amended to read:
DFI-Bkg 3.03 (intro.) As part of its banking business and incidental thereto, a bank may collect, transcribe, process, analyze, and store, for itself and others, banking, financial, or related economic data. In addition, incidental to its banking business, a bank may do all of the following:
(1) Market a by-product (such as program or output) of a data processing activity described in this rule; and .
SECTION 4. DFI-Bkg 3.04 (5) is amended to read:
DFI-Bkg 3.04 (5) Unless otherwise provided by banking laws or regulations, pertinent book figures of the parent bank and its operating subsidiaries, except agricultural credit corporations, shall be consolidated for the purpose of applying applicable statutory limitations, including but not limited to s. 221.0319, 221.0320, 221.0324 or 221.0328, Stats. SECTION 5. DFI-Bkg 3.05 (1) (b) (intro.), 1., and 2. are amended to read:
DFI-Bkg 3.05 (1) (b) (intro.) A bank may enter into a lease financing transaction only if it can reasonably expect to realize a return of its full investment in the leased property, plus the estimated cost of financing the property over the term of the lease from all of the following:
1. Rental;.
2. Estimated tax benefits; and.
SECTION 6. DFI-Bkg 3.05 (1) (c) (intro.) and 1. to 4. are amended to read:
DFI-Bkg 3.05 (1) (c) (intro.) "Net lease" means a lease under which the bank will not, directly or indirectly, provide or be obligated to provide for any of the following:
1. The servicing, repair or maintenance of the leased property during the lease term; .
2. The purchasing of parts and accessories for the leased property. However, improvements and additions to the leased property may be leased to the lessee upon its request in accordance with any applicable requirements for maximum estimated residual value;.
3. The loan of replacement or substitute property while the leased property is being serviced;.
4. The purchasing of insurance for the lessee, except where the lessee has failed in its contractual obligation to purchase or maintain the required insurance; or.
SECTION 7. DFI-Bkg 3.05 (1) (d) (intro.) and 1. are amended to read:
DFI-Bkg 3.05 (1) (d) (intro.) If, in good faith, a bank determines that there has been an unanticipated change in conditions which threatens its financial position by significantly increasing its exposure to loss, the bank may do any of the following:
1. As the owner and lessor under a net lease or a net, full-payout lease, take reasonable and appropriate action to salvage or protect the value of the property or its interests arising under the lease; or.
SECTION 8. DFI-Bkg 3.05 (1) (e) (intro.) and 1. are amended to read:
DFI-Bkg 3.05 (1) (e) (intro.) The limitations contained in par. (c) do not prohibit a bank from doing any of the following: 1. Including any provisions in a lease, or from making any additional agreements, to protect its financial position or investment in the circumstances set forth in par. (d);or . SECTION 9. DFI-Bkg 3.05 (1) (f) (intro.) and 1. are amended to read:
DFI-Bkg 3.05 (1) (f) (intro.) A bank may acquire specific property to be leased only after the bank has entered into either one of the following:
1. A legally binding written agreement which indemnifies the bank against loss in connection with its acquisition of the property; or.
SECTION 10. DFI-Bkg 3.05 (1) (g) is amended to read:
DFI-Bkg 3.05 (1) (g) At the expiration of the a lease, including any renewal or extensions with the same lessee, or in the event of a default on a lease agreement prior to the expiration of the lease term, all of the bank's interest in the property shall either be liquidated or re-leased in conformance with this subsection and either sub. (2) or (3), as soon as practicable, but in no event later than 2 years from the expiration of the lease. Property which the bank retains in anticipation of re-lease must be revalued at the lower of current fair market value or book value prior to any subsequent lease. SECTION 11. DFI-Bkg 3.05 (2) (a) (intro.) and 1. are amended to read:
DFI-Bkg 3.05 (2) (a) (intro.) Subject to the limitations of this subsection and sub. (1), and provided that the aggregate book value of all tangible personal property held for lease under this subsection does not exceed 10% of the consolidated assets of the bank, a bank may do any of the following: 1. Invest in tangible personal property, including, without limitation, vehicles, manufactured homes, machinery, equipment or furniture for lease financing transactions on a net lease basis; or.
SECTION 12. DFI-Bkg 3.05 (3) (a) (intro.), 1., and 2. are amended to read:
DFI-Bkg 3.05 (3) (a) (intro.) Subject to the limitations of this subsection and sub. (1), and provided the lease is a net, full-payout lease representing a noncancelable obligation of the lessee, notwithstanding the possible early termination of that lease, a bank may do all of the following: 1. Become the legal or beneficial owner and lessor of specific personal property or otherwise acquire such property; or.
2. Become the owner and lessor of personal property by purchasing the property from another lessor in connection with its purchase of the related lease; and.
SECTION 13. DFI-Bkg 3.05 (3) (b) is amended to read:
DFI-Bkg 3.05 (3) (b) Any unguaranteed portion of the estimated residual value relied upon by the bank to yield a full return on a net, full-payout lease shall may not exceed 25% of the original cost of the property to the lessor. The amount of any estimated value guaranteed by a manufacturer, lessee or a third party which is not an affiliate of the bank may exceed 25% of the original cost of the property where the bank has determined, and can provide, full supporting documentation that the guarantor has the resources to meet the guarantee.
SECTION 14. DFI-Bkg 3.06 (1) (intro.) and (1) (a) and (b) are amended to read:
DFI-Bkg 3.06 (1) (intro.) Authority. A bank may purchase for its own account shares of investment companies registered with the securities and exchange commission or a privately offered fund sponsored by an affiliated commercial bank if the investment company shares meet all of the following requirements:
(a) The bank has an equitable and equal proportionate undivided interest in the underlying assets of the investment company,.
(b) The bank is shielded from personal liability for acts or obligations of the investment company, and.
SECTION 15. DFI-Bkg 3.07 (1) is amended to read:
DFI-Bkg 3.07 (1) A savings and loan association may be converted into a state chartered bank in compliance with 12 USC 1815 (d) (2) (G), with the approval of the administrator of the division of banking. SECTION 16. DFI-Bkg 3.08 (1) (h) (intro.), 1. and 2. are amended to read:
DFI-Bkg 3.08 (1) (h) (intro.) “Open-end credit" means consumer credit extended by a bank under a plan in which all of the following apply:
1. The bank reasonably contemplates repeated transactions;.
2. The bank may impose a finance charge from time to time on an outstanding unpaid balance; and.
SECTION 17. DFI-Bkg 3.08 (2) (intro.) is created to read:
DFI-Bkg 3.08 (2) (intro.) A bank may not do any of the following:
SECTION 18. DFI-Bkg 3.08 (2) (a), (b), and (c) (intro.) are amended to read:
DFI-Bkg (2) (a) Anti-tying. A bank shall not extend Extend credit or alter the terms or conditions of an extension of credit conditioned upon the customer entering into a debt cancellation contract or debt suspension agreement with the bank.
(b) Misrepresentations generally. A bank shall not engage Engage in any practice or use any advertisement that is false, misleading or deceptive, or which omits to state material information, or otherwise would cause a reasonable person to reach an erroneous belief with respect to information that may be disclosed under this section.
(c) Prohibited contract terms. (intro.) A bank shall not offer Offer debt cancellation contracts or debt suspension agreements that contain any of the following:
SECTION 19. DFI-Bkg 3.08 (5) (c) 1. is amended to read:
DFI-Bkg 3.08 (5) (c) 1. `Short form disclosures.' The bank shall make the short form disclosures orally at the time the bank first solicits the purchase of a contract.
SECTION 20. DFI-Bkg 3.08 (5) (c) 2. is amended to read:
DFI-Bkg 3.08 (5) (c) 2. `Long form disclosures.' The bank shall make the long form disclosures in writing before the customer completes the purchase of the contract. If the initial solicitation occurs in person, the bank shall provide the long form disclosures in writing at that time.
SECTION 21. DFI-Bkg 3.08 (5) (c) 3. to 5. are repealed.
SECTION 22. DFI-Bkg 3.08 (5) (d) 1. is amended to read:
DFI-Bkg 3.08 (5) (d) 1. `Understandable disclosures.' The disclosures required by this section shall be conspicuous, simple, direct, readily understandable, and designed to call attention to the nature and significance of the information provided.
SECTION 23. DFI-Bkg 3.08 (5) (d) 2. is amended to read:
DFI-Bkg 3.08 (5) (d) 2. `Meaningful disclosures.' The disclosures required by this section shall be in a meaningful form.
SECTION 24. DFI-Bkg 4.08 is amended to read:
DFI-Bkg 4.08 A financial institution that establishes or maintains a financial subsidiary shall ensure do all of the following:
(1) The Ensure that the procedures of the financial institution for identifying and managing financial and operational risk within the financial institution and the financial subsidiary adequately protect the financial institution from such risk; and.
(2) The Ensure that the financial institution has, for the protection of the financial institution, reasonable policies and procedures to preserve the separate corporate identity and limited liability of the financial institution and the financial subsidiaries of the financial institution.
SECTION 25. DFI-Bkg 8.01 (1) is amended to read:
DFI-Bkg 8.01 (1) “Branch” means a permanent, an attended banking facility, whether fixed, intermittent, or mobile, that is authorized pursuant to s. 221.0302, Stats., which has no legal identity, assets or liabilities separate from the home office, and which accepts deposits, cashes checks, lends money or provides trust services. The term does not include the home office of a bank, a customer bank communications terminal or a night depository. SECTION 26. DFI-Bkg 8.09 is amended to read:
DFI-Bkg 8.09 Joint branch personnel shall may not represent more than one bank in any transactions or activities or services offered at the joint branch bank other than the cashing of checks or acceptance of deposits or loan payments.
SECTION 27. DFI-Bkg 11.02 of the administrative code is amended to read:
DFI-Bkg 11.02 Place of hearings. Unless otherwise specifically provided by law or ordered by the administrator, all hearings shall be held at the office of the Administrator of the Division of Banking of Wisconsin, 4822 Madison Yards Way, North Tower, Madison, Wisconsin, 53703 53705.
SECTION 28. DFI-Bkg 11.03 of the administrative code is amended to read:
DFI-Bkg 11.03 All hearings shall be conducted and presided over by the administrator or such subordinate as may be designated to hear the matter the administrator designates.
SECTION 29. DFI-Bkg 11.06 (2) of the administrative code is amended to read:
DIF-Bkg 11.06 (2) Any person desiring a copy of the transcript shall so indicate at the commencement of the proceedings arrange for a court reporter, at the person’s expense, at least 30 days before the commencement of the proceedings and shall simultaneously so notify the administrator. In the alternative, any person desiring a copy of the transcript shall request that the administrator obtain the services of a court reporter to produce the transcript, at the person’s expense, at least 30 days before the commencement of the proceedings. The cost of each copy shall be paid by the person requesting it. A charge of 75¢ for each 8 1⁄2 by 11 inch page will be charged for copies prepared by the office of administrator. However, if the administrator determines that any party is impecunious or would suffer an undue economic hardship, such party shall be provided a copy of the transcript without charge. Where a transcript of proceedings, other than a contested case is prepared at the request of any party, such party shall also pay all recording and transcription costs.
SECTION 30. DFI-Bkg 11.07 of the administrative code is amended to read:
