Chapter 221

BANK ORGANIZATION

221.0201 221.0201 Applicants. Any number of adult residents of this state, not less than 3 nor more than 20, who desire to associate for the purpose of organizing a banking corporation under this chapter, may apply to the division to organize a bank. The application shall be made on a form prescribed by the division.

221.0201 History History: 1995 a. 336.

221.0202 221.0202 Application.

221.0202(1) (1) Contents. An application under s. 221.0201 shall be prepared and filed in duplicate, and shall include all of the following:

221.0202(1)(a) (a) The location of the proposed bank.

221.0202(1)(b) (b) The character of the business to be transacted by the proposed bank.

221.0202(1)(c) (c) The proposed capital of the proposed bank.

221.0202(1)(d) (d) The full name, residence, and occupation of each applicant.

221.0202(1)(e) (e) Other information required by the division.

221.0202(2) (2) Notice of application. Upon receipt by the division of properly executed application, the division shall, within 5 days, forward to the applicants a copy of a notice of application for authority to organize a bank. The notice of application shall contain the information required under sub. (1) and a date and place for hearing on the application. The notice shall be published as a class 3 notice, under ch. 985, by the applicants, at their own expense, in the city, village or town where the bank is to be located. Proof of publication shall be filed with the division in such form as the division requires. The division may waive the requirement of publication, if the bank to be organized is to replace, absorb or consolidate one or more existing banks.

221.0202(3) (3) Fee. The applicants shall pay to the division a fee in an amount determined by the division, together with the actual costs incurred by the division in making an investigation under sub. (4) of the application.

221.0202(4) (4) Investigation.

221.0202(4)(a) (a) At the hearing and by such investigation as the division considers necessary, the division shall consider all of the following:

221.0202(4)(a)1. 1. Whether the character, responsibility and general fitness of the persons named in the application command confidence and warrant the belief that the business of the proposed bank will be honestly and efficiently conducted in accordance with this chapter.

221.0202(4)(a)2. 2. Whether public convenience and advantage will be promoted by allowing the bank to organize.

221.0202(4)(a)3. 3. The character and experience of the proposed officers.

221.0202(4)(a)4. 4. The adequacy of existing banking facilities and the need of further banking capital.

221.0202(4)(a)5. 5. The outlook for the growth and development of the area where the bank is to be located.

221.0202(4)(a)6. 6. The methods and banking practices of any existing banks in the area where the bank is to be located; the interest rate that these existing banks charge to borrowers; and the character of the service which these existing banks provide to the community.

221.0202(4)(a)7. 7. The prospects for the success of the proposed bank if efficiently managed.

221.0202(4)(b) (b) The division shall complete the investigation within 90 days after the filing with the division of proof of publication under sub. (2) and the paying of the fee under sub. (3), whichever is later. If a majority of the applicants and the division mutually agree, the time may be extended for an additional period of 60 days.

221.0202(5) (5) Decision. After completing the investigation under sub. (4), the division shall make a written report to the banking institutions review board stating the results of the investigation and the division’s recommendation. The board shall consider the matter, conduct any necessary hearing, and promptly make its decision approving or disapproving the application. The decision shall be final except pursuant to s. 220.035 (1) and (3). If the application is approved, the division shall endorse on each of the original applications the word “Approved”. If the application is disapproved, the division shall endorse the word “Disapproved”. One of the duplicate originals shall be filed in the division’s office and one shall be returned by mail to the applicants.

221.0202 History History: 1995 a. 336; 2019 a. 65.

221.0203 221.0203 Certificate of authority.

221.0203(1) (1) Powers granted by certificate. If an application for authority to organize a banking corporation is approved, the division shall issue a certificate of authority to the applicants, who shall thereafter be known as the incorporators. The certificate of authority shall grant the incorporators such powers as are incidentally or necessarily preliminary to the organization of a banking corporation. These powers include all of the following:

221.0203(1)(a) (a) Creating a temporary organization, consisting of a chairperson, a secretary and a treasurer.

221.0203(1)(b) (b) Executing and filing articles of incorporation.

221.0203(1)(c) (c) Adopting rules for the conduct of meetings of the incorporators and of the first meeting of the shareholders.

221.0203(1)(d) (d) Opening subscription books for stock.

221.0203(1)(e) (e) Securing an option on real estate to be used as a bank office.

221.0203(1)(f) (f) Fixing an amount at which the stock shall be sold.

221.0203(1)(g) (g) Collecting subscriptions to the stock.

221.0203(1)(h) (h) Selecting a depository for funds as may be collected.

221.0203(1)(i) (i) Appointing any agent or agents.

221.0203(1)(j) (j) Compiling a set of bylaws for submission to the shareholders.

221.0203(2) (2) Voting requirements. Following the incorporation of a bank, an action permitted by this chapter to be taken by its incorporators may be taken by the majority of its incorporators or the survivors of the incorporators.

221.0203 History History: 1995 a. 336.

221.0204 221.0204 Temporary organization. The chairperson of the incorporators shall preside at all meetings and shall exercise other duties that are ordinarily performed by a chairperson. The secretary shall manage the correspondence of the incorporators, record fully all proceedings of the meetings of the incorporators, file and preserve all documents and papers of the organization, and file any necessary papers with the division. The treasurer shall receive all moneys paid in on subscriptions to stock or for other purposes, keep a true account thereof, deposit these funds in the designated depository, and pay such valid orders as may be drawn on the treasurer. The incorporators shall require a bond in a suitable amount from the treasurer and from other officers and agents who may handle the funds of the proposed bank. The incorporators shall audit claims against the proposed bank and record of action on these claims in the minutes. If a claim is ordered paid, an order shall be drawn upon the treasurer and signed by the chairperson and secretary. Until the completion of the organization of the proposed bank, the incorporators may exercise the powers conferred upon incorporators of corporations under ch. 180, to the extent that these powers are not in conflict with this chapter.

221.0204 History History: 1995 a. 336.

221.0205 221.0205 Capital stock. Immediately following a bank’s organization under this chapter, the division shall determine the required capital of the bank, subject to review by the banking institutions review board. In addition to the required capital stock, a contingent fund and paid-in surplus each in an amount equal to at least 25 percent of the aggregate amount of the capital stock, shall be subscribed at the time the subscription list of shareholders is prepared by the incorporators.

221.0205 History History: 1995 a. 336; 1997 a. 146; 2019 a. 65.

221.02055 221.02055 Reserves.

221.02055(1) (1) Definitions. In this section:

221.02055(1)(a) (a) “Municipal obligation” has the meaning given in s. 67.01 (6).

221.02055(1)(b) (b) “Short-term” means maturing within 18 months or less.

221.02055(2) (2) Reserve requirements. A bank shall maintain sufficient reserves to meet anticipated withdrawals, commitments and loan demand. A bank shall maintain at least the level of reserves required for it by the federal reserve system. The division may prescribe additional reserve requirements for an individual bank based on examination findings or other reports available to the division.

221.02055(3) (3) Permitted reserves. A bank’s reserves consist of all of the following:

221.02055(3)(a) (a) Cash.

221.02055(3)(b) (b) Cash items in the process of collection.

221.02055(3)(c) (c) Short-term obligations of or demand balances with other insured financial institutions in the United States.

221.02055(3)(d) (d) Short-term obligations of or guaranteed by the federal government.

221.02055(3)(e) (e) Short-term obligations of this state.

221.02055(3)(f) (f) Short-term municipal obligations.

221.02055(3)(g) (g) Short-term obligations approved by rule of the division.

221.02055(3)(h) (h) Balances with federal reserve banks.

221.02055(4) (4) Effect of insufficient reserves. If the reserves of a bank fall below the reserves required under sub. (2), the bank may not increase its loans or discounts, except by discounting or purchasing bills of exchange payable at sight or on demand. The division shall notify a bank whose reserves are below the reserves required under sub. (2) that the bank shall make good its reserves. If the bank fails for 30 days thereafter to make good such reserves, the division may assess the bank $100 for each 2-week period during which the bank has not made good its reserves and may notify the attorney general and the department of justice shall institute proceedings for the appointment of a receiver and to wind up the business of the bank. The assessment shall be paid to the division and, if any such bank fails or refuses to pay the assessment, the division may maintain an action for the recovery of the assessment.

221.02055 History History: 1995 a. 336.

221.0206 221.0206 Articles of incorporation.

221.0206(1) (1) Time for filing. The incorporators shall file articles of incorporation with the division within a reasonable time, as determined by the division, from the date on which the division approved the certificate of authority. If the incorporators do not file the articles of incorporation within this period, all rights of the incorporators cease and the certificate of authority to organize is void.

221.0206(2) (2) Form and contents.

221.0206(2)(a) (a) The articles of incorporation shall be executed in duplicate, and shall be signed by the majority of the incorporators. All signers must be residents of this state and must be subscribers to stock of the bank or of a bank holding company of the bank.

221.0206(2)(b) (b) The articles of incorporation shall contain all of the following:

221.0206(2)(b)1. 1. A declaration that the incorporators associate for the purpose of forming a banking corporation under this chapter and stating whether the bank is a state bank or a trust company bank.

221.0206(2)(b)2. 2. The name of the bank.

221.0206(2)(b)3. 3. The county and the village, town or city where the bank is to be located.

221.0206(2)(b)4. 4. The amount of the bank’s capital stock.

221.0206(2)(b)5. 5. Before issuing more than one class of shares, all of the following:

221.0206(2)(b)5.a. a. The distinguishing designation of each class.

221.0206(2)(b)5.b. b. The number of shares of each class that the bank is authorized to issue.

221.0206(2)(b)5.c. c. The preferences, limitations and relative rights of that class.

221.0206(2)(b)6. 6. Before the issuance of one or more series of shares within a class of shares, all of the following:

221.0206(2)(b)6.a. a. The distinguishing designation of each series within a class.

221.0206(2)(b)6.b. b. The number of shares of each series that the bank is authorized to issue.

221.0206(2)(b)6.c. c. The preferences, limitations and relative rights of that series.

221.0206(2)(b)7. 7. Any other lawful provisions defining and regulating the powers or business of the bank, its officers or directors; the transfer of its stock; and the disposition of new stock that may be created by amending the articles of incorporation to increase the bank’s capital.

221.0206(3) (3) Approval or disapproval. The division shall, in the division’s discretion, approve or disapprove the articles of incorporation. If approved, the division shall endorse on each of the 2 duplicate originals the word “Approved”. If disapproved, the division shall endorse on each of the 2 duplicate originals the word “Disapproved”. The division shall file one of the originals and shall send the remaining original to the incorporators, together with a certificate showing the date of filing, the approval or disapproval and the date of the approval or disapproval. If the articles of incorporation are approved, the copy sent to the incorporators shall be filed with the records of the bank.

221.0206(4) (4) Fees. The incorporators shall pay a fee to the division when the articles of incorporation are filed. The fee shall be in an amount determined by the division.

221.0206 History History: 1995 a. 336.

221.0207 221.0207 Filed documents.

221.0207(1) (1) Proposed bylaws and shareholder list. Within 90 days after the filing of the articles of incorporation under s. 221.0206, unless extended by the division, the incorporators shall file with the division, in duplicate, the proposed bylaws and a complete list of the shareholders of the proposed bank. The list of shareholders shall show the number of shares held by each shareholder and the post-office address of each shareholder. On approval by the division, the bylaws shall be submitted for consideration by the shareholders.

221.0207(2) (2) Sworn declaration. Within the period for filing under sub. (1), the incorporators shall also file a declaration subscribed and sworn to by each of the incorporators, stating that, to the best of their knowledge and belief, all of the following are true:

221.0207(2)(a) (a) All shareholders have subscribed for the stock accredited to them in the list of shareholders, in good faith and not as the representative or agent of any corporation or other person.

221.0207(2)(b) (b) One hundred percent of each stock subscription has been paid in lawful money.

221.0207(2)(c) (c) No incorporator has entered into any agreement or promise that the bank, when open, shall loan to any shareholder funds for the purpose of paying any indebtedness that may have been incurred by a shareholder to obtain funds to purchase shares of the bank.

221.0207(2)(d) (d) All money received in payment of stock subscriptions, except such amount as may have been paid out by order of the incorporators, is on deposit to the credit of the incorporators in the designated depository.

221.0207 History History: 1995 a. 336.

221.0208 221.0208 Charter.

221.0208(1) (1) Notice required.