Chapter 221

221.0216(3) (3) Changes relating to preferred stock. No change in relation to preferred stock may be made except by an amendment to the articles of incorporation that is approved by all of the following:

221.0216(3)(a) (a) A vote of the shareholders owning a majority of the preferred stock of the bank who are entitled to vote or such greater percentage required under the articles of incorporation or bylaws.

221.0216(3)(b) (b) A vote of the shareholders owning a majority of the capital stock of the bank entitled to vote or such greater percentage required under the articles of incorporation or bylaws.

221.0216(3)(c) (c) The division.

221.0216(4) (4) Liability of holders of preferred stock. Preferred stock of a bank is not subject to an assessment to restore an impairment in the capital of the bank. A holder of preferred stock of a bank is not individually responsible, in the shareholder’s capacity as a shareholder, for any debt, contract or acknowledgment of a bank.

221.0216(5) (5) Dividend rights. A dividend may not be declared or paid on capital stock until the cumulative dividends on the preferred stock have been paid in full. If the bank is placed in liquidation, a payment may not be made to the holders of the capital stock if the holders of the preferred stock have not been paid in full the par value of the stock plus all cumulative dividends.

221.0216 History History: 1995 a. 336; 1997 a. 35, 146.

221.0217 221.0217 Reorganization of a state bank as a national bank. A bank organized under this chapter may reorganize under the laws of the United States as a national bank. When the bank has obtained a certificate from the U.S. comptroller of the currency authorizing it to commence business under the federal banking law, the bank is reorganized as a national bank. The reorganized bank takes and holds all of the assets, real and personal, of the bank organized under this chapter, subject to all liabilities existing against the bank at the time of the reorganization. The reorganized bank shall immediately notify the division of the reorganization.

221.0217 History History: 1995 a. 336.

221.0218 221.0218 Reorganization of a national bank as a state bank. A national bank that is authorized to dissolve and that has taken the necessary steps to effect a dissolution, may reorganize as a state bank under this chapter, with the approval of the division and upon the consent in writing of the shareholders owning a majority of the stock of the bank entitled to vote or such greater percentage required in the articles of incorporation or bylaws. The shareholders shall make, execute and acknowledge articles of incorporation as required by this chapter. A national bank seeking to reorganize under this section shall pay to the division a fee determined by the division, plus the actual costs incurred by the division in investigating the proposed reorganization. Upon the filing of articles of incorporation under this chapter and upon the approval of the division, the bank is reorganized under this chapter, and the assets, real and personal, of the dissolved national bank become the property of the reorganized bank, subject to all liabilities of the national bank not liquidated before the reorganization.

221.0218 History History: 1995 a. 336.

221.0219 221.0219 Conversion of a credit union to a state bank. A credit union under ch. 186 may become a state bank under this chapter by doing all of the following:

221.0219(1) (1) Applying to the division of banking for authority to organize as a bank under this chapter and satisfying all requirements under this chapter for organizing as a bank.

221.0219(2) (2) Satisfying all requirements under s. 186.314 (2m) for conversion to a state bank.

221.0219(3) (3) Recording the bank’s articles of incorporation in the county in which its home office is located.

221.0219 History History: 2011 a. 32.

subch. III of ch. 221 SUBCHAPTER III

PURPOSES AND POWERS

221.0301 221.0301 General powers. Upon approval of the articles of incorporation by the division, the bank is a body corporate and, except as provided in sub. (6), has perpetual duration. In addition to all other powers granted under this chapter, a bank has all of the following powers:

221.0301(1) (1) Power to contract. To make contracts necessary and proper to effect its purpose and conduct its business.

221.0301(2) (2) Power to sue. To sue and be sued, and to appear and defend in all actions and proceedings under its corporate name to the same extent as a natural person.

221.0301(3) (3) Corporate seal. To adopt and use a corporate seal and alter the same at pleasure.

221.0301(4) (4) Officers and agents. To elect or appoint officers, agents and employees, define their duties and obligations, require bonds of them, fix their compensation, dismiss them and fill vacancies.

221.0301(5) (5) Business of banking. To exercise by its board of directors, or duly authorized officers or agents, all incidental powers necessary to carry on the business of banking. A bank may exercise the powers granted by this subsection to carry on the business of banking at a branch bank. Powers granted under this subsection include all of the following:

221.0301(5)(a) (a) Buying, discounting and negotiating promissory notes, bonds, drafts, bills of exchange, foreign and domestic, and other evidences of debt.

221.0301(5)(b) (b) Buying and selling coin and bullion.

221.0301(5)(c) (c) Receiving commercial and savings deposits under such conditions as the bank may establish.

221.0301(5)(d) (d) Buying and selling exchange.

221.0301(5)(e) (e) Making loans on personal and real security in accordance with this chapter.

221.0301(6) (6) Succession. To have succession until any of the following occurs:

221.0301(6)(a) (a) The bank is dissolved by the act of its shareholders owning a majority of the stock of the bank entitled to vote or such greater percentage required under its articles of incorporation or bylaws.

221.0301(6)(b) (b) The bank’s corporate existence becomes terminated by a provision in its articles of incorporation.

221.0301(6)(c) (c) The bank’s charter is forfeited under s. 220.08 (18) or 221.0803.

221.0301(7) (7) Intermediary or payer bank. To establish and maintain facilities for the receipt of checks and other transit items as an intermediary or payer bank in bank-to-bank transactions.

221.0301(8) (8) Services to other depository institutions. To contract with one or more depository institutions to provide banking and financially related products or services on its behalf to its customers, except that no contract is required for the acceptance of deposits of customers at affiliated banks. A bank that proposes to enter into a contract under this subsection shall file with the division, at least 30 days before the effective date of the contract, a notice of intention to enter into a contract with a depository institution, a description of the services proposed to be performed under the contract and a copy of the contract. A bank may not, pursuant to a contract under this subsection, conduct any activity as an agent that it would be prohibited from conducting as a principal under applicable state or federal law, or have an agent conduct any activity that the bank as a principal would be prohibited from conducting under applicable state or federal law. The division may order a bank or any other depository institution subject to the division’s enforcement powers to cease acting as an agent or principal under any contract that the division finds to be inconsistent with safe and sound banking practices.

221.0301(9) (9) Other. To exercise such other powers as may be provided or permitted under this chapter.

221.0301 History History: 1995 a. 336.

221.0302 221.0302 Branch banks and other facilities.

221.0302(1g) (1g) Definitions. In this section:

221.0302(1g)(a) (a) “Affiliate” means any company that directly or indirectly controls, or is under common control with, another company.

221.0302(1g)(b) (b) “Bank holding company” has the meaning given in 12 USC 1841 (a).

221.0302(1g)(c) (c) “Commercial activities” means those activities in which a bank holding company, financial holding company, national bank, state bank, as defined in s. 221.0903 (1) (e), or state bank certified under ch. 222 as a universal bank are not authorized to engage under federal or state law.

221.0302(1g)(d) (d) “Company” has the meaning given in s. 221.0901 (2) (f).

221.0302(1g)(e) (e) “Financial holding company” has the meaning given in 12 USC 1841 (p).

221.0302(1m) (1m) Establishment. A bank may establish and maintain a branch bank or joint branch bank with the approval of the division.

221.0302(2) (2) Conversion. A bank may be converted to a branch bank of the surviving bank of a merger or consolidation under s. 221.0702. A branch of a bank converted into a branch bank becomes a branch of the surviving bank.

221.0302(3) (3) Transfer. A bank may transfer a branch bank to any other bank located in this state with the approval of the division. A bank may transfer a branch bank to a bank located in another state only if the division has determined under s. 221.0904 (3) (b) that the state’s laws are reciprocal regarding establishing branches.

221.0302(4) (4) Out-of-state branches. A bank may establish a branch bank in another state with the approval of the division.

221.0302(5) (5) Activities not considered branch banking. The following activities do not constitute the establishment or maintenance of a branch bank or a joint branch bank:

221.0302(5)(a) (a) Picking up deposits and delivering money to bank customers at locations designated by the bank.

221.0302(5)(b) (b) Establishing or maintaining a facility under s. 221.0301 (7).

221.0302(5)(c) (c) Acting as an agent, or having another bank act as agent, under s. 221.0301 (8).

221.0302(5)(d) (d) Operating a trust service office under s. 221.0316 (4).

221.0302(6) (6) Application. A bank shall apply for the establishment or transfer of a branch bank under this section to the division on a form furnished by the division. The application shall be accompanied by a fee determined by the division.

221.0302(7) (7) Standards for approval.

221.0302(7)(a) (a) General. Except as provided in par. (b), the division shall approve the establishment of a branch bank under sub. (1m) or the conversion of a bank to a branch bank under sub. (2) if the financial and managerial resources and future prospects of the bank establishing a branch bank, or the surviving bank of a merger or consolidation, are satisfactory to the division.

221.0302(7)(b) (b) Location restrictions; certification of compliance. The division may not approve the establishment of a branch bank under sub. (1m), the conversion of a bank to a branch bank under sub. (2), or the transfer of a branch bank under sub. (3) if the establishment, conversion, or transfer would violate sub. (8m). Each bank shall certify to the division that the location of a branch bank complies with sub. (8m).

221.0302(8) (8) Applicability of laws and rules governing banks. Branch banks are subject to all laws and rules applicable to banks generally.

221.0302(8m) (8m) Location restrictions for branch banks. Except as provided in sub. (10) (b), no bank may directly or indirectly establish or maintain in this state a branch bank that is located within a 1.5-mile radius of premises or property owned, leased, or otherwise controlled, directly or indirectly, by an affiliate of the bank that engages in commercial activities. No bank may circumvent the prohibition in this subsection by first establishing a branch bank and then locating, or attempting to influence or facilitate the location of, an office of the bank’s affiliate engaged in commercial activities within a 1.5-mile radius of the location of the branch bank.

221.0302(9) (9) Closure of branch banks. At least 30 days before closing a branch bank, a bank shall notify the division in writing and post a notice of the closing in the lobby of the bank and the lobby of the branch bank to be closed.

221.0302(10) (10) Exemptions.

221.0302(10)(a) (a) Grandfathered branch banks. Every branch bank, branch office, or bank station existing on August 1, 1989, is considered to be a branch bank approved by the division under this paragraph.

221.0302(10)(b) (b) Exemption from location restrictions. Subsections (7) (b) and (8m) do not apply to any bank branch approved by the division on or before April 2, 2008.

221.0302 History History: 1995 a. 336; 1997 a. 146; 2005 a. 217; 2007 a. 112.

221.0302 Cross-reference Cross-reference: See also ch. DFI-Bkg 8, Wis. adm. code.

221.0303 221.0303 Customer bank communications terminals.

221.0303(1) (1) Definition. In this section, “customer bank communications terminal” means a terminal or other facility or installation, attended or unattended, that is not located at the principal place of business or at a branch or remote facility of a bank and through which customers and banks may engage, by means of either the direct transmission of electronic impulses to and from a bank or the recording of electronic impulses or other indicia of a transaction for delayed transmission to a bank, in transactions which are incidental to the conduct of the business of banking and which are otherwise permitted by law. “Customer bank communications terminal” also includes all equipment, regardless of location, which is interconnected with a customer bank communications terminal and which is necessary to transmit, route and process electronic impulses in order to enable the customer bank communications terminal to perform any function for which it is designed.

221.0303(2) (2) Operation and acquisition of customer bank communications terminals. A bank may, directly or indirectly, acquire, place, and operate, or participate in the acquisition, placement, and operation of, at locations other than its main or branch offices, customer bank communications terminals, in accordance with rules established by the division. The rules of the division shall provide that any such customer bank communications terminal shall be available for use, on a nondiscriminatory basis, by any state or national bank and by all customers designated by a bank using the terminal. This subsection does not authorize a bank which has its principal place of business outside this state to conduct banking business in this state. The customer bank communications terminals also shall be available for use, on a nondiscriminatory basis, by any credit union, savings and loan association, or savings bank, if the credit union, savings and loan association, or savings bank requests to share its use, subject to rules jointly established by the division of banking and the office of credit unions.

221.0303(3) (3) Terminals owned or operated by retailers. If a person who is primarily engaged in the retail sale of goods or services owns or operates a customer bank communications terminal on the person’s premises and allows access to the terminal by any financial institution, group of financial institutions, or their customers for any purpose or function, then all of the following apply:

221.0303(3)(a) (a) The division may not require the person to accept any connection to or use of the customer bank communications terminal on its premises for any other purpose or function, or to accept any connection to the terminal on its premises by any other financial institution.

221.0303(3)(b) (b) This chapter, and the rules promulgated by the division, do not apply to the person, except for laws or rules directly related to the particular function performed by the terminal on such person’s premises for a financial institution.

221.0303(4) (4) Use of transmitted information. Information transmitted from a customer bank communications terminal, either identified as to particular transactions or aggregate information, may be used only for purposes of effecting the financial transactions for which the information was received, for any other purpose lawfully authorized by contract or for any other purpose permitted by statute or rules pertaining to the dissemination and disclosure of such information.

221.0303 History History: 1995 a. 336; 1997 a. 27; 1999 a. 9; 2003 a. 33; 2021 a. 240 s. 30; 2023 a. 128.

221.0303 Cross-reference Cross-reference: See also s. DFI-Bkg 14.02, Wis. adm. code.

221.0304 221.0304 Safe deposits. A bank may take and receive personal property from any person for safekeeping and storage and may rent out the use of safes or other receptacles upon its premises upon such compensation as may be agreed upon. The bank has a lien for its charges on any property taken or received by it for safekeeping. If the lien is not paid within 2 years after the date the charges accrue, or if the property taken or received by the bank is not called for within 2 years after the date the charges accrue, the bank may sell the property at public auction. The bank shall provide such notice as is required for the sale of personal property on execution. After retaining from the proceeds of such sale all the liens and charges due the bank and the reasonable expenses of the sale, the bank shall pay the balance to the person who deposited the property, or to the person’s legal representatives or assignees.

221.0304 History History: 1995 a. 336.

221.0305 221.0305 Memberships and investments in federal reserve bank. A bank may purchase and hold, for the purpose of becoming a member of the federal reserve bank, so much of the capital stock of the federal reserve bank as will qualify it for membership under 12 USC 321 to 339 in the federal reserve bank. The bank may become a member of the federal reserve bank, and may have and exercise all powers, not in conflict with the laws of this state, that are conferred upon a member bank. The member bank and its directors, officers and shareholders remain subject to all liabilities and duties imposed upon them by the laws of this state.

221.0305 History History: 1995 a. 336.

221.0306 221.0306 Memberships and investments in federal home loan bank.

221.0306(1) (1) Permitted activities. Subject to review by the division under sub. (2), a bank may, with the approval of its board of directors, purchase and hold capital stock of the federal home loan bank for the purpose of becoming a member of the federal home loan bank under 12 USC 1421 to 1449. A bank that becomes a member may exercise borrowing privileges or use any other services offered to a member by the federal home loan bank, if the privileges or services are not in conflict with the laws of this state. Without becoming a member, a bank may exercise deposit privileges and use other services offered to nonmembers by the federal home loan bank.

221.0306(2) (2) Notice and review. A bank that intends to become a member of the federal home loan bank shall give the division written notice of its intention to apply for membership. The division may prohibit a bank from becoming a member if the bank’s capital and undistributed surplus is less than the amount required for that bank or if the division finds that the bank is in an unsafe or unsound condition. The division shall have 30 days after the date on which the notice is received to issue a prohibition under this subsection. The division may extend the time for issuing a prohibition up to 30 additional days if the division notifies the bank before the initial 30-day period expires that the division is extending the time limit.

221.0306 History History: 1995 a. 336.

221.0307 221.0307 Memberships and investments in other state and federal agencies. A bank may, with the approval of the division and by action of the bank’s board of directors, acquire and hold the stock of any state or federal agency or of any similar institution approved by the division. A bank that intends to make such an investment shall give the division written notice of its intention. The division may disallow the investment if it finds that the bank is in an unsafe or unsound condition or that the transaction would be an unsafe or unsound investment for the bank. The division shall have 30 days after the date on which notice is received to issue a prohibition under this section. The division may extend the time for issuing the prohibition to 30 additional days if the division notifies the bank before the initial 30-day period expires that the division is extending the time limit.

221.0307 History History: 1995 a. 336.

221.0308 221.0308 Benefits under federal law; Federal Deposit Insurance Corporation. A bank may, by action of its board of directors, enter into such contracts, incur such obligations and perform such acts as may be necessary or appropriate in order to take advantage of any and all memberships, loans, subscriptions, contracts, grants, rights or privileges that may at any time be available or inure to banking institutions or to their depositors, creditors, shareholders, conservators, receivers or liquidators, by virtue of any federal law establishing the Federal Deposit Insurance Corporation; providing for the insurance of deposits; or regulating or safeguarding banking institutions and their depositors. A bank may also subscribe for and acquire any stock, debenture, bond or other type of security of the Federal Deposit Insurance Corporation. A bank that becomes a member of the Federal Deposit Insurance Corporation shall comply with the lawful regulations and requirements issued by the Federal Deposit Insurance Corporation. The bank and its directors, officers and shareholders shall continue to be subject to all liabilities and duties imposed upon them by any laws of this state.

221.0308 History History: 1995 a. 336.

221.0309 221.0309 Investments in international banking and financial institutions. A bank may, with the approval of the division, invest an amount not exceeding in the aggregate 15 percent of its capital in one or more corporations principally engaged in international or foreign banking, or banking in dependencies or insular possessions of the United States, organized pursuant to 12 USC 611 to 631. A bank may also invest, with the approval of the division, an amount not exceeding in the aggregate 10 percent of its capital in the stock of one or more corporations principally engaged in international or foreign financial operations other than banking, as well as such financial operations in dependencies or insular possessions of the United States, organized pursuant to 12 USC 611 to 631.

221.0309 History History: 1995 a. 336.

221.0310 221.0310 Federal National Mortgage Association. A bank that has loans secured by real estate mortgages may, with the approval of the division, sell all or any portion of the loans to the Federal National Mortgage Association, or any successor to that association. In connection with this sale of loans, the bank may make payments of any required capital contributions in the nature of subscriptions for stock of the Federal National Mortgage Association or any successor to that association, may receive stock evidencing these capital contributions and may hold or dispose of this stock.