Chapter 221

221.0324(3) (3) Temporary purposes. A bank may borrow money for temporary purposes, and may pledge assets of the bank not exceeding 50 percent in excess of the amount borrowed as collateral security for this borrowing, if the board of directors has adopted a resolution designating the lender from which the money may be borrowed, the maximum amount for which the bank may become indebted at any one time and the names of the officers who may sign the promissory note evidencing the indebtedness.

221.0324(4) (4) Bond requirements. A bank that is authorized to exercise trust powers and that complies with s. 223.02 is exempt from furnishing the bond specified in s. 221.0316 and is entitled to the same exemption as to making and filing any oath or giving any bond or security as is conferred on trust company banks by s. 223.03 (6) (a).

221.0324(5) (5) Pledges to federal reserve board. A bank may pledge assets in an amount not to exceed 4 times the amount of its capital to the federal reserve bank, as fiscal agent of the United States, of the federal reserve district in which it is located, except that no such pledge shall be made in excess of the amount of its capital without the consent of the division.

221.0324(6) (6) Borrowing to reloan. If a bank is borrowing habitually for the purpose of reloaning, the division may require the bank to repay money so borrowed.

221.0324(7) (7) Rediscounting and endorsing negotiable notes. This section does not prevent a bank from rediscounting in good faith and endorsing its negotiable notes, if authorized by a recorded resolution of the board of directors.

221.0324(8) (8) Certificates of deposit. A bank may not issue its certificate of deposit for the purpose of borrowing money. A bank may not make partial payments upon certificates of deposit.

221.0324(9) (9) Pledges to and loans from the federal home loan bank. Notwithstanding sub. (3), a bank that is a member of the federal home loan bank may borrow money from the federal home loan bank and may pledge bank assets as collateral to secure the loan or any other extension of credit from the federal home loan bank.

221.0324 History History: 1995 a. 336; 2001 a. 102; 2019 a. 65.

221.0325 221.0325 Certified checks. An officer, employee or agent of a bank may not certify a check, draft or order drawn upon the bank unless the person, firm or corporation drawing the check, draft or order has on deposit with the bank at the time the check, draft or order is certified an amount of money equal to the amount specified in the check, draft or order. A check, draft or order so certified by the duly authorized officer, employee or agent is a valid obligation against the bank.

221.0325 History History: 1995 a. 336.

221.0326 221.0326 Bad debts. All debts due a bank, on which interest is past due and unpaid for a period of 12 months, shall be considered bad debts and shall be charged off to the profit and loss account at the expiration of one year from the date on which the debt became past due, unless the debts are well secured or in process of collection.

221.0326 History History: 1995 a. 336.

221.0327 221.0327 Surplus fund.

221.0327(1) (1) Charges to surplus account. A loss sustained by a bank in excess of its undivided profits may be charged to its surplus account, if its surplus fund is thereafter reimbursed from its earnings. Cash dividends on capital stock may not be declared or paid by the bank in excess of 50 percent of its net earnings until its surplus fund is fully restored to the amount that was in the surplus account immediately preceding the charge of the loss.

221.0327(2) (2) Reimbursement of surplus and restricted dividends. If the surplus fund of a bank is in excess of 100 percent of its capital stock and if losses charged against it do not reduce the surplus account to an amount less than 100 percent of its capital stock, the bank is not subject to sub. (1) with respect to reimbursement of the surplus account and with respect to restricted dividends on capital stock.

221.0327 History History: 1995 a. 336.

221.0328 221.0328 Dividends.

221.0328(1) (1) When permitted. Except as provided in sub. (2), the board of directors of a bank may declare and pay a dividend from its undivided profits in an amount they consider expedient. The board of directors shall provide for the payment of all expenses, losses, required reserves, taxes, and interest accrued or due from the bank before the declaration of dividends from undivided profits. If dividends declared and paid in either of the 2 immediately preceding years exceeded net income for either of those 2 years respectively, the bank may not declare or pay any dividend in the current year that exceeds year-to-date net income except with the written consent of the division.

221.0328(2) (2) Liability of shareholders. A bank’s dividends may not in any way impair or diminish the capital of the bank other than by reducing undivided profits. If a dividend is paid that does not comply with this section, every shareholder receiving the dividend is liable to restore the full amount of the dividend unless the capital is subsequently made good.

221.0328(3) (3) Liability of directors. If the board of directors of a bank pays dividends when the bank is insolvent or in danger of insolvency, or not having reason to believe that there were sufficient undivided profits to pay the dividends, the members of the board of directors are jointly and severally liable to the creditors of the bank at the time of declaring dividends in an amount equal to twice the amount of the dividends.

221.0328(4) (4) Reduction of capital. Subject to the approval of the division, and subject to ss. 221.0211 (4) and 221.0323 (1) and (2), a bank may, by a vote of shareholders owning, in the aggregate, at least two-thirds of its capital stock, reduce its capital. Notwithstanding sub. (2) and subject to ss. 221.0216 (5) and 221.0327, as part of its capital reduction plan approved by the division in accordance with this subsection, and with the affirmative vote of shareholders owning at least two-thirds of the shares of each class of its stock outstanding, a bank may distribute cash or other assets to its shareholders.

221.0328 History History: 1995 a. 336; 2017 a. 340.

221.0329 221.0329 Savings promotion prize programs.

221.0329(1) (1) In this section:

221.0329(1)(a) (a) “Nonqualifying account” means a savings, time, or money market account that is not a qualifying account.

221.0329(1)(b) (b) “Qualifying account” means a savings, time, or money market account through which a bank’s depositors may obtain chances to win prizes in a savings promotion.

221.0329(1)(c) (c) “Savings promotion” means a contest or promotion to encourage savings deposits that is sponsored by one or more banks, or by a banking trade association or its subsidiary in conjunction with one or more banks, and in which bank depositors are offered a chance to win designated prizes.

221.0329(2) (2) A bank may sponsor, or participate in, a savings promotion if all of the following requirements are satisfied:

221.0329(2)(a) (a) Bank depositors are not required to pay any fee or otherwise provide any consideration in order to enter the savings promotion.

221.0329(2)(b) (b) All fees charged by a bank in connection with a qualifying account are comparable with all fees charged in connection with comparable nonqualifying accounts offered by the bank.

221.0329(2)(c) (c) Each entry in the savings promotion has an equal chance of winning.

221.0329(2)(d) (d) Participants in the savings promotion are not required to be present at a prize drawing in order to win.

221.0329(3) (3) For purposes of sub. (2) (a), a depositor’s deposit of at least a specified amount of money for at least a specified time in a qualifying account, which is required in order to enter the savings promotion, is not consideration if the interest rate associated with the qualifying account is not reduced, as compared to comparable nonqualifying accounts offered by the bank, to account for the possibility of winning a prize.

221.0329 History History: 2017 a. 72.

subch. IV of ch. 221 SUBCHAPTER IV

NAME

221.0401 221.0401 State bank. Every bank incorporated under this chapter shall be known as a state bank.

221.0401 History History: 1995 a. 336.

221.0402 221.0402 Use of “bank”.

221.0402(1) (1) Use of “bank”. Except as provided in sub. (2), a person who is engaged in business in this state, who is not subject to supervision and examination by the division, and who is not required to make reports to the division under this chapter, may not use the term “bank”, in any form upon any office sign at the place where the business is transacted. Except as provided in sub. (2), the person may not use or circulate letterheads, billheads, blank notes, blank receipts, certificates, circulars, or any written or printed or partly written and partly printed paper, containing an artificial or corporate name, or other words, that indicates that the person’s business is the business of a bank.

221.0402(2) (2) Exceptions.

221.0402(2)(a) (a) A check sold by a bank chartered under the laws of another state or a foreign country or a national bank authorized to do business in another state may use any form of “bank”, if the bank is licensed under ch. 217.

221.0402(2)(b) (b) Mortgage bankers licensed under s. 224.72 may use the designation “mortgage banker”.

221.0402(2)(c) (c) A savings bank organized under ch. 214 may use the designation “savings bank”.

221.0402(3) (3) Enforcement. Violations of this section may be enforced by the division under s. 220.02 (2).

221.0402 History History: 1995 a. 336; 1997 a. 35; 2009 a. 2.

221.0403 221.0403 Bank names.

221.0403(1) (1) In general. Except as provided in subs. (2) and (3), the name of a bank must be approved by the division and must be distinguishable upon the records of the division from all of the following names:

221.0403(1)(a) (a) The name of another state bank organized under this chapter.

221.0403(1)(b) (b) The name of a national bank or foreign bank authorized to transact business in this state.

221.0403(2) (2) Exceptions. A bank may apply to the division for the authority to use a name that is not distinguishable upon the records of the division from one or more of the names described in sub. (1). The division may authorize the use of the name if any of the following occurs:

221.0403(2)(a) (a) The other bank consents to the use in writing and submits an undertaking, in a form satisfactory to the division, to change its name to a name that is distinguishable upon the records of the division from the name of the applicant.

221.0403(2)(b) (b) The applicant delivers to the division a certified copy of the final judgment of a court of competent jurisdiction establishing the applicant’s right to use the name applied for in this state.

221.0403(3) (3) Use of same name. A bank may use the name that is used in this state by another bank organized under this chapter or authorized to transact business in this state if the bank proposing to use the name has done any of the following:

221.0403(3)(a) (a) Merged with the other bank.

221.0403(3)(b) (b) Been formed by reorganization of the other bank.

221.0403(3)(c) (c) Acquired all or substantially all of the assets, including the name, of the other bank.

221.0403(4) (4) Use of “savings”. A bank name may not contain the word “savings”.

221.0403 History History: 1995 a. 336.

221.0404 221.0404 Deceptive or misleading use of bank name, logo, or symbol.

221.0404(1) (1) Use of bank name, logo, or symbol for marketing purposes. Except as provided in sub. (3), no person may use the name, logo, or symbol, or any combination thereof, of a bank, or any name, logo, or symbol, or any combination thereof, that is deceptively similar to the name, logo, or symbol of a bank, in any marketing material provided to or solicitation of another person in a manner such that a reasonable person may believe that the marketing material or solicitation originated from or is endorsed by the bank or that the bank is responsible for the marketing material or solicitation.

221.0404(2) (2) Enforcement and penalties. The division shall direct any person the division finds to have violated sub. (1) to cease and desist from violating sub. (1). If a person violates sub. (1) after receiving such direction, the division may impose a forfeiture of up to $1,000 for each violation. Each instance in which marketing material is provided to another person or solicitation of another person takes place in violation of sub. (1) constitutes a separate violation. This subsection does not affect the availability of any remedies otherwise available to a bank.

221.0404(3) (3) Exceptions. Subsection (1) does not apply to a person who uses the name, logo, or symbol of a bank in any of the following circumstances:

221.0404(3)(a) (a) With the consent of the bank.

221.0404(3)(b) (b) If the person is the bank, an affiliate of the bank, or an agent of the bank.

221.0404 History History: 2003 a. 262.

subch. V of ch. 221 SUBCHAPTER V

SHARES AND SHAREHOLDERS

221.0501 221.0501 Quorum and voting requirements for voting groups.

221.0501(1) (1) Quorum requirement. Shares entitled to vote as a separate voting group may take action on a matter at a meeting only if a quorum of those shares exists with respect to that matter. Unless the articles of incorporation, the bylaws or this chapter provide otherwise, a majority of the votes entitled to be cast on the matter by the voting group constitutes a quorum of that voting group for action on that matter.

221.0501(2) (2) Method of determining quorum. If a share is represented for any purpose at a meeting, other than for the purpose of objecting to holding the meeting or transacting business at the meeting, the share is considered present for purposes of determining whether a quorum exists for the remainder of the meeting and for any adjournment of that meeting, unless a new record date is or must be set for that adjourned meeting.

221.0501(3) (3) Simple majority voting. If a quorum exists, action on a matter by a voting group is approved if the votes cast within the voting group favoring the action exceed the votes cast opposing the action, unless the articles of incorporation, the bylaws or this chapter require a greater number of affirmative votes.

221.0501 History History: 1995 a. 336.

221.0502 221.0502 Greater or lower quorum or greater voting requirements.

221.0502(1) (1) Method of specifying different requirements. The articles of incorporation may provide, or authorize the bylaws under s. 221.0503 to provide, for a greater or lower quorum requirement or a greater voting requirement for shareholders or voting groups of shareholders than is provided by this chapter.

221.0502(2) (2) Amendments to articles of incorporation to change requirements. An amendment to the articles of incorporation that adds, changes or deletes a greater or lower quorum requirement or a greater voting requirement must meet the same quorum requirement and be adopted by the same vote and voting groups required to take action under the quorum and voting requirements then in effect.

221.0502 History History: 1995 a. 336.

221.0503 221.0503 Bylaw fixing quorum or voting requirements for shareholders.

221.0503(1) (1) In general. If authorized by the articles of incorporation, the shareholders may adopt or amend a bylaw that fixes a greater or lower quorum requirement or a greater voting requirement for shareholders or voting groups of shareholders than is provided by this chapter. The adoption or amendment of a bylaw that adds, changes or deletes a greater or lower quorum requirement or a greater voting requirement for shareholders must meet the same quorum requirement and be adopted by the same vote and voting groups required to take action under the quorum and voting requirement then in effect.

221.0503(2) (2) Shareholder approval. A bylaw that fixes a greater or lower quorum requirement or a greater voting requirement for shareholders under sub. (1) may not be adopted, amended or repealed by the board of directors.

221.0503 History History: 1995 a. 336.

221.0504 221.0504 Number of shareholders.

221.0504(1) (1) Method of counting. For purposes of this chapter, any of the following constitutes one shareholder if identified as a shareholder in a bank’s current record of shareholders:

221.0504(1)(a) (a) Three or fewer co-owners.

221.0504(1)(b) (b) An entity.

221.0504(1)(c) (c) The trustees, guardians, custodians or other fiduciaries of a single trust, estate or account.

221.0504(2) (2) Substantially similar names. For purposes of this chapter, shareholdings registered in substantially similar names constitute one shareholder if it is reasonable to believe that the names represent the same person.

221.0504 History History: 1995 a. 336.

221.0505 221.0505 Issued and outstanding shares.