Chapter DFI-Bkg 4

DFI-Bkg 4.02(35) (35) Acting as a finder pursuant to 12 CFR 7.1002.

DFI-Bkg 4.02(36) (36) Offering debt cancellation or debt suspension agreements.

DFI-Bkg 4.02(37) (37) Acting as a transfer or fiscal agent.

DFI-Bkg 4.02(38) (38) Providing or selling public transportation tickets, event and attraction tickets, gift certificates, prepaid phone cards, promotional and advertising material, postage stamps, and Electronic Benefits Transfer (EBT) script, and similar media, to the extent permitted by published Office of the Comptroller of the Currency precedent, subject to the terms and conditions contained in that precedent.

DFI-Bkg 4.02 History History: Cr. Register, October, 2000, No. 538, eff. 11-1-00.

DFI-Bkg 4.03 DFI-Bkg 4.03 Control and interest. Subject to ss. DFI-Bkg 4.04 and 4.05, a financial institution may control a financial subsidiary or hold an interest in a financial subsidiary to engage in financial activities.

DFI-Bkg 4.03 History History: Cr. Register, October, 2000, No. 538, eff. 11-1-00.

DFI-Bkg 4.04 DFI-Bkg 4.04 Application. A financial institution desiring to control or hold an interest in a financial subsidiary shall apply to the division on forms prescribed by the division and shall pay the fee to be prescribed by the division. An application submitted to the division shall either be approved or disapproved by the division in writing within 30 days after its submission to the division. The division and the financial institution may mutually agree to extend the period in which the division makes a decision on the application for an additional period of 30 days.

DFI-Bkg 4.04 Note Note: A copy of the forms may be obtained at no charge from the Department of Financial Institutions, Division of Banking, 4822 Madison Yards Way, North Tower, 5th Floor, P.O. Box 7876, Madison, WI 53707-7876, tel. [phone].

DFI-Bkg 4.04 History History: Cr. Register, October, 2000, No. 538, eff. 11-1-00.

DFI-Bkg 4.05 DFI-Bkg 4.05 Conditions and requirements.

DFI-Bkg 4.05(1) (1) A financial institution may control a financial subsidiary or hold an interest in a financial subsidiary to engage in financial activities only if the financial subsidiary engages in financial activities or activities in which the financial institution is permitted to engage under other applicable law. The financial subsidiary may also engage in any other activity approved by rule of the division. However, the financial subsidiary may not engage in any activity as a principal that is not permissible for a financial subsidiary of a national bank as a principal unless the activity is authorized by the Federal Deposit Insurance Corporation pursuant to 12 USC 1831a.

DFI-Bkg 4.05(2) (2) Prior to acquiring control of, or an interest in a financial subsidiary, a financial institution is required to receive the prior approval of the division under s. DFI-Bkg 4.04.

DFI-Bkg 4.05(3) (3) The financial institution and each insured depository institution affiliate of the financial institution must be well capitalized, after the capital deduction required under s. DFI-Bkg 4.06.

DFI-Bkg 4.05(4) (4) The financial institution must meet any requirements of 12 USC 1831w applicable to the financial institution.

DFI-Bkg 4.05(5) (5) The division may establish additional limits or requirements on financial institutions and financial subsidiaries if the division determines that the limits or requirements are necessary for the protection of depositors, members, investors or the public.

DFI-Bkg 4.05(6) (6) For any period during which a financial institution fails to meet these requirements, the division may by order limit or restrict the activities of the financial subsidiary or require the divestiture of the financial institution’s interest in the financial subsidiary.

DFI-Bkg 4.05 History History: Cr. Register, October, 2000, No. 538, eff. 11-1-00.

DFI-Bkg 4.06 DFI-Bkg 4.06 Capital deduction. The aggregate amount of the outstanding equity investment, including retained earnings, of a financial institution in all financial subsidiaries controlled by the financial institution shall be deducted from the assets and tangible equity of the financial institution as determined by the division, and the assets and liabilities of the financial subsidiaries shall not be consolidated with those of the financial institution.

DFI-Bkg 4.06 History History: Cr. Register, October, 2000, No. 538, eff. 11-1-00.

DFI-Bkg 4.07 DFI-Bkg 4.07 Disclosure. Any published financial statement of a financial institution that controls a financial subsidiary shall separately present financial information for the financial institution in the manner proved in s. DFI-Bkg 4.06.

DFI-Bkg 4.07 History History: Cr. Register, October, 2000, No. 538, eff. 11-1-00.

DFI-Bkg 4.08 DFI-Bkg 4.08 Safeguards for the financial institution. A financial institution that establishes or maintains a financial subsidiary shall do all of the following:

DFI-Bkg 4.08(1) (1) 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.

DFI-Bkg 4.08(2) (2) 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.

DFI-Bkg 4.08 History History: Cr. Register, October, 2000, No. 538, eff. 11-1-00; CR 23-039: am. Register March 2024 No. 819, eff. 4-1-24.

DFI-Bkg 4.09 DFI-Bkg 4.09 Affiliate requirements. The financial institution shall comply with the requirements of 12 USC 371c.

DFI-Bkg 4.09 History History: Cr. Register, October, 2000, No. 538, eff. 11-1-00.

DFI-Bkg 4.10 DFI-Bkg 4.10 Preservation of existing subsidiaries. Notwithstanding the provisions of this chapter, a financial institution may retain control of a subsidiary or retain an interest in a subsidiary that the financial institution lawfully controlled or acquired before November 1, 2000, and conduct through such subsidiary any activities lawfully conducted in such subsidiary as of such date. Furthermore, no provision of this chapter shall be construed as superseding the authority for financial institutions to conduct operations through subsidiaries under s. DFI-Bkg 3.04.

DFI-Bkg 4.10 History History: Cr. Register, October, 2000, No. 538, eff. 11-1-00.

DFI-Bkg 4.11 DFI-Bkg 4.11 Examination and supervision. Each financial subsidiary shall be subject to examination and supervision by the division in the same manner and to the extent as the financial institution.

DFI-Bkg 4.11 History History: Cr. Register, October, 2000, No. 538, eff. 11-1-00.

DFI-Bkg 4.12 DFI-Bkg 4.12 Report of disposition of financial subsidiary. At least 30 days prior to disposition of a financial subsidiary, the financial institution shall inform the division by letter of the terms of the transaction.

DFI-Bkg 4.12 History History: Cr. Register, October, 2000, No. 538, eff. 11-1-00.