DFI-SB 3.06(2)(c)(c) Accept the stock, bonds, notes, or other securities of any affiliate of the savings bank as security for a loan to any third party made or purchased by the savings bank or subsidiary; DFI-SB 3.06(2)(d)(d) Maintain a compensating balance with respect to a loan made by any third party to any affiliate of the savings bank; or DFI-SB 3.06(2)(e)(e) Enter into any guarantee arrangement or make any take-out commitment with respect to a loan made by any third party to any affiliate of the savings bank. DFI-SB 3.06(3)(3) Waiver. The restrictions in subs. (1) and (2) may be waived in supervisory cases if the division determines that the terms of the transaction in question are fair to, and in the best interests of, the savings bank or subsidiary. A “supervisory case” includes a merger instituted for compelling reasons of safety and soundness of a savings bank, and action taken pursuant to, or in order to obviate the necessity of, proceedings by the division under subch. XI of ch. 214, Stats. DFI-SB 3.06(4)(4) Restrictions. No savings bank or subsidiary may, directly or indirectly, purchase or lease from, jointly own with or sell or lease to an affiliate of the savings bank any interest in real or personal property unless the transaction is determined by a majority of the savings bank’s board of directors to be fair to, and in the best interest of, the savings bank or subsidiary. DFI-SB 3.06(5)(a)(a) Be supported by an independent appraisal not prepared by an affiliate, affiliated person, or employee of the savings bank or subsidiary; and, DFI-SB 3.06(5)(b)(b) Be approved in advance by a resolution indicating that the terms of the transactions are fair to, and in the best interests of, the savings bank or subsidiary. The resolution shall be adopted with full disclosure by at least a majority of the entire board of directors with no director having an interest in the transaction voting on the resolution of the savings bank or subsidiary or alternatively by a majority of the total votes eligible to be cast by the voting members of the savings bank at a meeting called for the purpose, with no votes cast by proxies not solicited for the purpose. In this subsection, “full disclosure” includes the affiliated person’s source of financing for the real property involved in the transaction, including whether the savings bank or any subsidiary has a deposit relationship with any financial institution or holding company affiliate thereof providing the financing. DFI-SB 3.06 NoteNote: This rule parallels 12 CFR 563.43, an OTS regulation applying to savings and loan associations. DFI-SB 3.06 HistoryHistory: Cr. Register, February, 1994, No. 458, eff. 3-1-94; am. (1) (e), Register, October, 1996, No. 490, eff. 11-1-96. DFI-SB 3.07DFI-SB 3.07 Annual reports on interests and involvements in business ventures. DFI-SB 3.07(1)(a)(a) “Business venture” means any partnership, joint venture, corporation or similar entity, but does not include any non-profit, religious, charitable or fraternal organization or a corporation in which the savings bank has been authorized to invest by the division. DFI-SB 3.07(1)(b)1.1. Employed by a savings bank and is directly involved in approving loans made by the savings bank or determining the terms or conditions under which any specific loan is made. DFI-SB 3.07(1)(b)2.2. Employed by a savings bank and is directly involved in approving transactions, or in determining the terms or conditions of transactions entered into by the savings bank. DFI-SB 3.07(1)(c)(c) “Officer” means the president, a vice president, the treasurer, the secretary and any other officer which the board designates by resolution, but does not include any assistant officer. DFI-SB 3.07(1)(d)(d) “Reportable interest” means an interest in debt or equity of a business venture other than an interest: DFI-SB 3.07(1)(d)1.1. In debt of a business venture of not more than $10,000 or 5% of the assets of the business venture, whichever is greater; or DFI-SB 3.07(2)(2) Reporting requirements. At least once each year the board of directors of each savings bank shall obtain from each of the savings bank’s officers, directors and employees, other than persons serving solely as advisory directors, a sworn statement containing the information required by sub. (3). Each officer, director, and employee, other than persons serving solely as an advisory director, shall provide such a statement and shall disclose any new reportable interest to the board within one month after its acquisition. DFI-SB 3.07(3)(3) Interest to be disclosed. The statement required by sub. (2) shall identify for each director, officer and employee and his or her spouse and persons treated as dependents under section 151 (c) of the federal internal revenue code: DFI-SB 3.07(3)(b)(b) Each position they hold as a director, officer or salaried employee of a business venture. DFI-SB 3.07(4)(4) Valuation of reportable interests. In determining whether an interest is reportable under sub. (3): DFI-SB 3.07(4)(a)(a) The value of unlisted securities traded in the over-the-counter market is the average of the bid and asked price. DFI-SB 3.07(4)(b)(b) The value of securities for which no market information is readily available is: DFI-SB 3.07(4)(b)1.1. For common stock or equivalent securities, net worth divided by the number of outstanding voting shares times the number of shares held. DFI-SB 3.07(4)(b)2.2. For preferred stock, redemption price, or par or stated value if not redeemable. DFI-SB 3.07(4)(b)4.4. For an interest in the capital of a partnership, the net worth of the partnership multiplied by the percentage of interest held. DFI-SB 3.07(5)(5) Nature of disclosure. Statements required under sub. (2) shall disclose the existence of any reportable interest, but are not required to disclose its specific value. DFI-SB 3.07 NoteNote: This section interprets or implements s. 214.345 (2), Stats. DFI-SB 3.07 NoteNote: This rule is patterned after former s. S-L 9.04, effective from 1978 to 1989.
DFI-SB 3.07 HistoryHistory: Cr. Register, February, 1994, No. 458, eff. 3-1-94. DFI-SB 3.08(1)(1) The division shall establish, by periodic written notice to all savings banks, the minimum liquidity ratio that savings banks shall maintain. The ratio shall be between 4% and 15%. At least 50% of the minimum liquid assets shall consist of primary liquid assets. The division may require a savings bank to maintain a higher ratio if the division determines that the nature of the savings bank’s operations requires a higher liquidity ratio. DFI-SB 3.08(2)(2) The liquidity ratio of a savings bank for a month shall be calculated as follows: DFI-SB 3.08(2)(a)(a) Add the savings bank’s daily net withdrawable deposit accounts and its outstanding borrowings due in one year or less for the previous month. DFI-SB 3.08(2)(b)(b) Divide the amount in par. (a) by the total number of days in the previous month. DFI-SB 3.08(2)(c)(c) Divide the savings bank’s average daily total of liquid assets for the month for which the liquidity ratio is being calculated by the amount in par. (b). DFI-SB 3.08(3)(3) A liquid asset shall be either cash or an obligation authorized for investment by a savings bank. Liquid assets do not include equity investments, loans except marketable corporate debt instruments which are rated in one of the 4 highest ratings by a nationally recognized rating service, and loan receivables. DFI-SB 3.08(4)(4) In this section,”primary liquid assets” include the following unencumbered obligations: DFI-SB 3.08(4)(b)(b) Obligations issued by this state or a political subdivision, including a school district, in this state. DFI-SB 3.08(4)(c)(c) Deposits in FDIC-insured financial institutions that equal or exceed the minimum capital requirements for savings banks. DFI-SB 3.08(4)(d)(d) Cash, cash equivalent receivables, and settlements due from the U.S. or an agency of the U.S. DFI-SB 3.08(4)(f)(f) Commercial paper of the 2 highest investment grades having a maturity of 270 days or less. DFI-SB 3.08(4)(g)(g) Bankers acceptances having a maturity of 270 days or less of federally insured U.S. banks. DFI-SB 3.08(4)(h)(h) Shares in open-end investment funds if at least 99% of the securities held by the fund would otherwise qualify as primary liquid assets under this section if held directly by the savings bank. DFI-SB 3.08(4)(i)(i) Marketable corporate debt instruments which are rated in one of the 4 highest ratings by a nationally recognized rating service. In this par., marketable corporate debt instruments shall have a remaining maturity of no more than 36 months. DFI-SB 3.08(5)(5) Other liquid assets which are not ”primary liquid assets” include the following unencumbered obligations: DFI-SB 3.08(5)(a)(a) Mortgage backed securities which are readily salable in the securities market. DFI-SB 3.08(5)(b)(b) Mortgage derivative securities with a projected maturity of less than 4 years which are readily salable in the securities market. DFI-SB 3.08(5)(c)(c) Securities issued by other states and political subdivisions in other states. DFI-SB 3.08(5)(d)(d) Other securities authorized by the division as investments and for which a secondary resale market exists, including authorized mutual fund investments. DFI-SB 3.08(6)(6) To qualify as a liquid asset, a security shall be current with respect to payment of scheduled principal or interest or both and shall be an authorized investment for a savings bank. DFI-SB 3.08(7)(a)(a) A savings bank’s designation of an investment under financial accounting standards board statement number 115 does not effect its liquid asset classification. DFI-SB 3.08(7)(b)(b) The value of an investment included in liquid assets shall be accounted for under generally accepted accounting principles and financial accounting standards board statement number 115. DFI-SB 3.08(7)(c)(c) Assets and liabilities of a wholly owned investment operating subsidiary shall be treated on a consolidated reporting basis with those of the parent savings bank. DFI-SB 3.08 NoteNote: A copy of the document captioned ”Accounting for Certain Investments in Debt and Equity Securities” (May 1993), known as ”Statement of Financial Accounting Standards No. 115” is available at the office of the division, the secretary of state and the legislative reference bureau. A copy may be obtained on request.
DFI-SB 3.08 HistoryHistory: Cr. Register, February, 1994, No. 458, eff. 3-1-94; r. and recr., Register, March, 1996, No. 483, eff. 4-1-96; am. (4) (e), Register, October, 1996, No. 490, eff. 11-1-96; am. (3), cr., (4) (i), Register, November, 1997, No. 503, eff. 12-1-97. DFI-SB 3.09DFI-SB 3.09 Duty of institution. Each savings bank shall establish appraisal policies and practices that set standards for appraisers and appraisals used by the savings bank. These standards must comply with the “Uniform Standards of Professional Appraisal Practice” or any other standards deemed appropriate by the division. DFI-SB 3.09 NoteNote: A copy of the document captioned “Uniform Standards of Professional Appraisal Practice” is available at the office of the division, the secretary of state and the legislative reference bureau. A copy may be obtained by writing The Appraisal Standards Board of the Appraisal Foundation, 1029 Vermont Ave., N.W., Suite 900, Washington, D.C. 20005. The document is also set out as Appendix I to ch. SPS 86, Wis. Adm. Code. DFI-SB 3.09 HistoryHistory: Cr. Register, February, 1994, No. 458, eff. 3-1-94.
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