Chapter DFI-SL 15

Register February 2003 No. 566

Chapter DFI-SL 15

INVESTMENTS IN SUBSIDIARIES

DFI-SL 15.01   Subsidiary investments authorized.

Ch. DFI-SL 15 Note Note: Chapter S-L 15 was renumbered chapter DFI-SL 15 under s. 13.93 (2m) (b) 1., Stats., and corrections made under s. 13.93 (2m) (b) 6. and 7., Stats., Register, July, 1998, No. 511.

DFI-SL 15.01 DFI-SL 15.01 Subsidiary investments authorized.

DFI-SL 15.01(1) (1) “Investment in subsidiaries” defined. An association’s investment in subsidiaries includes:

DFI-SL 15.01(1)(a) (a) Capital stock and paid in surplus.

DFI-SL 15.01(1)(b) (b) Partnership, joint venture or LLC capital contributions.

DFI-SL 15.01(1)(c) (c) Mortgage loans, commercial loans, loan guarantees and letters of credit related to a subsidiary in which an association has invested.

DFI-SL 15.01(1)(d) (d) Liability for the debt of a partnership, joint venture or LLC.

DFI-SL 15.01(1)(e) (e) Any other obligation for direct or contingent payment of a subsidiary’s debt.

DFI-SL 15.01(2) (2) Conditions of investment. An association may make an investment in subsidiaries under s. 215.13 (26) (f), Stats., if:

DFI-SL 15.01(2)(a) (a) The division gives prior written approval of the investment; and

DFI-SL 15.01(2)(b) (b) The subsidiary agrees:

DFI-SL 15.01(2)(b)1. 1. To restrict its activities to those authorized in writing by the division;

DFI-SL 15.01(2)(b)2. 2. To be audited by a certified public accountant at least once each fiscal year and deliver a copy of the certified public accountant’s certified report to the division simultaneously with the delivery of the report to it;

DFI-SL 15.01(2)(b)3. 3. To file any report requested by the division, submit to periodic examination by the division and pay the expense of the examinations and audits;

DFI-SL 15.01(2)(b)4. 4. Not to directly or indirectly enter into a business venture with an officer, director or employee of a the association or of a subsidiary unless the division gives prior written approval.

DFI-SL 15.01(2)(b)5. 5. To maintain books in accordance with generally accepted accounting principles.

DFI-SL 15.01(2)(b)6. 6. To make all books and records available for examination by the division on a timely basis.

DFI-SL 15.01(3) (3) Application contents.

DFI-SL 15.01(3)(a) (a) Corporations. An application for approval of investment in a corporation under this section shall contain:

DFI-SL 15.01(3)(a)1. 1. A copy of the corporation’s articles of incorporation certified by an officer of the corporation;

DFI-SL 15.01(3)(a)2. 2. A copy of the corporation’s bylaws;

DFI-SL 15.01(3)(a)3. 3. A copy of the certificate of newly-elected officers;

DFI-SL 15.01(3)(a)4. 4. An agreement by the corporation and each of its subsidiaries to comply with sub. (2) (b); and

DFI-SL 15.01(3)(a)5. 5. Other information which the division may require.

DFI-SL 15.01(3)(b) (b) Partnerships and joint ventures. An application for approval of an investment in a partnership or joint venture under this section shall contain the partnership or joint venture agreement and other information which the division may require.

DFI-SL 15.01(3)(c) (c) LLC. An application for approval of an investment in an LLC shall contain:

DFI-SL 15.01(3)(c)1. 1. A copy of the LLC’s articles of organization and any amendments.

DFI-SL 15.01(3)(c)2. 2. A copy of the LLC’s operating agreement and any amendments.

DFI-SL 15.01(3)(c)3. 3. A list of members of the LLC.

DFI-SL 15.01(3)(c)4. 4. A list of officers, directors or other persons with managerial authority of the LLC.

DFI-SL 15.01(4) (4) Special approval. An association may make an investment in a subsidiary in which it has less than a majority and controlling interest only if the division gives prior written approval.

DFI-SL 15.01(5) (5) Approval considerations. In acting under this section, factors which the division shall consider include:

DFI-SL 15.01(5)(a) (a) The effect on the safety and solvency of the association.

DFI-SL 15.01(5)(b) (b) Compliance by the association with ch. 215, Stats. and all chapters beginning with DFI-SL.

DFI-SL 15.01(5)(c) (c) The anticipated benefit to the association and its depositors and other customers.

DFI-SL 15.01(5)(d) (d) The managerial capabilities and expertise of the personnel of the association and its subsidiaries.

DFI-SL 15.01 Note Note: This section interprets or implements s. 215.13 (26) (f), Stats.

DFI-SL 15.01 History History: Cr. Register, June, 1989, No. 402, eff. 7-1-89; CR 98-137: am. (1) (b) and (d), cr. (3) (c) Register February 2003 No. 566, eff. 3-1-03; CR 23-039: am. (5) (a) to (c) Register March 2024 No. 819, eff. 4-1-24.