October 8, 2021 - Introduced by Senators Marklein, Felzkowski, Feyen and Nass,
cosponsored by Representatives Katsma, Armstrong, Dallman, Dittrich,
Kurtz, Loudenbeck, Penterman, Thiesfeldt, Wichgers, Wittke, Zimmerman,
Doyle, Mursau and Knodl. Referred to Committee on Financial Institutions
and Revenue.

SB596,1,7 1An Act to amend 34.08 (2), 38.20 (2) (e), 67.12 (12) (a), 705.04 (2) (intro.), 705.04
2(2g) and 705.06 (3); and to create 66.0440, 101.02 (7m) and 705.06 (2m) of the
3statutes; relating to: P.O.D. accounts and loan obligations to financial
4institutions; payments for public deposit losses in failed financial institutions;
5automated teller machines; prohibiting requiring access boxes on buildings
6owned by financial institutions; promissory notes of certain public bodies; and
7repealing rules promulgated by the Department of Financial Institutions.

This bill does all of the following:

1. Allows a financial institution that has established a payable-on-death
(P.O.D.) account and made a loan to the P.O.D. account owner to, upon the death of
the account owner, withhold distribution to the P.O.D. account beneficiary of an
amount necessary to satisfy the account owner's loan obligation to the financial
institution.

2. Increases the amount of compensation available from the Department of
Financial Institutions for losses by the state or a local government resulting from the
deposit of public moneys in a failed or failing financial institution.

3. Repeals certain DFI rules related to the placement or operation of automated
teller machines (ATMs) by financial institutions.

4. Prohibits the Department of Safety and Professional Services and local
governments from requiring a financial institution to install an access box in or on
any financial institution building.

5. Extends the maximum maturity date, from 10 to 20 years, of a promissory
note issued by a city, village, town, county, or school district.

Current law allows a depositor of a financial institution to establish a P.O.D.
account under which the sums on deposit at the time of the depositor's death are
transferred to a designated P.O.D. beneficiary and are not subject to distribution by
will or otherwise as part of the deceased depositor's estate.

Under this bill, if the financial institution has made a loan to the depositor and
has any lien right, right to setoff, or security interest in the P.O.D. account resulting
from the loan, then upon the depositor's death, the financial institution may retain
control of all sums on deposit in the P.O.D. account to the extent necessary to exercise
its lien right or right to setoff or to protect its security interest. The financial
institution must then pay the remaining balance of the account to the P.O.D.
beneficiary.

Under current law, the Investment Board (SWIB) and the governing bodies of
counties, municipalities, and certain other local governmental units (collectively,
public depositors) must designate one or more financial institutions in this state for
deposit of all public moneys received by the public depositor. DFI administers a
claims process that repays public depositors for losses that exceed applicable deposit
insurance resulting from a failed or failing financial institution's failure to repay the
deposit of public moneys. The maximum payment that DFI can make to a public
depositor for losses from a single financial institution is $400,000. These loss
payment provisions also apply to local government deposits in the local government
pooled-investment fund managed by SWIB.

This bill increases, from $400,000 to $1,000,000, the maximum payment that
DFI can make to a public depositor for losses from a single financial institution that
exceed deposit insurance.