DFI-SB 16.03(7) (7) Investments in development companies. A savings bank is authorized to invest, in an amount not to exceed in the aggregate 5% of its capital, in shares of small business investment companies located in this state.

DFI-SB 16.03(8) (8) Stock in bank-owned banks. A savings bank may, with the prior written approval of the division, acquire and hold stock, in an aggregate amount not exceeding 10% of its capital, in one or more of the following:

DFI-SB 16.03(8)(a) (a) A bank chartered under s. 221.1202, Stats.

DFI-SB 16.03(8)(b) (b) A bank chartered under 27 USC 27(b)(1).

DFI-SB 16.03(8)(c) (c) A bank holding company wholly owning a bank under sub. (1) or (2).

DFI-SB 16.03 Note Note: This section interprets or implements s. 214.49, Stats. and parallels the long standing agency policy for savings and loan associations.

DFI-SB 16.03 History History: Cr.. Register. December, 1995, No. 480, eff. 1-1-96; correction in (6) made under s. 13.93 (2m) (b) 7., Stats; CR 01-056: cr. (7), Register August 2001 No. 548, eff. 9-1-01; CR 02-022: cr. (8), Register, June, 2002, No. 558, eff. 7-1-02; CR 23-039: am. (5) Register March 2024 No. 819, eff. 4-1-24.

DFI-SB 16.04 DFI-SB 16.04 Debt cancellation contracts and debt suspension agreements.

DFI-SB 16.04(1) (1) Definitions. In this section:

DFI-SB 16.04(1)(a) (a) “Actuarial method” means the method of allocating payments made on a debt between the amount financed and the finance charge pursuant to which a payment is applied first to the accumulated finance charge and any remainder is subtracted from, or any deficiency is added to, the unpaid balance of the amount financed.

DFI-SB 16.04(1)(b) (b) “Closed-end credit” means consumer credit other than open-end credit as defined in this section.

DFI-SB 16.04(1)(c) (c) “Contract” means a debt cancellation contract or a debt suspension agreement.

DFI-SB 16.04(1)(d) (d) “Customer” means an individual who obtains an extension of credit from a savings bank primarily for personal, family or household purposes.

DFI-SB 16.04(1)(e) (e) “Debt cancellation contract” means a loan term or contractual arrangement modifying loan terms under which a savings bank agrees to cancel all or part of a customer’s obligation to repay an extension of credit from that savings bank upon the occurrence of a specified event. The agreement may be separate from or a part of other loan documents.

DFI-SB 16.04(1)(f) (f) “Debt suspension agreement” means a loan term or contractual arrangement modifying loan terms under which a savings bank agrees to suspend all or part of a customer’s obligation to repay an extension of credit from that savings bank upon the occurrence of a specified event. The agreement may be separate from or a part of other loan documents. “Debt suspension agreement” does not include loan payment deferral arrangements in which the triggering event is the borrower’s unilateral election to defer repayment or the savings bank’s unilateral decision to allow a deferral of repayment.

DFI-SB 16.04(1)(g) (g) “Open-end credit” means consumer credit extended by a savings bank under a plan in which:

DFI-SB 16.04(1)(g)1. 1. The savings bank reasonably contemplates repeated transactions;

DFI-SB 16.04(1)(g)2. 2. The savings bank may impose a finance charge from time to time on an outstanding unpaid balance; and

DFI-SB 16.04(1)(g)3. 3. The amount of credit that may be extended to the customer during the term of the plan, up to any limit set by the savings bank, is generally made available to the extent that any outstanding balance is repaid.

DFI-SB 16.04(1)(h) (h) “Residential mortgage loan” means a loan secured by 1-4 family, residential real property.

DFI-SB 16.04(1)(i) (i) “Savings bank” has the meaning set forth in s. 214.01 (1) (t), Stats.

DFI-SB 16.04(2) (2) Prohibited practices.

DFI-SB 16.04(2)(a) (a) Anti-tying. A savings bank shall not extend credit or alter the terms or conditions of an extension of credit conditioned upon the customer entering into a debt cancellation contract or debt suspension agreement with the savings bank.

DFI-SB 16.04(2)(b) (b) Misrepresentations generally. A savings bank shall not engage in any practice or use any advertisement that is false, misleading or deceptive, or which omits to state material information, or otherwise would cause a reasonable person to reach an erroneous belief with respect to information that may be disclosed under this section.

DFI-SB 16.04(2)(c) (c) Prohibited contract terms. A savings bank shall not offer debt cancellation contracts or debt suspension agreements that contain any of the following:

DFI-SB 16.04(2)(c)1. 1. Terms giving the savings bank the right unilaterally to modify the contract unless the modification is favorable to the customer and is made without additional charge to the customer, or the customer is notified of any proposed change and is provided a reasonable opportunity to cancel the contract without penalty before the change goes into effect.

DFI-SB 16.04(2)(c)2. 2. Terms requiring a lump sum, single payment for the contract payable at the outset of the contract, where the debt subject to the contract is a residential mortgage loan.

DFI-SB 16.04(3) (3) Refunds of fees in the event of termination or prepayment of the covered loan.

DFI-SB 16.04(3)(a) (a) Refunds. If a debt cancellation contract or debt suspension agreement is terminated, including when the customer prepays the covered loan, the savings bank shall refund to the customer any unearned fees paid for the contract unless the contract provides otherwise. A savings bank may offer a customer a contract that does not provide for a refund only if the savings bank also offers that customer a bona fide option to purchase a comparable contract that provides for a refund.