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Can you summarize WIAC DFI-Bkg Chapter 18?
Department of Financial Institutions-Banking > Loans And Investments
Short Summary
This legal document, part of the Wisconsin Administrative Code, falls under the jurisdiction of the Department of Financial Institutions-Banking. It governs the loans and investments made by banks and their subsidiaries. The document defines key terms such as ‘investment’ and ‘security’, specifying the permissible forms of investments and securities. It also clarifies that loans under s. 221.0321 (1), Stats., do not need to be secured. Additionally, the document provides a definition for ‘subsidiary’ as any business in which a parent bank owns at least 80% of the voting stock. The document establishes that a bank or its subsidiary is limited for its aggregate loan or investment portfolio to the respective percentage established by the administrator of the division of banking pursuant to s. 221.0321 (3), Stats. The statutory limitations with respect to officers’, directors’ and employees’ of a bank, as set forth at s. 221.0625, Stats., are applicable to and included in calculating the appropriate amounts of such officers’, directors’ or employees’ involvement, relationship, ownership or other participation through a subsidiary. Prior to lending or investing by a bank or its subsidiary pursuant to s. 221.0321, Stats., the bank or subsidiary shall request the administrator of the division of banking to make a determination establishing applicable percentage limitations. The administrator’s determination may include consideration of the bank’s assets, management and liquidity ratio and its capital ratio. The administrator of the division of banking shall report the determination to the requestor within 60 days from the date of the receipt of the request. The administrator of the division of banking may review the determination made and establish, withdraw or suspend the percentage in effect after consideration of factors such as the bank’s capital, capital ratio, asset quality, management, earnings, liquidity ratio, contingent liabilities and off balance sheet risk. After any loss is reported the administrator of the division of banking shall have 60 days to review and establish, withdraw or suspend a percentage pursuant to s. 221.0321, Stats. The document emphasizes that the bank or its subsidiary cannot enter into such transactions without compliance with Wisconsin Statutes and other applicable laws or administrative rules. The bank or its subsidiary is required to inform the administrator of the division of banking by letter of the terms of the transaction prior to disposition of, or withdrawal from, the loan or investment. The bank or its operating subsidiary is also required to provide a financial statement to the administrator of the division of banking within 90 days after the close of its fiscal year. Additionally, the bank or its subsidiary shall provide the administrator of the division of banking a copy of the board of directors resolution or resolutions approving any investments or loans or taking any action with regard thereto pursuant to s. 221.0321, Stats. The bank or its subsidiary shall follow the instructions approved for use by the office of administrator of the division of banking for the preparation of reports in the reports of condition and income to account for investments made pursuant to s. 221.0321, Stats. The bank or its subsidiary shall report any losses incurred on loans or investments made pursuant to s. 221.0321, Stats. within 30 days.
Whom does it apply to?
Banks and their subsidiaries
What does it govern?
Loans and investments made by banks and their subsidiaries
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
No penalties are mentioned in this document.
Jurisdiction
Wisconsin