222.0403 Loan powers.
(1) Permitted purposes. A universal bank may make, sell, purchase, arrange, participate in, invest in, or otherwise deal in loans or extensions of credit for any purpose.
(2) In general.
(a) Percentage limitation. Except as provided in subs. (3) to (8), the total liabilities of any person, other than a municipal corporation, to a universal bank for a loan or extension of credit may not exceed 20 percent of the universal bank's capital at any time.
(b) Partnership liabilities. In determining compliance with this section, liabilities of a partnership include the liabilities of the general partners, computed individually as to each general partner on the basis of his or her direct liability.
(3) Increased limit for certain secured liabilities. The total liabilities of any person, other than a municipal corporation, to a universal bank for a loan or extension of credit may not exceed 50 percent of the universal bank's capital at any time, if the liabilities consist entirely of any of the following types of liabilities:
(a) Warehouse receipts. A liability secured by warehouse receipts issued by warehouse keepers who are licensed and bonded in this state under ss. 99.02 and 99.03 or under the federal Bonded Warehouse Act or who are licensed under s. 126.26, if all of the following requirements are met:
1. The receipts cover readily marketable nonperishable staples.
2. The staples are insured, if it is customary to insure the staples.
3. The market value of the staples is not, at any time, less than 140 percent of the face amount of the obligation.
(b) Certain bonds or notes. A liability in the form of a note or bond that meets any of the following qualifications:
1. The note or bond is secured by not less than a like amount of bonds or notes of the United States issued since April 24, 1917, or certificates of indebtedness of the United States.
2. The note or bond is secured or covered by guarantees or by commitments or agreements to take over, or to purchase, the bonds or notes, and the guarantee, commitment, or agreement is made by a federal reserve bank, the federal small business administration, the federal department of defense, or the federal maritime commission.
3. The note or bond is secured by mortgages or trust deeds insured by the federal housing administration.
(4) Obligations of local governmental units.
(a) Definition. In this subsection, “local governmental unit" has the meaning given in s. 16.97 (7).
(b) General limitation. Except as otherwise provided in this subsection, the total liabilities of a local governmental unit to a universal bank for money borrowed may not, at any time, exceed 25 percent of the capital of the universal bank.
(c) Revenue obligations. Liabilities in the form of revenue obligations of a local governmental unit are subject to the limitations provided in par. (b). In addition, a universal bank may invest in a general obligation of that local governmental unit in an amount that will bring the combined total of the general obligations and revenue obligations of a single local governmental unit to a sum not in excess of 50 percent of the capital of the universal bank.
(d) General obligations. If the liabilities of the local governmental unit are in the form of bonds, notes, or other evidences of indebtedness that are a general obligation of a local governmental unit, the total liability of the local governmental unit may not exceed 50 percent of the capital of the universal bank.
(e) Temporary borrowings. The total amount of temporary borrowings of any local governmental unit maturing within one year after the date of issue may not exceed 60 percent of the capital of the universal bank. Temporary borrowings and longer-term general obligation borrowings of a single local governmental unit may be considered separately in determining compliance with this subsection.
(5) Obligations of certain international organizations; other foreign bonds. A universal bank may purchase bonds offered for sale by the International Bank for Reconstruction and Development and the Inter-American Development Bank or any other foreign bonds approved under rules established by the division. The aggregate investment in any of these bonds issued by a single issuer may not exceed 10 percent of the capital of the universal bank.
(6) Foreign national government bonds. A universal bank may purchase general obligation bonds issued by any foreign national government if the bonds are payable in United States funds. The aggregate investment in these foreign bonds may not exceed 3 percent of the capital of the universal bank, except that this limitation does not apply to bonds of the Canadian government and Canadian provinces that are payable in United States funds.
(7) Limits established by board.
(a) When financial statements required. A universal bank may not make or renew a loan or loans, the aggregate total of which exceeds the level established by the board of directors without being supported by a signed financial statement of the borrower, unless the loan is secured by collateral having a value in excess of the amount of the loan. A signed financial statement furnished by the borrower to a universal bank in compliance with this paragraph must be renewed annually as long as the loan or any renewal of the loan remains unpaid and is subject to this paragraph.
(b) Treatment of loans complying with limits. A loan or a renewal of a loan made by a universal bank in compliance with par. (a), without a signed financial statement, may be treated by the universal bank as entirely independent of any secured loan made to the same borrower if the loan does not exceed the applicable limitations provided in this section.
(8) Exceptions. This section does not apply to any of the following:
(a) Liabilities secured by certain short-term federal obligations. A liability that is secured by not less than a like amount of direct obligations of the United States that will mature not more than 18 months after the date on which such liabilities to the universal bank are entered into.
(b) Certain federal and state obligations or guaranteed obligations. A liability that is a direct obligation of the United States or this state, or an obligation of any governmental agency of the United States or this state, that is fully and unconditionally guaranteed by the United States or this state.
(c) Commodity Credit Corporation liabilities. A liability in the form of a note, debenture, or certificate of interest of the Commodity Credit Corporation.
(d) Discounting bills of exchange or business or commercial paper. A liability created by the discounting of bills of exchange drawn in good faith against actually existing values or the discounting of commercial or business paper actually owned by the person negotiating the same.
(e) Certain other federal or federally guaranteed obligations. Obligations of, or obligations that are fully guaranteed by, the United States and obligations of any federal reserve bank, federal home loan bank, the Student Loan Marketing Association, the Government National Mortgage Association, the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, the Export-Import Bank of Washington, or the Federal Deposit Insurance Corporation.
(9) Additional authority.
(a) In general. In addition to the authority granted under subs. (1) to (8), and except as provided in par. (b), a universal bank may lend under this subsection, through the universal bank or subsidiary of the universal bank, to all borrowers from the universal bank and all of its subsidiaries, an aggregate amount not to exceed 20 percent of the universal bank's capital. Except as provided in subs. (3) and (4), neither a universal bank nor any subsidiary of the universal bank may lend to any borrower, under this subsection or any other law or rule, an amount that would result in an aggregate amount for all loans to that borrower that exceeds 20 percent of the universal bank's capital. A universal bank or its subsidiary may take an equity position or other form of interest as security in a project funded through loans made under this paragraph. Every transaction by a universal bank or its subsidiary under this paragraph requires prior approval by the governing board of the universal bank or its subsidiary, respectively. Loans made under this paragraph are not subject to s. 221.0326 or to classification as losses, for a period of 2 years from the date of each loan except as provided in par. (b).
(b) Suspension of additional authority. The division may suspend the authority established under par. (a) and, in such case, may specify how an outstanding loan shall be treated by the universal bank or its subsidiary. Among the factors that the division may consider in suspending authority under par. (a) are the universal bank's capital adequacy, asset quality, earnings quantity, earnings quality, adequacy of liquidity, and sensitivity to market risk and the ability of the universal bank's management.
(10) Exercise of loan powers; prohibited considerations. In determining whether to make a loan or extension of credit, no universal bank may consider any health information obtained from the records of an affiliate of the universal bank that is engaged in the business of insurance, unless the person to whom the health information relates consents.
History: 2003 a. 63, 326.