Wisconsin Statutes & Annotations
Chapter 221 - State banks.
221.0321 - Other loans and investments.

221.0321 Other loans and investments.
(1) Permitted lending. Except as provided in sub. (3), a bank may lend under this subsection, through the bank or a subsidiary of the bank, to all borrowers from the bank and all of its subsidiaries, an aggregate amount not to exceed the percentage of its capital established by the division under sub. (3). Neither a bank nor any subsidiary of the bank may lend to any borrower, under this subsection and any other law or rule, an amount that would result in an aggregate amount for all loans to that borrower that exceeds the percentage of the bank's capital established under sub. (3). A bank or its subsidiary may take an equity position or other form of interest as security in a project funded through these loans. A transaction by a bank or its subsidiary under this subsection requires prior approval by the board of directors of the bank or its subsidiary, respectively. Except as provided in sub. (3), these loans are not subject to s. 221.0326 or to classification as losses, for a period of 2 years from the date of each loan.
(2) Permitted investments. Except as provided in sub. (3), a bank may invest under this subsection, through the bank or subsidiary of the bank, amounts not to exceed, in the aggregate, that percentage of its capital established by the division under sub. (3) in equity positions, such as profit-participation projects. A bank may take an investment position in a project with respect to which it is also a lender. The bank shall limit its liability as an investor in a specific project under this subsection to an amount not exceeding the amount of its investment in that project. For purposes of calculating the bank's aggregate investment under this subsection, the amount of each investment shall be established as of the date that the investment is made. A transaction by a bank under this subsection requires prior approval by the board of directors of the bank and shall be disclosed to the shareholders of the bank prior to each annual meeting of the shareholders.
(3) Limits established by the division. The division shall establish for each bank the applicable percentage, not to exceed 20 percent, under sub. (1) and the applicable percentage, not to exceed 20 percent, under sub. (2). The division may withdraw or suspend a percentage established under this subsection and, in such case, may specify how outstanding loans or investments shall be treated by the bank or its subsidiary. Among the factors that the division may consider in establishing, withdrawing or suspending a percentage under this subsection are the bank's capital, assets, management and liquidity ratio, and capital ratio.
(4) Record-keeping requirements. At the time of making a loan or investment, the bank or its subsidiary shall note in its records whether it is made under sub. (1) or (2). The forms of security for loans under sub. (1) and the forms of investment under sub. (2) shall be as approved by the division by rule.
(5) Certain secured loans. A bank may make loans secured by assignment or transfer of stock certificates or other evidence of the borrower's ownership interest in a corporation formed for the cooperative ownership of real estate. Sections 846.10 and 846.101, as they apply to a foreclosure of a mortgage involving a one-family residence, apply to a proceeding to enforce the lender's rights in security given for a loan under this subsection. The division shall promulgate joint rules with the office of credit unions that establish procedures for enforcing a lender's rights in security given for a loan under this subsection.
(6) Investments in other financial institutions. In addition to the authority granted under s. 221.1201 and subject to the limitations of sub. (3), a bank may invest in other financial institutions.
History: 1995 a. 336; 1997 a. 35; 1999 a. 9; 2003 a. 33.

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