221.0320 Limit of loans and investments.

476 words·~2 min read·/wi/chapter-221/221-0320-7

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

(1)In general. Except as provided in subs.

(2)to

(8)and s. 221.0319

(3), the total liabilities of any person, other than a municipal corporation, to a bank for money borrowed may not, at any time, exceed 20 percent of the capital of the bank. In determining compliance with this section, the total liabilities of a partnership includes the liabilities of the general partners of the partnership, computed individually as to each general partner on the basis of his or her direct liability.

(2)Warehouse receipts and certain bonds and notes. The percentage limitation under sub.

(1)is 50 percent of the bank’s capital, if the liabilities under sub.

(1)are limited to the following types of liabilities:

(a)A liability secured by warehouse receipts issued by warehouse keepers licensed and bonded in this state under ss. 99.02 and 99.03 or under the federal bonded warehouse act or holding a license 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)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 mortgage or trust deeds insured by the federal housing administrator.

(3)Obligations of certain local governmental units.

(a)In this subsection, “local governmental unit” has the meaning given in s. 16.97

(7).

(b)Except as otherwise provided in this subsection, the total liabilities of a local governmental unit to a bank for money borrowed may not, at any time, exceed 25 percent of the capital of the bank.

(c)Liabilities in the form of revenue obligations of a local governmental unit are subject to the limitations provided in par.

(b). In addition, a bank is permitted to 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 bank.