222.0403 Loan powers.

784 words·~4 min read·/wi/chapter-222/222-0403-4

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

(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.