This article has been updated to reflect recent changes to the legislation since the article was originally written.
Multiple hearings have been held for the WBA-Supported omnibus bill as it moves quickly through the Wisconsin Legislature. The bill makes several changes to statutes relating to banking practices. Although many see these changes as tweaks to the law, they will have a huge impact on Wisconsin banks in the future.
Here is a deeper dive into the omnibus bill particulars and how it will help your bank.
Banking Review Board
Summary: Combines the Banking Review Board with the Savings Institutions Review Board into a single Banking Institutions Review Board.
Detailed Explanation: The Wisconsin Department of Financial Institutions has two five-member boards which advise DFI’s division of banking. The Banking Review Board advises and reviews administrative actions on matters related to banks and banking. The Savings Institution Review Board advises and reviews administrative actions on matters related to savings banks and savings and loan associations. This provision would combine both authorities and purposes into a single review board.
Lost, Destroyed, or Stolen Cashier’s Check
Summary: Reduces the period, from 90 days to 30 days, after certain checks or issued, during which the issuing bank must pay the item after it has been claimed as lost, stolen, or destroyed.
Detailed Explanation: The Wisconsin Uniform Commercial Code Section 403.312 describes the procedure by which a financial institution may place a stop payment on a lost, destroyed, or stolen cashier’s check, teller’s check, or certified check. Under that procedure, a claim to such an item becomes enforceable, generally, on the 90th day following the date of the check. Meaning, that a financial institution must, generally, pay an item claimed as lost, destroyed, or stolen if it is presented during the 90 day period following the date of the check or risk liability for an improper stop payment. This provision reduces that period from 90 days to 30 days.
Mortgage Loan Originators
Summary: Provides temporary authority to act as a mortgage loan originator (MLO) while a license application is pending.
Detailed Explanation: This provision gives temporary authority to act as an MLO to an individual who applies to DFI for a license so long as that individual is employed by a licensed mortgage banker or mortgage broker and was a registered MLO in another state under certain conditions and time requirements. In addition, the individual must not have been previously denied a license, subject to a cease and desist by the consumer financial protection bureau, and not been convicted of a disqualifying crime. If eligible, the temporary authority beings when the individual furnishes application information to the NMLSR and ends upon the earlier of DFI granting or denying the license, withdrawal of the application for an MLO license, the application is determined to be incomplete, or the license is granted. During the temporary period, the individual is considered to be associated with the mortgage banker or mortgage broker employing them and is considered to have MLO authority subject to all applicable requirements and duties.
Possession of Property Subject to Garnishment
Summary: Grants financial institutions two business days to respond to certain legal process.
Detailed Explanation: A garnishee financial institution in possession of property subject to garnishment is liable for the surrender of that property only upon expiration of two business days to comply with or respond to the garnishee summons and complaints.
Data Processing Services Provided to Financial Institutions
Summary: A financial institution retains property rights of any data transferred to an independent data processing servicer.
Detailed Explanation: Under this provision an independent data processing servicer is an entity that provides to a financial institution electronic data processing services. It excludes the exchange of data and settlement of funds between unaffiliated financial institutions through terminals, remote service units, and customer bank communications terminals. If a financial institution transfers data to an independent data processing servicer, the financial institution retains all right, title, interest, and legal claim to the data. The transfer only permits temporary control of the data for purposes of the contracted services. This provision also places required contract disclosures upon data processing servicers.
Federal Home Loan Bank Loans
Summary: Eliminates certain limitations on loans to state banks made by a Federal Home Loan Bank.
Detailed Explanation: This provision eliminates the current 20-year term limitation and the limitation non the value of bank assets that may be pledged as collateral by a Federal Home Loan Bank.