2023 Wisconsin Statutes & Annotations › Chapter 222 - Universal banks. › 222.0405 - Investment powers.

222.0405
Investment powers.
(1)
Investment securities. Except as provided in subs. (3) to (8), a universal bank may purchase, sell, underwrite, and hold investment securities, consistent with safe and sound banking practices, up to 100 percent of the universal bank's capital. A universal bank may not invest greater than 20 percent of the universal bank's capital in the investment securities of one obligor or issuer. In this subsection, “investment securities" includes commercial paper, banker's acceptances, marketable securities in the form of bonds, notes, debentures, and similar instruments that are regarded as investment securities.
(2)
Equity securities. Except as provided in subs. (3) to (8), a universal bank may purchase, sell, underwrite, and hold equity securities, consistent with safe and sound banking practices, up to 20 percent of the universal bank's capital or, if approved by the division in writing, a greater percentage of the universal bank's capital.
(3)
Housing activities. With the prior written consent of the division, a universal bank may invest in the initial purchase and development, or the purchase or commitment to purchase after completion, of home sites and housing for sale or rental, including projects for the reconstruction, rehabilitation, or rebuilding of residential properties to meet the minimum standards of health and occupancy prescribed for a local governmental unit, the provision of accommodations for retail stores, shops, and other community services that are reasonably incident to that housing, or the stock of a corporation that owns one or more of those projects and that is wholly owned by one or more financial institutions. The total investment in any one project may not exceed 15 percent of the universal bank's capital, nor may the aggregate investment under this subsection exceed 50 percent of the universal bank's capital. A universal bank may not make an investment under this subsection unless it is in compliance with the capital requirements set by the division under s. 222.0305 (1) and with the capital maintenance requirements of its deposit insurance corporation.
(4)
Profit-participation projects. A universal bank may take equity positions in profit-participation projects, including projects funded through loans from the universal bank, in an aggregate amount not to exceed 20 percent of the universal bank's capital. The division may suspend the investment authority under this subsection. If the division suspends the investment authority under this subsection, the division may specify how outstanding investments under this subsection shall be treated by the universal bank or its subsidiary. Among the factors that the division may consider in suspending authority under this subsection are the universal bank's capital adequacy, asset quality, earnings quantity, earnings quality, adequacy of liquidity, sensitivity to market risk, and the ability of the universal bank's management. This subsection does not authorize a universal bank, directly or indirectly through a subsidiary, to engage in the business of underwriting insurance.
(5)
Debt investments. A universal bank may invest in bonds, notes, obligations, and liabilities described under s. 222.0403 (3) to (7), subject to the limitations under those subsections.
(6)
Certain liabilities. This section does not limit investment in the liabilities described in s. 222.0403 (8).
(7)
Certain investments. A universal bank may invest without limitation in any of the following:
(a)
Business development corporations. Stocks or obligations of a corporation organized for business development by this state or by the United States or by an agency of this state or the United States.
(b)
Urban renewal investment corporations. Obligations of an urban renewal investment corporation organized under the laws of this state or of the United States.
(c)
Certain bank insurance companies. An equity interest in an insurance company or an insurance holding company organized to provide insurance for universal banks and for persons affiliated with universal banks, solely to the extent that this ownership is a prerequisite to obtaining directors' and officers' insurance or blanket bond insurance for the universal bank through the company.
(d)
Certain remote service unit corporations. Shares of stock, whether purchased or otherwise acquired, in a corporation acquiring, placing, and operating remote service units under s. 214.04 (21) or 215.13 (46) or bank communications terminals under s. 221.0303 (2).
(e)
Service corporations. Equity or debt securities or instruments of a service corporation subsidiary of the universal bank.
(f)
Federal funds. Advances of federal funds.
(g)
Certain risk management financial products. With the prior written approval of the division, financial futures transactions, financial options transactions, forward commitments, or other financial products for the purpose of reducing, hedging, or otherwise managing its interest rate risk exposure.
(h)
Certain fiduciaries. A subsidiary organized to exercise corporate fiduciary powers under ch. 112.
(i)
Agricultural credit corporations. An agricultural credit corporation, except that if the universal bank owns less than 80 percent of the stock of the agricultural credit corporation, the universal bank may not invest more than 20 percent of the universal bank's capital in the agricultural credit corporation.
(j)
Deposit accounts and insured obligations. Deposit accounts or insured obligations of any financial institution, the accounts of which are insured by a deposit insurance corporation.
(k)
Certain federal obligations. Obligations of, or obligations that are fully guaranteed by, the United States and stocks or 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, or the Federal Deposit Insurance Corporation.
(L)
Other investments. Any other investment authorized by the division.
(8)
Investments in other financial institutions. In addition to the authority granted under ss. 222.0307 and 222.0409, and subject to the limitations of sub. (2), a universal bank may invest in other financial institutions.
(9)
Investments through subsidiaries. A universal bank may make investments under this section, directly or indirectly through a subsidiary, unless the division determines that an investment shall be made through a subsidiary with appropriate safeguards to limit the risk exposure of the universal bank.
History:  2003 a. 63.