Wis. Admin. Code Department of Financial Institutions DFI-SB 22.10 - Activities of mutual holding companies

(1) PERMITTED ACTIVITIES. A mutual holding company may:

(a) Invest in or acquire control of a savings bank or savings and loan association or their holding companies.

(b) Acquire a mutual savings bank or mutual savings and loan association by merger with an interim or existing subsidiary savings bank of the mutual holding company from which the mutual holding company draws members under subch. IX of ch. 214, Stats.

(c) With the consent of the division and subject to conditions as the division may prescribe, upon an affirmative vote of at least two-thirds of the board of each entity, acquire control of another mutual holding company by merging with or into it or by merging it with or into a subsidiary interim holding company.

(d) Acquire control of a savings bank holding company or savings and loan association holding company in the stock form with the written approval of the division. An acquired holding company may be held as a subsidiary or merged into the mutual holding company.

(e) Invest in or acquire control of any corporation which is engaged exclusively in activities approved by the division.

(f) Invest in securities a savings bank may invest in under subch. VII of ch. 214, Stats.

(g) Engage in activities a savings bank may engage in under ch. 214, Stats.

(h) Furnish or perform management services for a subsidiary.

(i) Hold, manage or liquidate assets owned by or acquired from a subsidiary.

(j) Hold or manage property which it or a subsidiary uses.

(k) Unless limited or prohibited by the division, engage in any activity that the federal reserve board permits a bank holding company to engage in under 12 CFR 225, subpart C.

(L) Convert itself and any savings bank subsidiary into a mutual savings bank under a plan, approved by the division, that provides that the converting mutual holding company ceases to engage in activities that the converted savings bank may not engage in and that provides that stock in a subsidiary savings bank that is not held by the converting mutual holding company is redeemed.

(2) RESTRICTIONS ON PLEDGING STOCK.

(a) To collateralize an obligation of it or any of its subsidiaries or affiliates, without the prior approval of the division, a mutual holding company may pledge any stock which comprises a minority interest in any subsidiary or that it holds in:

1. A subsidiary savings bank, if the proceeds or other benefit of the obligation collateralized are received by the savings bank whose stock is pledged;

2. A subsidiary savings bank;

3. Any nondepository subsidiary.

(b) No pledge of stock that is not described in par. (a) may be made without the prior written approval of the division.

(c) Within 10 days after any pledge of stock, a mutual holding company shall:

1. Notify the division in writing regarding the terms of the transaction, including the amount of principal and interest, repayment terms, maturity date, the nature and amount of collateral, and the terms governing seizure of the collateral; and

2. If required under par. (a), include in the notice a certification that the proceeds of the loan have been transferred to the subsidiary savings bank whose stock has been pledged.

(d) Any mutual holding company that fails to make any payment on a loan secured by the pledge of stock by the date on which the payment is due shall, on the first day after the payment is due and not made, provide written notice of nonpayment to the division.

(3) RESTRICTIONS ON STOCK REPURCHASES.

(a) No subsidiary savings bank of a mutual holding company that has any stockholders other than the savings bank's mutual holding company may repurchase any share of stock within 3 years of the stock's date of issuance without the prior written approval of the division unless the repurchase:

1. Is part of a general repurchase made on a pro rata basis under an offer approved in writing by the division and made to all stockholders of the savings bank except that the savings bank's mutual holding company may be excluded from the repurchase with the division's approval;

2. Is accomplished in the open market by a stock benefit plan of the savings bank in an amount reasonable and appropriate to fund the plan.

(b) A mutual holding company may, at any time, and without prior approval of the division, acquire additional shares of the stock of a subsidiary savings bank.

(4) DISPOSITIONS. With the written approval of the division, a mutual holding company may:

(a) Directly or indirectly, transfer any interest in stock which it holds in any subsidiary savings bank.

(b) Cause or permit the transfer of all or a substantial portion of the assets or liabilities of any subsidiary savings bank.

(5) RESTRICTIONS ON WAIVER OF DIVIDENDS. Unless authorized by the division, no mutual holding company may waive its right to receive any dividend declared by a subsidiary.

(6) RESTRICTIONS ON INDEMNIFICATION. Section 214.04(15), Stats., shall apply to mutual holding companies in the same manner as if they were mutual savings banks.

(7) RESTRICTIONS ON EMPLOYMENT CONTRACTS. Chapter DFI-SB 7 shall apply to a mutual holding company in the same manner as it applies to a savings bank.

Notes

Wis. Admin. Code Department of Financial Institutions DFI-SB 22.10

CR Register, February, 1994, No. 458, eff. 3-1-94.

This section interprets or implements s. 214.095, Stats.