Limit of loans and investments
Wis. Stat. § 221.0320
in effect(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.
(d) 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 in this state, the total liability of the local governmental unit may not exceed 50 percent of the capital of the bank.
(e) 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 bank. Temporary borrowings and longer-term general obligation borrowings of a single local governmental unit in this state may be considered separately in arriving at the limitations provided in this subsection.
(4) Obligations of certain international organizations; other foreign bonds. A bank may purchase bonds offered for sale by the International Bank for Reconstruction and Redevelopment and the Inter-American Development Bank or such other foreign bonds as may be approved under rules established by the division. At no time shall the aggregate investment in any of these bonds issued by a single issuer exceed 10 percent of the capital of such bank.
(5) Foreign national government bonds. A bank may invest in general obligation bonds issued by any foreign national government if the bonds are payable in American funds. The aggregate investment in these foreign bonds may not exceed 3 percent of the capital of the bank, except that this limitation does not apply to bonds of the Canadian government and Canadian provinces that are payable in American funds.
(6) Deposits. A bank may invest in time deposits and certificates of deposit of other financial institutions in an amount not to exceed the following:
(a) In each domestic insured U.S. bank, including its offshore branches, and in each domestic insured savings and loan association, savings bank or credit union, 20 percent of capital or, in domestic insured financial institutions including their offshore branches designated by the board of directors, 50 percent of capital.
(b) In each uninsured bank or foreign bank, including its domestic branches, and in any other savings and loan association, savings bank or credit union, 20 percent of capital.
(7) Limits established by board.
(a) A bank may not make or renew a loan or loans, the aggregate total of which exceeds the level established by the board of directors without being supported by a signed financial statement unless the loan is secured by collateral having a value in excess of the amount of the loan. A signed financial statement furnished by the borrower to a bank in compliance with this paragraph must be renewed annually as long as the loan or any renewal of the loan remains unpaid and is subject to this paragraph.
(b) A loan or a renewal of a loan made by a bank in compliance with par. (a), without a signed financial statement, may be treated by the bank as entirely independent of any secured loan made to the same borrower if the loan does not exceed the limitations provided in this section.
(8) Exceptions. This section does not apply to any of the following:
(a) A liability that is secured by not less than a like amount of direct obligations of the United States which will mature not more than 18 months after the date such liabilities to the bank are entered into.
(b) A liability that is a direct obligation of the United States or this state, or an obligation of any governmental agency of the United States or this state, that is fully and unconditionally guaranteed by the United States or this state.
(c) A liability in the form of a note, debenture or certificate of interest of the Commodity Credit Corporation.
(d) A liability in the form of a note or debenture issued by the Federal National Mortgage Association or the export-import bank of Washington.
(e) A liability in the form of a note, debenture or bond issued by the federal home loan bank.
(f) A liability created by the discounting of bills of exchange drawn in good faith against actually existing values or the discounting of commercial or business paper actually owned by the person negotiating the same.
Source: WI Statutes (Official Site)URL: https://docs.legis.wisconsin.gov/document/statutes/221.0320Fetched: 10/7/2026