Wisconsin Enacts Provisions Regarding Financial Institutions
The state of Wisconsin has recently enacted provisions regarding financial institutions, which include temporary authority to act as a mortgage loan originator while a license application is pending. Provisions in this bill range from effective immediately to effective on May 2, 2021.
Wisconsin Senate Bill 457 makes several changes to current statutes regarding financial institutions and their regulation. Most notably, the bill:
Permits an applicant for a mortgage loan originator license who meets certain specified requirements to temporarily act as a mortgage loan originator while the application is pending;
Permits a financial institution to exercise its internal loan security interests on payable-on-death (POD) accounts prior to paying the POD beneficiary;
Reduces the period for the payment procedure for lost, destroyed, or stolen checks from 90 days to 14 days;
Specifies that a financial institution is liable for the surrender of garnishment or tax levy property only after the expiration of a reasonable time to comply with the order;
Provides that a financial institution that transfers data to an independent data processing servicer retains the legal rights to the data transferred and requires an independent data processor to disclose all fees and charges and grounds for termination in separate contract provisions with a financial institution;
Eliminates the 20-year term and asset limitation requirements for state banks who borrow from a federal home loan bank; and
Consolidates the current Banking Review Board and Savings Institutions Review Board and renames the combined board the Banking Institutions Review Board.
The full text is available at: https://docs.legis.wisconsin.gov/2019/related/proposals/sb457
Zachary Pearlstein, JD, is a Regulatory Compliance Director with CLA's Mortgage Advisory Division. He joined CLA on January 1, 2014, as part of its acquisition of Bankers Advisory, Inc. Zachary oversees Mortgage Advisory's regulatory compliance team, which focuses on federal and state compliance, fair lending, and the Home Mortgage Disclosure Act (HMDA). He is a graduate of Brandeis University and earned his juris doctor at Suffolk University Law School. He is admitted to the Massachusetts Bar.
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