SB 596

This bill does all of the following:

1. Allows a financial institution that has established a payable-on-death

(P.O.D.) account and made a loan to the P.O.D. account owner to, upon the death of

the account owner, withhold distribution to the P.O.D. account beneficiary of an

amount necessary to satisfy the account owner's loan obligation to the financial

institution.

2. Increases the amount of compensation available from the Department of

Financial Institutions for losses by the state or a local government resulting from the

deposit of public moneys in a failed or failing financial institution.

3. Repeals certain DFI rules related to the placement or operation of automated

teller machines (ATMs) by financial institutions.

4. Prohibits the Department of Safety and Professional Services and local

governments from requiring a financial institution to install an access box in or on

any financial institution building.

5. Extends the maximum maturity date, from 10 to 20 years, of a promissory

note issued by a city, village, town, county, or school district.

P.O.D. accounts

Current law allows a depositor of a financial institution to establish a P.O.D.

account under which the sums on deposit at the time of the depositor's death are

transferred to a designated P.O.D. beneficiary and are not subject to distribution by

will or otherwise as part of the deceased depositor's estate.

Under this bill, if the financial institution has made a loan to the depositor and

has any lien right, right to setoff, or security interest in the P.O.D. account resulting

from the loan, then upon the depositor's death, the financial institution may retain

control of all sums on deposit in the P.O.D. account to the extent necessary to exercise

its lien right or right to setoff or to protect its security interest. The financial

institution must then pay the remaining balance of the account to the P.O.D.

beneficiary.

Public deposit losses

Under current law, the Investment Board (SWIB) and the governing bodies of

counties, municipalities, and certain other local governmental units (collectively,

public depositors) must designate one or more financial institutions in this state for

deposit of all public moneys received by the public depositor. DFI administers a

claims process that repays public depositors for losses that exceed applicable deposit

insurance resulting from a failed or failing financial institution's failure to repay the

deposit of public moneys. The maximum payment that DFI can make to a public

depositor for losses from a single financial institution is $400,000. These loss

payment provisions also apply to local government deposits in the local government

pooled-investment fund managed by SWIB.

This bill increases, from $400,000 to $1,000,000, the maximum payment that