Agency Primer: Department of Financial Institutions

Agency Primer by IRG:

Wisconsin’s Department of Financial Institutions

The Department of Financial Institutions (DFI) was created by 1995 Wisconsin Act 27. Prior to this, all of the functions of DFI were spread across multiple commissions, offices, and divisions around state government. Act 27 organized these separate agencies into divisions within the Department. The Department is headed by a Secretary appointed by the Governor with the advice and consent of the Senate. Funding for DFI comes from fees collected from financial institutions, securities regulation, and services described below. As a result, the agency collects more funding than what is needed to operate and sends a large portion of what it collects into the state general fund.

Prior to a 1902 constitutional amendment, any and all changes to banking regulation in Wisconsin required a popular referendum. The amendment in 1902 gave authority to the legislature to change banking regulation. The Office of the Commissioner of Banking was created in 1967 after several iterations. Act 27 created the Division of Banking under DFI. Today the division generally oversees the regulation of state-chartered banks and the consumer financial services industry. The Office of the Commissioner of Credit Unions was split off from the Banking Commission in 1972 and remains independent today. Now named the Office of Credit Unions, the office is housed within DFI, but only for administrative support and functions.

Similar to banking regulation in Wisconsin, securities regulation has seen many changes in the past century. After being absorbed by the Railroad Commission in 1913, the Department of Securities was created in 1939 before being renamed the Office of the Commissioner of Securities in 1967. Act 27 created the Division of Securities. Today the Division regulates investment securities and franchises.

The Division of Corporate and Consumer Services is the filing office for businesses, corporations, and other organizations. The Division also has oversight over the Uniform Commercial Code. Act 27 removed these duties from the Secretary of State and organized them under DFI.

The Department of Financial Institutions is located in the Hill Farms Office Building in Madison, while many of the bank and credit union examiners spend a lot of time on the road conducting examinations.

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