AB447: Bill Text Engrossed

AB447-engrossed,8,10 (d) Except as provided in par. (g), no payday loan provider may impose any penalty on a customer arising from the customer's prepayment of or default or late payment on a payday loan, including any payment under sub. (7) (a).

AB447-engrossed,8,13 (e) No payday loan provider may accept from a customer a check or authorization to initiate an electronic fund transfer if the amount of the check or authorization exceeds the amount specified in par. (a).

AB447-engrossed,8,14 (f) A payday loan provider may not rollover a payday loan.

AB447-engrossed,8,21 (g) A payday loan provider may present a customer's check for payment no more than once. For each customer authorization to initiate an electronic fund transfer from the customer's account, a payday loan provider may initiate an electronic fund transfer no more than once. The only charge that a payday loan provider may impose for dishonor of a customer's check or denial of the payday loan provider's instruction to execute an electronic fund transfer is a service charge that does not exceed $15.

AB447-engrossed,9,2 (4) Informational materials. (a) The division shall develop written informational materials on payday loans and the payday loan industry. These informational materials shall be designed to educate individuals regarding the operation and potential costs of payday loans and of other options for borrowing funds that may be available.

AB447-engrossed,9,6 (b) The informational materials under par. (a) shall include a clear and conspicuous notice that a payday loan is not intended to meet long-term financial needs and that a payday loan applicant should use a payday loan only to provide funds in a financial emergency.

AB447-engrossed,9,9 (c) The informational materials under par. (a) shall include all of the following information, based upon aggregated information from reports submitted under sub. (5) for the most recent reporting period:

AB447-engrossed,9,10 1. The average annual percentage rate for payday loans.

AB447-engrossed,9,12 2. The percentage of customers originating payday loans who defaulted on the loan.

AB447-engrossed,9,14 3. The percentage of customers originating payday loans whose payment method was dishonored or denied for insufficient funds.

AB447-engrossed,9,16 4. The percentage of customers originating payday loans that resulted in repayment under sub. (7) (a).

AB447-engrossed,9,20 (d) The informational materials under par. (a) shall include a summary of all actions that the payday loan provider may take against a payday loan customer if the customer defaults on the payday loan or if the customer's check or electronic fund transfer is dishonored or denied for insufficient funds.

AB447-engrossed,9,22 (e) The division shall annually update the informational materials under par. (a), based upon the division's analysis of reports received under sub. (5).

AB447-engrossed,9,25 (f) The division shall make copies of the informational materials under par. (a) available, upon request, to payday loan providers and to the public, including making these informational materials available on the Internet site of the department of financial institutions. The division may charge payday loan providers a reasonable fee for printed copies of informational materials supplied under this paragraph.

AB447-engrossed,10,16 (5) Reporting and record keeping. (a) On or before March 15 of each year, every payday loan provider shall make an annual report to the division. The report shall cover business relating to payday loans made by the payday loan provider during the preceding calendar year and shall include any relevant information required by the division. The report shall be made upon forms prescribed by the division and shall be signed and verified by the oath or affirmation of the payday loan provider if an individual, one of the partners if a partnership, a member or manager if a limited liability company, or an officer of the corporation or association if a corporation or association. A payday loan provider may include the information required to be reported under this subsection in the payday loan provider's report under s. 138.09 (3) (f), if the information required under this subsection is stated separately in the report from information relating to the payday loan provider's other business.

AB447-engrossed,10,18 (b) The division shall require that the report under par. (a) include, for the applicable reporting period, all of the following aggregated information:

AB447-engrossed,10,19 1. The number of payday loans originated by the payday loan provider.

AB447-engrossed,10,21 2. The average of the total amount of all fees and costs, in dollars, and the average loan term, for all payday loans of the payday loan provider.

AB447-engrossed,10,23 3. Based upon the information specified in subd. 2., the average annual percentage rate for all payday loans of the payday loan provider.

AB447-engrossed,10,25 4. The number of payday loans originated by the payday loan provider that resulted in repayment under sub. (7) (a).

AB447-engrossed,11,2 5. The number of payday loans originated by the payday loan provider that resulted in default on the loan by the customer.

AB447-engrossed,11,8 6. The number of payday loans originated by the payday loan provider on which the customer's payment method was dishonored or denied because the customer's check was drawn on, or the customer's authorization to initiate an electronic fund transfer was from, an account at a financial establishment containing insufficient funds when the check was presented for payment or the electronic fund transfer was initiated.

AB447-engrossed,11,14 (6) Rescission. A customer may rescind a payday loan, before the close of business on the next day of business after the loan is made, or, if the place of business where the loan is made is open 24 hours, before 5 p.m. on the next day of business after the loan is made, by returning to the payday loan provider the proceeds of the payday loan. The payday loan provider may not charge the customer any fee for rescinding the payday loan as provided in this subsection.

AB447-engrossed,11,19 (7) Repayment after term of loan. (a) Except as provided in par. (b), if a customer fails to repay a payday loan in full at the end of the loan term, the payday loan provider shall offer the customer the opportunity to repay the outstanding balance of the loan in four equal installments with due dates coinciding with the customer's pay period schedule.

AB447-engrossed,11,24 (b) If a payday loan provider offers a customer the opportunity to make repayment under par. (a), then, during the 12-month period following the offer, no payday loan provider, including the payday loan provider making the offer, is required to offer the customer another opportunity to repay a payday loan under par. (a).

AB447-engrossed,12,10 (8) Database. (a) The division shall develop and administer, or contract for the development and administration of, a database that provides payday loan providers with real-time access, through an Internet connection, to all payday loan information necessary for payday loan providers to comply with this section. The database shall assign a unique identification number for each customer that shall be used each time the customer enters into a payday loan transaction. A customer identification number may not be based on a customer's social security number. The database shall also assign a unique identifying transaction number for each payday loan transaction that is entered into the database by a payday loan provider under par. (b).

AB447-engrossed,12,14 (b) At the time a payday loan provider enters into a payday loan transaction with a customer, the payday loan provider shall submit to the database under par. (a), in the form and manner prescribed by the division, information relating to the payday loan, including all of the following:

AB447-engrossed,12,15 1. The customer's name and address.

AB447-engrossed,12,16 2. The customer's identification number that is assigned by the database.

AB447-engrossed,12,18 3. The principal amount, interest, and all other fees and charges for the payday loan.

AB447-engrossed,12,19 4. The date on which the payday loan agreement is signed.

AB447-engrossed,12,20 5. The date of maturity of the payday loan.

AB447-engrossed,12,21 6. The customer's pay period.

AB447-engrossed,12,24 7. Any other information required by the division by rule, except that the division may not require the submission of, and a payday loan provider may not submit, a customer's financial establishment account or routing numbers.

AB447-engrossed,13,3 (c) At any time a payday loan provider offers a customer the opportunity to agree to repay a payday loan under sub. (7) (a), the payday loan provider shall submit the date of the offer to the database under par. (a).

AB447-engrossed,13,7 (d) At the time the outstanding balance of a payday loan is repaid in full, the payday loan provider shall submit to the database under par. (a), in the form and manner prescribed by the division, information specifying that the payday loan has terminated, including the date and time that the payday loan terminated.

AB447-engrossed,13,10 (e) The division shall impose on a payday loan provider a fee in an amount specified by rule each time the payday loan provider submits data required under pars. (b), (c), and (d).

AB447-engrossed,13,13 (f) A payday loan provider may rely on the information contained in the database under par. (a) as accurate and is not subject to any penalty or liability due to its reliance on inaccurate information contained in the database.

AB447-engrossed,13,17 (g) Information maintained in the database under par. (a) is not subject to inspection or copying under s. 19.35 (1) and shall remain confidential except as needed by payday loan providers to satisfy the requirements of this section and by the division to enforce this section.

AB447-engrossed,13,21 (h) If the division contracts with a person for the development or administration of the database under par. (a), the division shall ensure that the contract requires the person to maintain the confidentiality of information contained in the database.

AB447-engrossed,13,24 (i) The division shall establish procedures monitoring use of the database by payday loan providers, including procedures for determining compliance with par. (b) 2.

AB447-engrossed,14,6 (9) Customer information. No payday loan provider or person with whom the division contracts for development or administration of the database under sub. (8) (a) may sell or provide to another person any information regarding a customer or a payday loan made to a customer, except that the prohibition on providing information does not apply to information that is provided to satisfy the requirements of this section or to enforce this section.

AB447-engrossed,14,13 (10) Private cause of action. If a payday loan provider makes a payday loan to a customer that violates this section, the customer may bring an action against the payday loan provider for an amount equal to twice the interest and all other fees and charges charged for the loan, or the actual damages, including any incidental and consequential damages, sustained by the customer by reason of the violation, whichever is greater, and, notwithstanding s. 814.04 (1), the costs of the action, including reasonable attorney fees.

AB447-engrossed,14,15 (11) Penalty. Whoever violates this section may be fined not less than $500 nor more than $1,000, imprisoned for not more than 6 months, or both.

AB447-engrossed,14,18 (12) Rules. The division shall promulgate rules necessary to implement, administer, and enforce this section, including prescribing the form and content of any report required under sub. (5) and the method of filing such a report.

AB447-engrossed, s. 7 Section 7. 138.15 of the statutes is created to read:

AB447-engrossed,14,20 138.15 Motor vehicle title loans. (1) Definitions. In this section:

AB447-engrossed,14,22 (a) "Borrower" means an individual who obtains or seeks to obtain a motor vehicle title loan for personal, family, or household purposes.

AB447-engrossed,14,25 (b) "Motor vehicle title loan" means a loan of $25,000 or less to a borrower that is, or is to be, secured by an interest, other than a purchase money security interest, in the borrower's motor vehicle.

AB447-engrossed,15,2 (2) Title loans prohibited. No person required to be licensed under s. 138.09 may make or offer any motor vehicle title loan.

AB447-engrossed, s. 8 Section 8 . Nonstatutory provisions.

AB447-engrossed,15,5 (1) In this Section, "division" means the division of banking in the department of financial institutions.

AB447-engrossed,15,9 (2) The division shall submit in proposed form the rules required under section 138.14 (8) (b) 7. and (e) and (12) of the statutes, as created by this act, to the legislative council staff under section 227.15 (1) of the statutes no later than the first day of the 6th month beginning after the effective date of this subsection.

AB447-engrossed,15,22 (3) Using the emergency rules procedure under section 227.24 of the statutes, the division shall promulgate the rules required under section 138.14 (8) (b) 7. and (e) and (12) of the statutes, as created by this act, for purposes of implementing this act, for the period before the effective date of the rules submitted under subsection (2). The division shall promulgate these emergency rules no later than the first day of the 6th month beginning after the effective date of this subsection. Notwithstanding section 227.24 (1) (c) and (2) of the statutes, these emergency rules may remain in effect until July 1, 2011, or the date on which permanent rules take effect, whichever is sooner. Notwithstanding section 227.24 (1) (a) and (3) of the statutes, the division is not required to provide evidence that promulgating a rule under this subsection as an emergency rule is necessary for the preservation of the public peace, health, safety, or welfare and is not required to provide a finding of emergency for a rule promulgated under this subsection.

AB447-engrossed, s. 9 Section 9. Initial applicability.

AB447-engrossed,15,25 (1) The treatment of section 138.09 (8) (g) and (h) of the statutes first applies to loans made on the effective date of this subsection.

AB447-engrossed,16,2 (2) The treatment of section 138.14 of the statutes first applies to payday loans made or offered on the effective date of this subsection.

AB447-engrossed,16,4 (3) The treatment of section 138.15 of the statutes first applies to motor vehicle title loans made or offered on the effective date of this subsection.

AB447-engrossed, s. 10 Section 10. Effective dates. This act takes effect on the first day of the 6th month beginning after publication, except as follows:

AB447-engrossed,16,7 (1) Section 8 of this act takes effect on the day after publication.

AB447-engrossed,16,8 (End)