LRB-5230/1
KSH:kmg&jlg:ijs
April 1998 Special Session
1997 - 1998 LEGISLATURE
May 12, 1998 - Introduced by Committee on Senate Organization, by request of
Governor Tommy G. Thompson. Referred to Joint committee on Finance.
SB3,1,10 1An Act to repeal 422.201 (12), 422.203 (4) (b), 422.402 (1) (c), 422.402 (1m) (c),
2422.413 (2), 422.417 (1) (e), 424.208 (1) (b), 424.301 (1) (b) 4., 425.114 and
3425.206 (1) (d); to consolidate, renumber and amend 424.208 (1) (intro.) and
4(a); to amend 421.203 (1), 421.301 (17), 422.201 (8), 422.203 (4) (a), 422.203 (4)
5(c), 422.207 (1), 422.209 (2) (b) 1., 422.209 (2) (b) 2., 422.411 (1), 422.412,
6422.413 (1), 422.417 (1) (c), 422.417 (1) (d), 422.417 (2), 422.418 (2), 422.421 (6)
7(a), 422.501 (3), 423.201, 425.103 (2) (a), 425.206 (1) (b), 425.206 (1) (c), 425.207
8(2), 425.208 (1) (intro.) and 425.208 (1) (cm); and to create 421.202 (10) and
9422.210 of the statutes; relating to: excluding agricultural transactions from
10provisions of the Wisconsin consumer act.
Analysis by the Legislative Reference Bureau
Under current law, the Wisconsin consumer act (WCA) generally applies to all
consumer transactions made in the state, unless a specific exclusion applies.
Current law contains a number of exclusions, including an exclusion for consumer
credit transactions in which the amount financed exceeds $25,000 and other
consumer transactions in which the cash price exceeds $25,000. The bill amends the

WCA to generally exclude agricultural transactions from the WCA. An agricultural
transaction is a transaction whose purpose is related to the production, harvest,
exhibition, marketing, transportation, processing or manufacture of agricultural
products by certain persons who cultivate, plant, propagate or nurture those
agricultural products. Although the bill generally excludes agricultural
transactions from the WCA, the bill does create one provision in WCA which applies
to agricultural credit transactions. This provision prohibits a creditor from charging
a finance charge or fee for an agricultural credit transaction, unless the charge or fee
is clearly disclosed in writing and agreed to by the creditor and the customer.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB3, s. 1 1Section 1. 421.202 (10) of the statutes is created to read:
SB3,2,42 421.202 (10) Transactions that are primarily for an agricultural purpose,
3except that credit transactions that are primarily for an agricultural purpose are
4subject to s. 422.210.
SB3, s. 2 5Section 2. 421.203 (1) of the statutes is amended to read:
SB3,2,106 421.203 (1) Consumer credit transactions, not governed by ch. 428, which are
7made, insured or guaranteed by the federal government or any agency thereof, or by
8any federal instrumentality chartered under the federal farm credit act of 1971 (P.L.
992-181; 85 stats. 583; 12 USC 2001 et seq.), or by the department of veteran's affairs
10shall be subject to only those provisions set forth in sub. (2).
SB3, s. 3 11Section 3. 421.301 (17) of the statutes is amended to read:
SB3,3,212 421.301 (17) "Customer" means a person other than an organization (s.
13421.301 (28)) who seeks or acquires real or personal property, services, money or
14credit for personal, family, or household or agricultural purposes. A person other
15than a customer may agree to be governed by chs. 421 to 427 with respect to all

1aspects of a transaction and in such event such person shall be deemed a customer
2for all purposes of chs. 421 to 427 with respect to such transaction.
SB3, s. 4 3Section 4. 422.201 (8) of the statutes is amended to read:
SB3,3,104 422.201 (8) That portion of the finance charge consisting of an amount equal
5to a discount of 5% or less of the stated price which is offered to induce payment in
6full within a stated period of time in connection with a sale for agricultural purposes
7or
a sale of particular goods and services for which credit is not otherwise available
8from the merchant shall not be included in the finance charge for the purpose of
9determining the maximum rate of finance charge under sub. (2) or (3) with respect
10to a customer who does not pay in full within such time.
SB3, s. 5 11Section 5. 422.201 (12) of the statutes is repealed.
SB3, s. 6 12Section 6. 422.203 (4) (a) of the statutes is amended to read:
SB3,3,2013 422.203 (4) (a) With respect to a consumer credit transaction other than one
14primarily for an agricultural purpose
, interest after the final scheduled maturity
15date may not exceed the greater of either 12% per year or the annual rate of finance
16charge assessed on that transaction if the transaction is entered into on or after April
176, 1980 and prior to November 1, 1981, and may not exceed the maximum rate
18permitted by s. 138.05 (1) (a), if the transaction is entered into prior to April 6, 1980,
19but if such interest is charged no delinquency charge may be taken on the final
20scheduled instalment.
SB3, s. 7 21Section 7. 422.203 (4) (b) of the statutes is repealed.
SB3, s. 8 22Section 8. 422.203 (4) (c) of the statutes is amended to read:
SB3,4,323 422.203 (4) (c) With respect to a consumer credit transaction other than one
24primarily for an agricultural purpose
, interest after the final scheduled maturity
25date shall not exceed the greater of either 12% per year or the annual rate of finance

1charge assessed on that transaction if the transaction is entered into on or after
2November 1, 1981, but if interest is charged no delinquency charge may be taken on
3the final scheduled instalment.
SB3, s. 9 4Section 9. 422.207 (1) of the statutes is amended to read:
SB3,4,175 422.207 (1) With respect to a consumer credit transaction the parties may, to
6the extent not prohibited by chs. 421 to 427 and 429, agree that the customer will
7perform certain duties with respect to preserving or insuring collateral or goods
8subject to a motor vehicle consumer lease, if such duties are reasonable in relation
9to the risk of loss of or damage to the collateral or goods. If the customer fails to so
10perform the creditor may, if authorized by the agreement, pay for the performance
11of such duties on behalf of the customer. The amount paid may be added to the
12unpaid balance of the customer's obligation, if, in the absence of performance, the
13merchant has made all expenditures on behalf of the customer in good faith and in
14a commercially reasonable manner and except in the case of a transaction for an
15agricultural purpose where the collateral is perishable and threatens to decline
16speedily in value,
the merchant has given the customer written notice of the
17nonperformance and reasonable opportunity after such notice to so perform.
SB3, s. 10 18Section 10. 422.209 (2) (b) 1. of the statutes is amended to read:
SB3,5,319 422.209 (2) (b) 1. The portion of the finance charge which is allocable to all
20unexpired payment periods as scheduled or deferred. A payment period is unexpired
21if prepayment is made within 15 days after the payment's due date. The unearned
22finance charge is the finance charge which, assuming all payments are made as
23scheduled or deferred, would be earned for each unexpired payment period by
24applying to unpaid balances of principal, according to the actuarial method, the
25annual percentage rate disclosed to the customer under subch. III or, in the case of

1a transaction for an agricultural purpose, the annual percentage rate based on the
2finance charge
. The creditor may decrease the annual interest rate to the next
3multiple of 0.25%.
SB3, s. 11 4Section 11. 422.209 (2) (b) 2. of the statutes is amended to read:
SB3,5,95 422.209 (2) (b) 2. The finance charge less the amount determined by applying
6the annual percentage rate disclosed to the customer under subch. III or, in the case
7of a transaction for an agricultural purpose, the annual percentage rate based on the
8finance charge
, according to the actuarial method, to the unpaid balances for the
9actual time those balances were unpaid up to the date of prepayment.
SB3, s. 12 10Section 12. 422.210 of the statutes is created to read:
SB3,5,15 11422.210 Agricultural credit transactions. (1) Permissible finance
12charges and fees.
With respect to a credit transaction that it is primarily for an
13agricultural purpose, a creditor may not charge, collect or receive any finance charge
14or fee unless the charge or fee is clearly disclosed in writing to the customer and that
15is agreed to by the creditor and the customer.
SB3,5,16 16(2) Penalty. A violation of this section is subject to s. 425.304.
SB3, s. 13 17Section 13. 422.402 (1) (c) of the statutes is repealed
SB3, s. 14 18Section 14. 422.402 (1m) (c) of the statutes is repealed.
SB3, s. 15 19Section 15. 422.411 (1) of the statutes is amended to read:
SB3,5,2420 422.411 (1) Except as provided in subs. (2) and (2m), with respect to a consumer
21credit transaction no term of a writing may provide for the payment by the customer
22of attorney fees. Notwithstanding subs. (2) and (2m), a consumer credit transaction
23may not provide for the payment by the customer of attorney fees if the transaction
24is for an agricultural purpose.
SB3, s. 16 25Section 16. 422.412 of the statutes is amended to read:
SB3,6,5
1422.412 Restriction on liability in consumer lease. In a consumer lease
2other than one for an agricultural purpose, the obligation of a customer upon
3expiration of the lease may not exceed the average payment allocable to a monthly
4period under the lease. This limitation does not apply to charges for damages to the
5leased property occasioned by other than normal use or for other default.
SB3, s. 17 6Section 17. 422.413 (1) of the statutes is amended to read:
SB3,6,117 422.413 (1) Except as provided in subs. (2) and sub. (2g), no term of a writing
8evidencing a consumer credit transaction may provide for any charges as a result of
9default by the customer other than reasonable expenses incurred in the disposition
10of collateral or goods subject to a motor vehicle consumer lease and such other
11charges as are specifically authorized by chs. 421 to 427 and 429.
SB3, s. 18 12Section 18. 422.413 (2) of the statutes is repealed.
SB3, s. 19 13Section 19. 422.417 (1) (c) of the statutes is amended to read:
SB3,6,1614 422.417 (1) (c) Real property to which the property sold is affixed, or which is
15maintained, repaired or improved as a result of the sale of the property or services,
16if the obligation secured is $1,000 or more; and
SB3, s. 20 17Section 20. 422.417 (1) (d) of the statutes is amended to read:
SB3,6,2218 422.417 (1) (d) Goods of the consumer which were the subject of a prior
19transaction with the seller which is consolidated (s. 422.206) with the consumer
20credit sale, or if the consumer credit sale is made pursuant to an open-end credit
21plan, goods previously purchased by the consumer pursuant to the plan, subject
22however to s. 422.418; and.
SB3, s. 21 23Section 21. 422.417 (1) (e) of the statutes is repealed.
SB3, s. 22 24Section 22. 422.417 (2) of the statutes is amended to read:
SB3,7,6
1422.417 (2) With respect to a consumer lease, except as otherwise provided in
2s. 429.205 with respect to a motor vehicle consumer lease, a lessor may not take a
3security interest in any property owned or leased by the customer other than the
4leased goods to secure the lessor's obligations under the lease. This subsection does
5not prohibit a security interest in a cash security deposit for a consumer lease of
6motor vehicles or agricultural equipment.
Loading...
Loading...