AB898: Bill Text

AB898,8,22 421.301 (11) "Consumer lease" means a lease of goods which a merchant makes to a customer for a term exceeding 4 months. "Consumer lease" does not include a rental-purchase agreement under ch. 430.

AB898, s. 7 Section 7. 423.201 (2) of the statutes is renumbered 423.201 (2) (intro.) and amended to read:

AB898,9,2 423.201 (2) (intro.) "Consumer approval transaction" does not include a any of the following:

AB898,9,4 (a) A catalog sale that is not accompanied by any other solicitation or a consumer loan conducted and consummated entirely by mail.

AB898, s. 8 Section 8. 423.201 (2) (b) of the statutes is created to read:

AB898,9,6 423.201 (2) (b) A rental-purchase agreement under ch. 430.

AB898, s. 9 Section 9. Chapter 430 of the statutes is created to read:

AB898,9,8 CHAPTER 430

AB898,9,9 RENTal-purchase AGREEMENTS

AB898,9,10 Subchapter I

AB898,9,11 Short title; General provisions

AB898,9,13 430.101 Short title. Chapter 430 shall be known and may be cited as the Wisconsin Rental-Purchase Agreements Act.

AB898,9,17 430.102 Applicable law. (1) Unless superseded by ch. 430, the principles of law and equity, including the law relative to capacity to contract, principal and agent, estoppel, fraud, misrepresentation, duress, coercion, mistake, bankruptcy, or other validating or invalidating cause supplement ch. 430.

AB898,9,21 430.103 Obligation of good faith. Every agreement or duty under this chapter imposes an obligation of good faith in its performance or enforcement. In this section, "good faith" means honesty in fact in the conduct or transaction concerned and the observance of reasonable commercial standards of fair dealing.

AB898,9,22 Subchapter II

AB898,9,23 Scope and jurisdiction

AB898,9,25 430.201 Scope. (1) Inapplicability of other laws. A rental-purchase agreement under this chapter is not governed by the laws relating to a security interest, as defined in s. 401.201 (37), or a lease, as defined in s. 411.103 (1) (j), and is not governed by chs. 421 to 427 and 429.

AB898,10,3 (2) Exclusions. This chapter does not apply to any of the following:

AB898,10,5 (a) A lease or bailment of personal property that is incidental to the lease of real property.

AB898,10,6 (b) A lease of a motor vehicle, as defined in s. 218.0101 (22).

AB898,10,8 (c) A credit sale, as defined in 15 USC 1602 (g) and in any federal regulations promulgated under that section.

AB898,10,11 430.202 Territorial application. (1) For the purposes of this chapter, a rental-purchase agreement is entered into in this state if any of the following applies:

AB898,10,14 (a) A writing signed by a lessee and evidencing the obligation under the rental- purchase agreement or an offer of a lessee is received by a rental-purchase company in this state.

AB898,10,17 (b) The rental-purchase company induces a lessee who is a resident of this state to enter into the rental-purchase agreement by face-to-face solicitation or by mail or telephone solicitation directed to the particular lessee in this state.

AB898,10,21 (2) If a rental-purchase agreement is made or modified in another state with a lessee who is a resident of this state at the time that the agreement or modification is made, the following apply as though the agreement or modification occurred in this state:

AB898,10,23 (a) A rental-purchase company, or an assignee of its rights, may collect through actions or other proceedings charges only to the extent permitted under this chapter.

AB898,10,25 (b) A rental-purchase company may not enforce any right against a lessee if the enforcement of that right would violate s. 430.503.

AB898,11,4 (3) Except as provided in subs. (1) and (2), a rental-purchase agreement made or modified in another state with an individual who was not a resident of this state at the time that the agreement or modification was made, is valid and enforceable under the laws of the state applicable to the transaction.

AB898,11,9 (4) For purposes of this chapter, the residence of a lessee is the address given by the lessee as his or her residence in any writing signed by the lessee in connection with a rental-purchase agreement. The given address is presumed to be unchanged until the rental-purchase company knows or has reason to know of a new or different address.

AB898,11,10 Subchapter III

AB898,11,11 Definitions

AB898,11,12 430.301 Definitions. In this chapter:

AB898,11,13 (1) "Administrator" means the administrator of the division.

AB898,11,15 (2) "Division" means the division of banking in the department of financial institutions.

AB898,11,16 (3) "General order" means an order of the administrator of the division.

AB898,11,18 (4) "Lessee" means an individual who rents personal property under a rental-purchase agreement.

AB898,11,20 (5) "Licensee" means a rental-purchase company holding a license issued by the division under this chapter.

AB898,11,22 (6) "Rental property" means personal property rented under a rental-purchase agreement.

AB898,11,25 (7) "Rental-purchase company" means a person engaged in the business of entering into rental-purchase agreements in this state or acquiring or servicing rental-purchase agreements that are entered into in this state.

AB898,12,3 (8) "Rental-purchase agreement" means an agreement between a rental-purchase company and a lessee for the use of personal property if all of the following apply:

AB898,12,5 (a) The personal property is to be used primarily for personal, family, or household purposes.

AB898,12,7 (b) The agreement has an initial term of 4 months or less and is automatically renewable with each payment after the initial term.

AB898,12,9 (c) The agreement does not obligate or require the lessee to renew the agreement beyond the initial term.

AB898,12,11 (d) The agreement permits, but does not obligate, the lessee to acquire ownership of the personal property.

AB898,12,12 (9) "Special order" means an order of the division to or affecting a person.

AB898,12,13 Subchapter IV

AB898,12,14 Administration

AB898,12,16 430.401 License required. No person may operate as a rental-purchase company without a valid license issued by the division under this chapter.

AB898,12,21 430.402 Application for license; fees; bond. (1) Application. (a) An application for a license under this chapter shall be made to the division, in writing, in the form prescribed by the division. In addition to any other information that may be required by the division, an application for a license under this chapter shall include all of the following:

AB898,12,22 1. If the applicant is an individual, the applicant's social security number.

AB898,12,24 2. If the applicant is not an individual, the applicant's federal employer identification number.

AB898,13,2 (b) The division may not disclose any information received under par. (a) 1. or 2. to any person except as follows:

AB898,13,4 1. The division may disclose the information to the department of revenue for the sole purpose of requesting certifications under s. 73.0301.

AB898,13,7 2. The division may disclose the information to the department of workforce development in accordance with a memorandum of understanding entered into under s. 49.857.

AB898,13,10 (2) Application fees. At the time of applying to the division for a license under this chapter, the applicant shall pay any applicable fee specified by the administrator by rule.

AB898,13,13 (3) Bond. The division may require an applicant or licensee to file with the division and maintain in force a bond, in a form prescribed by and acceptable to the division, and in an amount determined by the division.

AB898,13,21 430.403 Issuance or denial of license. (1) Investigation. Upon the filing of an application under s. 430.402 (1) and the payment of any applicable fee, the division shall perform an investigation. Except as provided in sub. (3), if the division finds that the character, general fitness, and financial responsibility of the applicant; the members of the applicant, if the applicant is a partnership, limited liability company, or association; and the officers and directors of the applicant, if the applicant is a corporation warrant the belief that the business will be operated in compliance with this chapter, the division shall issue a license to the applicant.

AB898,14,2 (2) Denial; notice; hearing. Except as provided in sub. (3), the division may deny an application made under s. 430.402 (1) by providing written notice to the applicant stating the grounds for the denial. Except as provided in sub. (3), a person whose application is denied may request a hearing under s. 227.44 within 30 days after the date of denial. The division may appoint a hearing examiner under s. 227.46 to conduct the hearing.

AB898,14,4 (3) Denial; child or family support or tax delinquency. The division may not issue a license under this chapter if any of the following applies:

AB898,14,6 (a) The applicant fails to provide the information required under s. 430.402 (1) (a).

AB898,14,11 (b) The department of revenue certifies under s. 73.0301 that the applicant is liable for delinquent taxes. An applicant for whom a license is not issued under this paragraph for delinquent taxes is entitled to a notice under s. 73.0301 (2) (b) 1. b. and a hearing under s. 73.0301 (5) (a) but is not entitled to any other notice or hearing under this section.

AB898,14,21 (c) The applicant fails to comply, after appropriate notice, with a subpoena or warrant issued by the department of workforce development or a county child support agency under s. 59.53 (5) and related to paternity or child support proceedings or is delinquent in making court-ordered payments of child or family support, maintenance, birth expenses, medical expenses, or other expenses related to the support of a child or former spouse, as provided in a memorandum of understanding entered into under s. 49.857. An applicant whose application is denied under this paragraph for delinquent payments is entitled to a notice and hearing under s. 49.857, but is not entitled to any other notice or hearing under this section.

AB898,14,25 430.404 Licenses; other business. (1) Licensed locations. A license issued under this chapter shall specify the location at which the licensee is permitted to conduct business. A separate license shall be required for each place of business maintained by the licensee.

AB898,15,1 (2) Assignment. A license issued under this chapter is not assignable.

AB898,15,3 (3) Posting. A licensee shall post its license in a conspicuous place at the location specified in the license.

AB898,15,8 (4) Term of license; fee. Every license shall remain in force until suspended or revoked in accordance with this chapter or surrendered by the licensee. Every licensee shall, on or before June 1 of each year, pay to the division an annual license fee specified by the division by rule and, if required by the division, provide a rider or endorsement to increase the amount of any bond required under s. 430.402 (3).

AB898,15,13 (5) Other business prohibited. No licensee may conduct business as a rental-purchase company within any office, room, or place of business in which any other business is solicited or engaged in, unless the licensee is authorized to do so, in writing, by the division. For the purpose of this subsection, the division may not unreasonably withhold any such authorization.

AB898,15,17 430.405 Revocation, suspension, and restriction of license. (1) Discretionary suspension or revocation. The division may issue an order suspending or revoking a license issued under this chapter if the division finds that any of the following applies:

AB898,15,19 (a) The licensee has violated this chapter, any rules promulgated under this chapter, or any lawful order of the division under s. 430.408 (1).

AB898,15,22 (b) A fact or condition exists that, if it had existed at the time of the original application for the license, would have warranted the division's refusing to issue the license.

AB898,15,24 (c) The licensee has made a material misstatement in an application for a license or in any information furnished to the division.

AB898,16,2 (d) The licensee has failed to pay the annual license fee required under s. 430.404 (4) or has failed to maintain in effect any bond required under s. 430.402 (3).

AB898,16,5 (e) The licensee has failed to provide any additional information, data, or records required by the division, within the time period prescribed under s. 430.406 (2).

AB898,16,7 (f) The licensee has failed to pay any penalties due under s. 430.901 (1) or (2) within 30 days after receiving notice, by certified mail, that the penalties are due.

AB898,16,19 (2) Mandatory restriction or suspension; child or family support. The division shall restrict or suspend a license issued under this chapter if the division finds that the licensee is an individual who fails to comply, after appropriate notice, with a subpoena or warrant issued by the department of workforce development or a county child support agency under s. 59.53 (5) and related to paternity or child support proceedings or who is delinquent in making court-ordered payments of child or family support, maintenance, birth expenses, medical expenses, or other expenses related to the support of a child or former spouse, as provided in a memorandum of understanding entered into under s. 49.857. A licensee whose license is restricted or suspended under this subsection is entitled to a notice and hearing only as provided in a memorandum of understanding entered into under s. 49.857 and is not entitled to any other notice or hearing under this section.

AB898,16,25 (3) Mandatory revocation; delinquent taxes. The division shall revoke a license issued under this chapter if the department of revenue certifies under s. 73.0301 that the licensee is liable for delinquent taxes. A licensee whose license is revoked under this subsection for delinquent taxes is entitled to a notice under s. 73.0301 (2) (b) 1. b. and a hearing under s. 73.0301 (5) (a) but is not entitled to any other notice or hearing under this section.

AB898,17,7 (4) Revocation and suspension procedure. Except as provided in subs. (2) and (3), no license shall be revoked or suspended except after a hearing under this chapter. A complaint stating the grounds for suspension or revocation together with a notice of hearing shall be delivered to the licensee at least 5 days in advance of the hearing. In the event the licensee cannot be found, complaint and notice of hearing may be left at the place of business stated in the license and this shall be considered the equivalent of delivering the notice of hearing and complaint to the licensee.

AB898,17,15 430.406 Modification of license. (1) Change in place of business. No licensee may change its place of business to another location without the prior approval of the division, which approval shall not be unreasonably withheld. A licensee shall provide the division with at least 15 days' prior written notice of a proposed change under this section and shall pay any applicable fees specified by the division by rule. Upon approval by the division of the new location, the division shall issue an amended license, specifying the date on which the amended license is issued and the new location.

AB898,17,25 (2) Other changes. Except as provided in sub. (1), a licensee shall notify the division of any material change to the information provided in the licensee's original application for a license under this chapter or provided in a previous notice of change filed by the licensee with the division under this subsection. A licensee shall provide the notice required under this subsection within 10 days after the change. The licensee shall provide any additional information, data, and records about the change to the division within 20 days after the division requests the information, data, or records. The division shall determine the cost of investigating and processing the change. The licensee shall pay the division's cost within 30 days after the division demands payment.

AB898,18,4 (3) Division approval of other changes. Any change that is subject to the notice requirement under sub. (2) is subject to the approval of the division. In reviewing the change, the division shall apply the same criteria as the criteria for approval of an original license application.

AB898,18,9 430.407 Annual report; records. (1) Annual report. On or before March 31 of each year, a licensee shall file a report with the division giving such reasonable and relevant information as the division may require concerning the business and operations conducted by the licensee. The licensee shall make the report in the form prescribed by the division.

AB898,18,14 (2) Books and records. A licensee shall keep such books and records in the licensed location as, in the opinion of the division, will enable the division to enforce this chapter. Every licensee shall preserve its records of a rental-purchase agreement for at least 2 years after making any final entry with respect to the rental-purchase agreement.

AB898,18,17 430.408 Powers and duties of division; administration. (1) Orders. The division may issue any general order or special order in execution of or supplementary to this chapter but any such order may not conflict with this chapter.

AB898,19,5 (2) Investigations and examinations. For the purpose of discovering violations of this chapter, the division may investigate or examine the business of a licensee transacted under this chapter. The place of business, books of accounts, papers, records, safes, and vaults of the licensee shall be open to the division for the purpose of an investigation or examination, and the division has authority to examine under oath all persons whose testimony is required for an investigation or examination. The division shall determine the cost of an investigation or examination. The licensee shall pay the cost of an investigation or examination. The licensee shall pay the cost of any hearing held for the purpose of this subsection, including witness fees, unless the division or a court finds that the licensee has not violated this chapter. The licensee shall pay all costs owing under this subsection within 30 days after the division demands payment. The state may maintain an action for the recovery of any costs owing under this subsection.

AB898,19,9 (3) Verified complaint; mandatory investigation. If 5 or more persons file a verified complaint with the administrator alleging that a rental-purchase company has engaged in an act which is subject to action by the administrator, he or she shall immediately commence an investigation pursuant to sub. (2).

AB898,19,11 (4) Rules. The administrator may promulgate rules for the administration of this chapter.

AB898,19,14 (5) Testimonial powers and powers to secure evidence. The division has the same power to conduct hearings, take testimony, and secure evidence as is provided to the division in ss. 217.17 and 217.18.

AB898,19,18 (6) Enforcement. The division may investigate this chapter or any lawful orders issued under sub. (1) are being violated. The division may report violations of this chapter to the attorney general or the district attorney of the proper county for prosecution.

AB898,19,19 Subchapter V