AB898: Bill Text

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

AB898,19,22 Disclosure, form of writings, prohibited practices, liability waivers, and account receipts

AB898,19,25 430.501 General requirements of disclosure. (1) Form, location, size, and time of disclosure. The information that is required to be disclosed under s. 430.502 shall satisfy all of the following:

AB898,20,1 (a) The information shall be clearly and conspicuously disclosed.

AB898,20,2 (b) The information shall be disclosed in writing.

AB898,20,4 (c) The information shall be disclosed on the face of the rental-purchase agreement above the line for the lessee's signature.

AB898,20,5 (d) The information shall be disclosed in not less than 8-point standard type.

AB898,20,7 (e) The information shall be disclosed before the time that the lessee becomes legally obligated under the rental-purchase agreement.

AB898,20,10 (f) The disclosures required by s. 430.502 (2), (3), (4), and (5) shall be printed in at least 10-point boldface type, and shall be grouped together in a box, in the form and order prescribed by the division.

AB898,20,14 (2) Accuracy of disclosure. The information required under s. 430.502 must be accurate as of the time that it is disclosed to the lessee. If any information subsequently becomes inaccurate as a result of any act, occurrence, or agreement by the lessee, the resulting inaccuracy is not a violation of this chapter.

AB898,20,19 (3) Copy of rental-purchase agreement. The rental-purchase company shall provide the lessee with a copy of the completed rental-purchase agreement signed by the lessee. If more than one lessee is legally obligated under the same rental-purchase agreement, delivery of a copy of the completed rental-purchase agreement to one of the lessees shall satisfy this subsection.

AB898,20,23 (4) Single instrument. In a rental-purchase agreement, the lessee's rental payment obligations shall be evidenced by a single instrument, which shall include the signature of the rental-purchase company, the signature of the lessee, and the date on which the instrument is signed.

AB898,21,3 430.502 Required provisions of rental-purchase agreement. A rental-purchase company shall include all of the following information, to the extent applicable, in every rental-purchase agreement:

AB898,21,7 (1) Description. A brief description of the rental property, sufficient to identify the rental property to the lessee and the rental-purchase company, including any identification number, and a statement indicating whether the rental property is new or used.

AB898,21,13 (2) Cash price. The price at which the rental-purchase company would sell the rental property to the lessee if the lessee were to pay for the rental property in full on the date on which the rental-purchase agreement is executed, along with a statement that, if the lessee intends to acquire ownership of the rental property and is able to pay for the property in full or is able to obtain credit to finance the purchase, the lessee may be able to purchase similar property from a retailer at a lower cost.

AB898,21,16 (3) Rental payments to acquire ownership. The total number, total dollar amount, and timing of all rental payments necessary to acquire ownership of the rental property.

AB898,21,23 (4) Cost of rental services. The difference between the total dollar amount of payments necessary to acquire ownership of the rental property disclosed under sub. (3), and the cash price of the property disclosed under sub. (2). The rental-purchase company shall also include a statement substantially similar to the following: "The cost of rental services is the amount you will pay in addition to the cash price if you acquire ownership of the rented goods by making all payments necessary to acquire ownership."

AB898,21,24 (5) Rental payment. The rental payment for the rental property.

AB898,22,4 (6) Up-front payment. Any payment required of the lessee at the time that the agreement is executed or the rental property is delivered, including the initial rental payment, any application or processing charge, any delivery fee, and any charge for a liability damage waiver or for other optional services agreed to by the lessee.

AB898,22,10 (7) Other charges and fees to acquire ownership. The dollar amount, both itemized and in total, of all taxes, liability damage waiver fees, fees for optional services, processing fees, application fees, and delivery charges that the lessee would incur if the lessee were to rent the rental property until the lessee acquires ownership, assuming that the lessee does not add or decline the liability damage waiver or optional services after signing the rental-purchase agreement.

AB898,22,18 (8) Total payments to acquire ownership. The total of all charges to be paid by the lessee to acquire ownership of the rental property, which shall consist of the total dollar amount of all rental payments disclosed under sub. (3), and the total dollar amount of all other charges and fees disclosed under sub. (7), along with a statement that this is the amount a lessee will pay to acquire ownership of the rental property if the tax rates do not change and if the lessee does not add or decline the liability damage waiver or optional services after signing the rental-purchase agreement.

AB898,22,21 (9) Other charges. An itemized description of any other charges or fees that the rental-purchase company may charge the lessee that are not otherwise disclosed in the rental-purchase agreement.

AB898,22,24 (10) Summary of early-purchase option. A statement summarizing the terms of the lessee's options to acquire ownership of the rental property as provided in s. 430.505 (2).

AB898,23,7 (11) Responsibility for theft or damage. A statement that, unless otherwise agreed, the lessee is responsible for the fair market value of the rental property, determined according to the early-purchase option formula under sub. (10), if the rental property is stolen, damaged, or destroyed while in the possession of or subject to the control of the lessee. The statement shall indicate that the fair market value will be determined as of the date on which the rental property is stolen, damaged, or destroyed.

AB898,23,15 (12) Service and warranty. A statement that during the term of the rental- purchase agreement, the rental-purchase company is required to service the rental property and maintain it in good working condition, as long as no other person has serviced the rental property. In lieu of servicing the rental property, the rental-purchase company may, at its option, replace the rental property. The rental-purchase company's obligation to provide service is limited to defects in the property not caused by improper use or neglect by the lessee or harmful conditions outside the control of the rental-purchase company or manufacturer.

AB898,23,18 (13) Termination at option of lessee. A statement that the lessee may terminate the agreement at any time without penalty by voluntarily surrendering or returning the rental property in good repair.

AB898,23,20 (14) Right to reinstate. A brief explanation of the lessee's right to reinstate a rental-purchase agreement under s. 430.703.

AB898,24,3 (15) Rental, not purchase. A statement that the lessee will not own the rental property until the lessee has made all payments necessary to acquire ownership or has exercised the lessee's early-purchase option. The rental-purchase company shall also include a notice reading substantially as follows: "You are renting this property. You will not own the property until you make all payments necessary to acquire ownership or until you exercise your early-purchase option. If you do not make your payments as scheduled or exercise your early-purchase option, the rental-purchase company may repossess the property."

AB898,24,7 (16) Information about rental-purchase company and lessee. The names of the rental-purchase company and the lessee, the rental-purchase company's business address and telephone number, the lessee's address, and the date on which the rental-purchase agreement is executed.

AB898,24,12 (17) Optional services. Space for a specific, separately signed, affirmative written indication of the lessee's desire for any optional service for which a charge is assessed. The lessee's request must be obtained after a written disclosure of the cost of the optional service is made, and the cost and term of such service must be listed at or near the signature space.