This bill changes the foregoing applicability requirements. Under this bill, if
the first lien requirements apply to a loan for $25,000 or less, then the WCA does not
apply to the loan. However, if the high cost requirements apply to the loan, the loan
is secured by a second or subsequent lien on residential real estate, and the loan is
for $25,000 or less, then the WCA also applies to the loan. In addition, a loan subject
to the high cost requirements is not automatically exempt from the first lien
requirements. Instead, if a loan that is subject to the high cost requirements is for
$25,000 or less, and the loan is secured by a first lien, then the first lien requirements
also apply to the loan.
Also under current law, certain variable rate loans are subject to certain
requirements, including a requirement for the lender to give the borrower notice if
a change in the interest rate occurs. The variable rate loans are defined as certain
loans secured by first liens or equivalent security interests. Current law requires

notice to be given at least 30 days before the change if an increase in periodic
payments other than the final payment is required. This bill changes the 30 days to
15 days. For all other changes, current law requires notice to be given no later than
15 days after the change. This bill changes the 15 days to 30 days. In addition, the
bill provides that variable loans that are secured by first liens, and not loans that are
secured by equivalent security interests, are subject to these notice requirements.
Whether a security interest is an equivalent security interest is determined as of the
date that the loan is made.
Finally, current law contains conflicts regarding whether a person who is not
a certified public accountant may be a shareholder of a service corporation that is
organized for carrying on the profession of certified public accounting. One statute
specifies that such a service corporation may be organized if more than 50 percent
of the shareholders are certified public accountants. Another statute generally
requires each shareholder, director, and officer of a service corporation to be licensed,
certified, or registered by a state agency in the same field of endeavor. In addition,
another statute requires a service corporation to convert to a business corporation
if all shareholders cease at any one time to be licensed, certified, or registered in the
same field of endeavor. This bill eliminates these conflicts. Under this bill, a service
corporation may be organized for carrying on the profession of certified public
accounting if more than 50 percent of the shareholders are certified public
accountants. If such a service corporation ceases to satisfy this requirement, it must
convert to a business corporation.
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:
AB1037, s. 1 1Section 1. 138.056 (4) (a) 1. of the statutes is amended to read:
AB1037,3,32 138.056 (4) (a) 1. At least 30 15 days before the change if an increase in periodic
3payments other than the final payment is required.
AB1037, s. 2 4Section 2. 138.056 (4) (a) 2. of the statutes is amended to read:
AB1037,3,55 138.056 (4) (a) 2. Not later than 15 30 days after any other change.
AB1037, s. 3 6Section 3. 138.056 (4) (c) of the statutes is created to read:
AB1037,3,87 138.056 (4) (c) This subsection does not apply to a loan secured by an equivalent
8security interest as determined as of the date that the loan is made.
AB1037, s. 4 9Section 4. 138.09 (4) (a) (intro.) of the statutes is amended to read:
AB1037,4,10
1138.09 (4) (a) (intro.) The division for the purpose of discovering violations of
2this chapter may cause an investigation to be made of the business of the licensee
3transacted under this section, and shall cause an investigation to be made of
4convictions reported to the division by any district attorney for violation by a licensee
5of this chapter. The place of business, books of account, papers, records, safes and
6vaults of said licensee shall be open to inspection and examination by the division
7for the purpose of such investigation and the division may examine under oath all
8persons whose testimony the division may require relative to said investigation. The
9division may, upon notice to the licensee and reasonable opportunity to be heard,
10suspend or revoke such license after such hearing if any of the following applies:
AB1037, s. 5 11Section 5. 138.09 (4) (a) 1. of the statutes is amended to read:
AB1037,4,1412 138.09 (4) (a) 1. The licensee has violated any provision of this chapter and if
13the division determines such violation justifies the suspension or revocation of the
14license;.
AB1037, s. 6 15Section 6. 138.09 (4) (a) 2. of the statutes is amended to read:
AB1037,4,1816 138.09 (4) (a) 2. Any fact or condition exists which, if it had existed at the time
17of the original application for such license, would have warranted the division in
18refusing to issue such license; and.
AB1037, s. 7 19Section 7. 138.09 (4) (d) of the statutes is created to read:
AB1037,4,2420 138.09 (4) (d) The cost of any investigation, examination, or hearing, including
21witness fees or any other expenses, conducted by the division under this section shall
22be paid by the licensee so examined within 30 days after demand therefor by the
23division, and the state may maintain an action for the recovery of such costs and
24expenses.
AB1037, s. 8 25Section 8. 138.12 (5m) of the statutes is created to read:
AB1037,5,1
1138.12 (5m) Disciplinary orders. (a) In this subsection:
AB1037,5,22 1. "General order" means an order of the division other than a special order.
AB1037,5,33 2. "Special order" means an order of the division to or affecting a person.
AB1037,5,64 (b) The division may issue general orders or special orders necessary to prevent
5or correct actions by an insurance premium finance company that constitute cause
6under this section for revoking, suspending, or restricting a license.
AB1037, s. 9 7Section 9. 180.1911 (1) of the statutes is amended to read:
AB1037,5,158 180.1911 (1) Except as provided in s. ss. 180.1903 (1m) and 180.1913, each
9shareholder, director and officer of a service corporation must at all times be licensed,
10certified or registered by a state agency in the same field of endeavor or be a health
11care professional. An individual who is not so licensed, certified or registered may
12not have any part in the ownership or control of the service corporation, except that
13the nonparticipant spouse of a married individual has the rights of ownership
14provided under ch. 766. A proxy to vote any shares of the service corporation may
15not be given to a person who is not so licensed, certified or registered.
AB1037, s. 10 16Section 10. 180.1919 (1) (b) of the statutes is renumbered 180.1919 (1) (b) 1.
17and amended to read:
AB1037,5,2318 180.1919 (1) (b) 1. If Except as provided in subd. 2., if all shareholders of a
19service corporation cease at any one time and for any reason to be licensed, certified
20or registered in the particular field of endeavor for which the service corporation was
21organized, the service corporation is converted into and shall operate solely as a
22business corporation under applicable provisions of this chapter, exclusive of ss.
23180.1901 to 180.1921.
AB1037, s. 11 24Section 11. 180.1919 (1) (b) 2. of the statutes is created to read:
AB1037,6,5
1180.1919 (1) (b) 2. If not more than 50 percent of the shareholders in a service
2corporation described in s. 180.1903 (1m) at any one time are not certified public
3accountants, the service corporation is converted into and shall operate solely as a
4business corporation under applicable provisions of this chapter, exclusive of ss.
5180.1901 to 180.1921.
AB1037, s. 12 6Section 12. 220.02 (2) (g) of the statutes is created to read:
AB1037,6,77 220.02 (2) (g) Insurance premium finance companies under s. 138.12.
AB1037, s. 13 8Section 13. 220.02 (2) (h) of the statutes is created to read:
AB1037,6,109 220.02 (2) (h) Mortgage bankers, loan originators, and mortgage brokers under
10subch. III of ch. 224.
AB1037, s. 14 11Section 14. 220.02 (3) of the statutes is amended to read:
AB1037,6,2112 220.02 (3) It is the intent of sub. (2) to give the division jurisdiction to enforce
13and carry out all laws relating to banks or banking in this state, including those
14relating to state banks, savings banks, savings and loan associations, and trust
15company banks, and also all laws relating to small loan companies or other loan
16companies or agencies, finance companies, insurance premium finance companies,
17motor vehicle dealers, adjustment service companies, community currency
18exchanges, mortgage bankers, loan originators, mortgage brokers, and collection
19agencies and those relating to sellers of checks under ch. 217, whether doing business
20as corporations, individuals, or otherwise, but to exclude laws relating to credit
21unions.
AB1037, s. 15 22Section 15. 220.04 (10) of the statutes is amended to read:
AB1037,7,1023 220.04 (10) If it appears to the division that a person has engaged or is about
24to engage in an act or practice constituting a violation of the laws of this state relating
25to banks and banking, including this chapter, chs. 217, 218 and 221 to 224 and s. ss.

1138.09 and 138.12, or a rule promulgated or order issued under those laws, the
2division may bring an action in the name of the state in the circuit court of the
3appropriate county to enjoin the acts or practices and to enforce compliance with the
4laws, rules or orders, or the division may refer the matter to the district attorney of
5the appropriate county or, if the alleged violation may be enforced by the attorney
6general under sub. (12) or s. 220.12, 221.1005 or 224.06 (7) or is statewide in nature,
7to the attorney general. Upon a proper showing, the court may grant a permanent
8or temporary injunction or restraining order, appoint a receiver for the defendant or
9the defendant's assets or order rescission of any acts determined to be unlawful. The
10court may not require the division to post a bond.
AB1037, s. 16 11Section 16. 220.06 (1) of the statutes is amended to read:
AB1037,7,1412 220.06 (1) In this section, "licensee" means a person licensed by the division
13under ch. 138, 217 or 218 or under s. 224.92 or registered by the division under s.
14224.72
.
AB1037, s. 17 15Section 17. 220.285 (1) of the statutes is amended to read:
AB1037,8,216 220.285 (1) Any state bank, trust company bank, licensee under ss. 138.09,
17138.12, 218.0101 to 218.0163, 218.02, 218.04 or 218.05 or ch. 217, or person
18registered under s. 224.72
may cause any or all records kept by such bank or, licensee,
19or registered person
to be recorded, copied or reproduced by any photostatic,
20photographic or miniature photographic process or by optical imaging if the process
21employed correctly, accurately and permanently copies, reproduces or forms a
22medium for copying, reproducing or recording the original record on a film or other
23durable material. A bank or, licensee , or registered person may thereafter dispose
24of the original record after first obtaining the written consent of the division. This
25section, excepting that part of it which requires written consent of the division, is

1applicable to national banking associations insofar as it does not contravene federal
2law.
AB1037, s. 18 3Section 18. 220.285 (2) of the statutes is amended to read:
AB1037,8,124 220.285 (2) Any photographic, photostatic or miniature photographic copy or
5reproduction or copy reproduced from a film record or any copy of a record generated
6from optical disk storage of a bank record or record of a licensee or registered person
7is considered to be an original record for all purposes and shall be treated as an
8original record in all courts or administrative agencies for the purpose of its
9admissibility in evidence. A facsimile, exemplification or certified copy of any such
10photographic copy or reproduction, copy reproduced from a film record or copy
11generated from optical disk storage of a record shall, for all purposes, be considered
12a facsimile, exemplification or certified copy of the original record.
AB1037, s. 19 13Section 19. 421.202 (intro.), (1), (2), (3), (4), (5), (6), (7) and (8) of the statutes
14are amended to read:
AB1037,8,16 15421.202 Exclusions. (intro.) Chapters 421 to 427 do not apply to any of the
16following
:
AB1037,8,17 17(1) Extensions of credit to organizations (s. 421.301 (28));.
AB1037,8,18 18(2) Transactions in which all parties are organizations (s. 421.301 (28));.
AB1037,8,24 19(3) Charges for delayed payment and any discount allowed for early payment
20in transactions under public utility or common carrier tariffs if a subdivision or
21agency of this state or of the United States regulates such charges or discounts, or
22if such charges or discounts are made in connection with the furnishing of electric
23service by an electric cooperative organized and operating on a nonprofit basis under
24ch. 185;.
AB1037,9,2
1(4) The ceilings on rates and charges of a licensed pawnbroker if these ceilings
2are established by statute or ordinance;.
AB1037,9,3 3(5) The sale of insurance by an insurer, except as otherwise provided in ch. 424;.
AB1037,9,6 4(6) Consumer credit transactions in which the amount financed exceeds
5$25,000, motor vehicle consumer leases in which the total lease obligation exceeds
6$25,000 or other consumer transactions in which the cash price exceeds $25,000;.
AB1037,9,8 7(7) Transactions subject to ch. 428; secured by a first lien real estate mortgage
8or equivalent security interest.
AB1037,9,10 9(8) Transactions in securities accounts or securities transactions by or with a
10broker-dealer, as defined in s. 551.02 (3), licensed under ch. 551 ; or.
AB1037, s. 20 11Section 20. 428.101 (3) of the statutes, as affected by 2003 Wisconsin Act 257,
12is amended to read:
AB1037,9,1613 428.101 (3) Loans made on or after November 1, 1981, by a creditor to a
14customer and which are secured by a first lien real estate mortgage or equivalent
15security interest if the amount financed is $25,000 or less and if the loan is not subject
16to subch. II
.
AB1037, s. 21 17Section 21. Initial applicability.
AB1037,9,1918 (1) The treatment of section 138.056 (4) (a) 1. and 2. and (c) of the statutes first
19applies to changes in interest rates that occur on the effective date of this subsection.
AB1037,9,2220 (2) The treatment of section 138.09 (4) (a) (intro.), 1., and 2. of the statutes first
21applies to notices made by the division of banking on the effective date of this
22subsection.
AB1037,9,2423 (3) The treatment of section 138.09 (4) (d) of the statutes first applies to costs
24incurred on the effective date of this subsection.
AB1037,10,2
1(4) The treatment of section 138.12 (5m) of the statutes first applies to actions
2occurring on the effective date of this subsection.
AB1037,10,43 (5) The treatment of section 220.04 (10) of the statutes first applies to acts or
4practices occurring on the effective date of this subsection.
AB1037,10,65 (6) The treatment of section 421.202 (7) of the statutes first applies to
6transactions entered into on the effective date of this subsection.
AB1037,10,87 (7) The treatment of section 428.101 (3) of the statutes first applies to
8transactions made on the effective date of this subsection.
AB1037,10,99 (End)
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