6. Attorneys and certified public accountants whose provision of
debt-management services is incidental to their provision of legal or accounting
services.
The bill requires an applicant for a license to pay a license fee and do all of the
following:
1. Provide evidence that the applicant has insurance of $250,000 against risks
of dishonesty, fraud, theft, and other misconduct on the part of directors, employees,
and agents.
2. If the applicant is a nonprofit or tax-exempt entity, provide evidence of such
status.
3. If the applicant is an out-of-state corporation or limited liability company,
provide a certificate of good standing issued by the other state.
4. Provide specified business, financial, employee, and accreditation
information.
5. Provide evidence that the applicant's counselors obtain certification as
counselors within 12 months of employment.
6. Describe criminal convictions and certain governmental and other actions,
charges, suits, or claims regarding the applicant.
7. Submit the results of criminal background checks on the applicant's officers.
8. Describe the applicant's educational programs, financial analyses, and
initial budget plans for individuals whom the applicant counsels.
9. Provide copies of the agreements for providing debt-management services
that the applicant will use in this state.
10. Provide the applicant's fee schedule.
In addition, an applicant must file a surety bond for the purpose of protecting
individuals for whom the applicant agrees to provide debt-management services.
Also, if the applicant intends to maintain trust accounts for paying creditors on
behalf of individuals to whom the applicant provides debt-management services, the
applicant must submit the results of criminal background checks on all employees
and agents who will have access to the trust accounts.
The division must issue a license to an applicant, unless any of the following
apply: 1) the application is incomplete or contains erroneous information; 2) an
officer, director, or owner of the applicant has defaulted in the payment of money
collected for others or has been convicted of a crime, or suffered a civil judgment,

involving dishonesty or the violation of federal or state securities laws; or 3) the
division makes a specified finding regarding the applicant's inability to operate its
business in compliance with the bill's requirements. In addition, if the applicant is
a nonprofit or tax-exempt entity, the division must deny the application if the
applicant's board of directors is not independent of its employees and agents. The
bill includes tests for the division to determine independence. The bill also requires
the division to deny a license if the applicant is liable for delinquent taxes or is
delinquent in making court-ordered child or family support payments.
If a person is licensed under the bill, the bill imposes various requirements on
the person's provision of debt-management services, including the following: 1) the
person must act in good faith; 2) the person must maintain a toll-free customer
service communication system; and 3) before providing services to an individual, the
person must provide the individual with an itemized list of goods, services, and
charges; educate the individual about personal finance management; and prepare
a financial analysis. Additional requirements apply if the person prepares a plan for
an individual to make payments to creditors. The bill also imposes requirements on
agreements for licensed persons to provide debt-management services to
individuals, including requirements for terminating such agreements. In addition,
the bill does the following: 1) imposes trust requirements on money held by licensed
persons for payment to creditors; 2) establishes limits on the fees that licensed
persons may charge; 3) specifies records that licensed persons must maintain; and
4) prohibits licensed persons from engaging in specified conduct.
The bill creates other requirements, including the following:
1. The bill imposes deadlines on the division's consideration of an application
for a license.
2. The bill requires licensed persons to renew their licenses annually.
3. The bill allows a person licensed or registered in another state to apply for
a license in this state by submitting the other state's application and license or
registration.
4. The bill allows the division to suspend or revoke a license if a person is
insolvent, violates the bill's requirements, or is liable for delinquent taxes or is
delinquent in making court-ordered child or family support payments.
5. The bill allows the division to investigate and enforce the bill's requirements,
including by ordering persons to take corrective action or by obtaining civil
forfeitures.
6. The bill allows an individual to void a debt-management service agreement
with a licensed person who violates the bill's requirements and allows an individual
who is harmed by a licensed person's violation of the bill's requirements to bring a
civil action against the licensed person.
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:
AB218, s. 1
1Section 1. Chapter 218 (title) of the statutes is amended to read:
AB218,4,22 Chapter 218
AB218,4,33 Finance companies, auto dealers,
AB218,4,4 4adjustment companies
AB218,4,5 5debt-management service providers,
AB218,4,66 and collection agencies
AB218, s. 2 7Section 2. Subchapter II (title) of chapter 218 [precedes 218.02] of the statutes
8is repealed and recreated to read:
AB218,4,99 Chapter 218
AB218,4,1010 Subchapter II
AB218,4,1111 Uniform debt-management
AB218,4,1212 services Act
AB218, s. 3 13Section 3. 218.02 (title) of the statutes is repealed and recreated to read:
AB218,4,14 14218.02 (title) Uniform debt-management services act.
AB218, s. 4 15Section 4. 218.02 (1) to (8) of the statutes are repealed and recreated to read:
AB218,4,1716 218.02 (1) Short title. This section may be cited as the "Uniform
17Debt-Management Services Act."
AB218,4,18 18(2) Definitions. In this section:
AB218,4,1919 (a) 1. "Affiliate," with respect to an individual, means any of the following:
AB218,4,2020 a. The spouse of the individual.
AB218,4,2121 b. A sibling of the individual or the spouse of a sibling.
AB218,4,2322 c. An individual or the spouse of an individual who is a lineal ancestor or lineal
23descendant of the individual or the individual's spouse.
AB218,5,3
1d. An aunt, uncle, great aunt, great uncle, first cousin, niece, nephew,
2grandniece, or grandnephew, whether related by the whole or the half blood or
3adoption, or the spouse of any of them.
AB218,5,44 e. Any other individual occupying the residence of the individual.
AB218,5,55 2. "Affiliate," with respect to an entity, means any of the following:
AB218,5,76 a. A person that directly or indirectly controls, is controlled by, or is under
7common control with the entity.
AB218,5,98 b. An officer of, or an individual performing similar functions with respect to,
9the entity.
AB218,5,1110 c. A director of, or an individual performing similar functions with respect to,
11the entity.
AB218,5,1612 d. Subject to adjustment of the dollar amount pursuant to sub. (31) (f), a person
13that receives or received more than $25,000 from the entity in either the current year
14or the preceding year or a person that owns more than 10 percent of, or an individual
15who is employed by or is a director of, a person that receives or received more than
16$25,000 from the entity in either the current year or the preceding year.
AB218,5,1817 e. An officer or director of, or an individual performing similar functions with
18respect to, a person described in subd. 2. a.
AB218,5,2019 f. The spouse of, or an individual occupying the residence of, an individual
20described in subd. 2. a. to e.
AB218,5,2221 g. An individual who has the relationship specified in subd. 1. d. to an
22individual or the spouse of an individual described in subd. 2. a. to e.
AB218,5,2423 (b) "Agreement" means an agreement between a provider and an individual for
24the performance of debt-management services.
AB218,6,2
1(c) "Business address" means the physical location of a business, including the
2name and number of a street.
AB218,6,63 (d) "Certified counselor" means an individual certified by a training program
4or certifying organization, approved by the division, that authenticates the
5competence of individuals providing education and assistance to other individuals
6in connection with debt-management services.
AB218,6,87 (e) "Concessions" means assent to repayment of a debt on terms more favorable
8to an individual than the terms of the contract between the individual and a creditor.
AB218,6,99 (f) "Day" means calendar day.
AB218,6,1210 (g) "Debt-management services" means services as an intermediary between
11an individual and one or more creditors of the individual for the purpose of obtaining
12concessions.
AB218,6,1313 (h) "Division" means the division of banking.
AB218,6,1414 (i) "Entity" means a person other than an individual.
AB218,6,1815 (j) "Financial institution" means a financial institution, including a commercial
16bank, savings bank, savings and loan association, credit union, and trust company,
17engaged in the business of banking, chartered under federal or state law, and
18regulated by a federal or state banking regulatory authority.
AB218,6,2019 (k) "Good faith" means honesty in fact and the observance of reasonable
20standards of fair dealing.
AB218,6,2421 (L) "Person" means an individual, corporation, business trust, estate, trust,
22partnership, limited liability company, association, joint venture, or any other legal
23or commercial entity. The term does not include a public corporation, government,
24or governmental subdivision, agency, or instrumentality.
AB218,7,4
1(m) "Plan" means a program or strategy in which a provider furnishes debt
2management services to an individual and which includes a schedule of payments
3to be made by or on behalf of the individual and used to pay debts owed by the
4individual.
AB218,7,65 (n) "Principal amount of the debt" means the amount of a debt at the time of
6an agreement.
AB218,7,87 (o) "Provider" means a person that provides, offers to provide, or agrees to
8provide debt-management services directly or through others.
AB218,7,109 (p) "Record" means information that is inscribed on a tangible medium or that
10is stored in an electronic or other medium and is retrievable in perceivable form.
AB218,7,1311 (q) "Settlement fee" means a charge imposed on or paid by an individual in
12connection with a creditor's assent to accept in full satisfaction of a debt an amount
13less than the principal amount of the debt.
AB218,7,1514 (r) "Sign" means, with present intent to authenticate or adopt a record, any of
15the following:
AB218,7,1616 1. To execute or adopt a tangible symbol.
AB218,7,1817 2. To attach to or logically associate with the record an electronic sound, symbol,
18or process.
AB218,7,2119 (s) "State" means a state of the United States, the District of Columbia, Puerto
20Rico, the United States Virgin Islands, or any territory or insular possession subject
21to the jurisdiction of the United States.
AB218,7,2322 (t) "Trust account" means an account held by a provider that is all of the
23following:
AB218,7,2424 1. Established in an insured financial institution.
AB218,7,2525 2. Separate from other accounts of the provider or its designee.
AB218,8,2
13. Designated as a trust account or other account designated to indicate that
2the money in the account is not the money of the provider or its designee.
AB218,8,43 4. Used to hold money of one or more individuals for disbursement to creditors
4of the individuals.
AB218,8,7 5(3) Exempt agreements and persons. (a) This section does not apply to an
6agreement with an individual who the provider has no reason to know resides in this
7state at the time of the agreement.
AB218,8,98 (b) This section does not apply to a provider to the extent that the provider does
9any of the following:
AB218,8,1210 1. Provides or agrees to provide debt-management, educational, or counseling
11services to an individual who the provider has no reason to know resides in this state
12at the time the provider agrees to provide the services.
AB218,8,1613 2. Receives no compensation for debt-management services from or on behalf
14of the individuals to whom it provides the services or from their creditors, unless the
15services are provided free of charge with the intent of evading the provisions of this
16section.
AB218,8,1917 (c) This section does not apply to any of the following persons or their employees
18when the person or the employee is engaged in the regular course of the person's
19business or profession:
AB218,8,2120 1. A judicial officer, a person acting under an order of a court or an
21administrative agency, or an assignee for the benefit of creditors.
AB218,8,2222 2. A financial institution.
AB218,8,2423 3. An affiliate, as defined in sub. (2) (a) 2. a., of a financial institution if the
24affiliate is regulated by a federal or state banking regulatory authority.
AB218,9,3
14. A title insurer, escrow company, or other person, that provides bill-paying
2services, if the provision of debt-management services is incidental to the
3bill-paying services.
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