Proposed change: Create a rule that applies to lenders who hold both a loan company and payday lender license, establishing a 24-hour wait period around the pay off of a payday loan.
H.) Current policy: Prior to making a payday loan, a licensee must obtain certain items from the customer to verify the customer's gross monthly income.
Proposed change: The passage of
2011 WI Act 32 indicates a licensee may rely on a consumer report to verify a customer's gross monthly income. As a consumer report may not include the customer's gross monthly income, a rule indicating a licensee using consumer reports must collect the gross monthly income figure from the customer is necessary to comply with the statutory requirement that a loan may not exceed 35% of a customer's gross monthly income.
I.) Current policy: Each loan agreement must include language that informs the borrower of the lender's obligation to offer the borrower an opportunity to repay, in 4 equal installments, the outstanding balance of a loan that the borrower fails to repay in full upon maturity.
Proposed change: As a result of the passage of
2011 WI Act 32, a payday lender is only required to offer the repayment plan if the borrower has not been offered a repayment plan within the 12 month period prior to the maturity date of the loan. A change to the existing rule is needed to indicate the repayment plan will only be offered once in a 12 month period.
J.) Current policy: The repayment plan offer must be delivered to the customer when the lender receives notice of insufficient funds in the customer's account or within 10 days after the maturity date of the loan. Industry has questioned if the repayment plan offer must be issued on the 10th day if the lender presented the check or initiated the electronic fund transfer but does not know by the 10th day if it has cleared.
Proposed change: Change the existing rule to clarify that the repayment plan offer must be issued on or before the 10th day after the maturity date unless the lender is still waiting for notification from the bank as to whether a deposited check has cleared.
K.) Current policy: If a customer fails to repay a payday loan in full at the end of the loan term, the licensee shall offer the customer the opportunity to repay the outstanding balance in 4 equal installments. The current rule describes specifically how the offer of the repayment plan must be given if the customer fails to repay the subsequent loan, but does not describe how the offer must be given if the customer fails to repay the initial loan.
Proposed change: With the passage of
2011 WI Act 32, instead of having to offer a repayment plan after every unpaid loan, the lender is only required to offer a repayment plan if the borrower has not been offered a repayment plan within a 12 month period prior to the maturity of the loan. Because the new statute only requires a repayment plan be offered once within a 12 month period, the rule should be changed to describe how the offer must be made each time it must (by statute) be offered.
L.) Current policy: The due dates of the 4 equal installments on a repayment plan must coincide with the customer's pay period schedule, as verified by items that would have been used to verify income (i.e. - paycheck stub).
Proposed change: With the passage of
2011 WI Act 32, a lender may use a customer's consumer report to verify income. In order to accommodate lenders who use consumer reports, “other documentation" needs to be added to the list of acceptable verification for a customer's pay period schedule. If no documentation regarding the pay period schedule is available, the lender must base the repayment plan installments on a monthly pay schedule.
M.) Current policy: The existing rule indicates the division shall, by December 1st of each year, determine and post the database transaction fee for the following calendar year.
Proposed change: With the passage of
2011 WI Act 32, the division is required to specify, by order or rule, a database transaction fee of no more than $1. The fee has been specified by order, eliminating the need for reference in the rule.
Statutory Authority for the Rule (Including the Statutory Citation and Language)
The statutory authorities for the rule are the following:
Section
138.14 (8) (b), Stats., which states that “[t]he division may promulgate such rules as it considers necessary for the administration of this section, including rules establishing database transaction fees under sub. (14) (h) and other fees considered reasonable and necessary by the division," and
Section
138.14 (14) (h), Stats., which states that “[t]he division shall, by order or rule, specify a database transaction fee of no more than $1 that the database provider shall charge to licensees to cover the costs of developing and implementing the database, and accessing the database to verify that a customer does not have any payday loans with the licensee or others that in combination with a new transaction will create a violation of this section."
Estimate of the Amount of Time that State Employees will Spend to Develop the Rule and of Other Resources Necessary to Develop the Rule
Approximately 120 hours.
Description of all Entities that may be Impacted by the Rule
The proposed rule change would impact lenders licensed s.
138.09, lenders licensed under s.
138.14 lenders, and consumers obtaining loans from such licensees. No impact is expected for business associations, public utility rate payers, or local government units.
Summary and Preliminary Comparison of any Existing or Proposed Federal Regulation that is Intended to Address the Activities to be Regulated by the Rule
DFI is aware that the Consumer Financial Protection Bureau intends to focus some of its resources on payday lending, but is unaware of any currently proposed regulation or rule.
Anticipated Economic Impact of Implementing the Rule
The division anticipates that any economic impact of implementing the rule would be minimal.
Contact Person
Eric Knight
Executive Assistant
Department of Financial Institutions
345 W. Washington Avenue, 5th Floor
P.O. Box 8861
Madison, WI 53708-8861
Tel. 608-267-1718
Natural Resources
Fish, Game, etc., Chs.
NR 1—
This statement of scope was approved by the governor on May 2, 2012.
Rule No.
FH-10-12
Relating to
Chapter
NR 25 Great Lakes commercial fishing harvest limits.
Rule Type
Permanent.
Finding/nature of Emergency (Emergency Rule only)
Not applicable.
Detailed Description of the Objective of the Proposed Rule
This rule would revise the total allowable annual commercial harvests for bloater chubs from Lake Michigan (s.
NR 25.06 (2) (a), Wis. Adm. Code). The current harvest limit of 3.6 million pounds was established by the department in 1991. Since then the bloater chub population in Lake Michigan has declined steadily and the reported total annual harvest now falls below 50,000 pounds. The proposed rule may use objective criteria by which harvest limits would be adjusted as fish abundance changes.
We will also consider establishing criteria for automatic adjustment of harvest limits of other Lake Michigan commercial species, possibly including yellow perch, lake whitefish, round whitefish, and rainbow smelt (s.
NR 25.06 (2) (b-e), Wis. Adm. Code). Those harvest limits have been adjusted many times over the past 30 years as populations have fluctuated.
Finally, we will seek advice from the Lake Michigan Commercial Fishing Board (LMCFB) regarding the allocation of a reduced bloater chub harvest limit among commercial fishing license holders and, based on that advice, may seek to update the allocation formula (s.
NR 25.07 (2) (a), Wis. Adm. Code).
Description of the Existing Policies Relevant to the Rule, New Policies Proposed to be Included in the Rule and an Analysis of Policy Alternatives
Section
NR 1.04, Wis. Adm. Code, provides the guiding department policy related to harvest limits and quota allocations: “(4) The fishery resources of the Great Lakes, though renewable, experience dynamic changes and are limited. The resources will be managed in accordance with sound management principles to attain optimum sustainable utilization. Management measures may include but are not limited to seasons, bag and harvest limits, limitations on the type and amount of fishing gear, limitation as to participation in the fisheries and allocation of allowable harvest among various users and the establishment of restricted areas."
Although the development of objective criteria by which harvest limits would be automatically adjusted is a departure from past practice of periodic ad hoc adjustments of harvest limits, it is fully consistent with the existing policy. Under existing practice, harvest limits may be adjusted by rule at any time that assessment data indicate that a fish population is either growing or declining. Use of an objective measure for fish population changes will allow the department to respond in a timely and predictable manner when quota adjustments are necessary. Automatic adjustment of harvest limits will have two advantages: 1) It will protect fish populations by reducing harvests promptly when fish abundance declines. 2) It will support commercial fisheries by allowing immediate harvest increases when fish populations recover.
The Lake Michigan Commercial Fishing Board is directed by s.
29.519 (7), Stats., to “recommend to the department species harvest limits and formulas for the allotment of individual licensee catch quotas when the department establishes species harvest limits for allocation among licensees." We have held preliminary discussions with the Board members and are aware of some concerns they have raised, including the need to fully consider LMCFB advice during rule development, to find objective criteria that reliably reflect the status of the fish populations, and to consider incorporating more than one data source into the criteria.
Detailed Explanation of Statutory Authority for the Rule (Including the Statutory Citation and Language)
Section
29.014 (1), Stats., directs the department to “establish and maintain open and closed seasons for fish and game and any bag limits, size limits, rest days and conditions governing the taking of fish and game that will conserve the fish and game supply and ensure the citizens of this state continued opportunities for good fishing hunting and trapping." Section
29.041, Stats., provides that the department “may regulate fishing and fishing on and in all interstate boundary waters, and outlying waters." Section
29.519 (1m) (b), Stats., provides that “After giving due consideration to the recommendations made by the commercial fishing boards under sub. (7), the department may establish species harvest limits and promulgate rules to establish formulas for the allocation of the species harvest limits among commercial fishing licensees or for the allotment of individual licensee catch quotas."
Estimate of Amount of Time that State Employees will Spend Developing the Rule and of Other Resources Necessary to Develop the Rule
Employees may spend approximately 200 hours developing the rule. This will require some within-state travel to meet with the Lake Michigan Commercial Fishing Board and interested members of the public.
List with Description of all Entities that may be Affected by the Proposed Rule
The rule will affect commercial fishing license holders, fish wholesalers, and others whose interests or businesses are affected by commercial fishing.
Summary and Preliminary Comparison with any Existing or Proposed Federal Regulation that is Intended to Address the Activities to be Regulated by the Proposed Rule
No federal regulations apply.
Anticipated Economic Impact of Implementing the Rule
Adjustments in harvest limits always affect the livelihoods of commercial fishers and associate businesses, but such adjustments are a necessary part of fisheries management. Because this rule will cause those adjustments to be more timely and responsive to fish population changes it will support stability in fish populations and in the fishery. Harvest limit adjustments can result in economic benefit to commercial fishers or, when the fish population is in decline, economic losses. We expect that the economic analysis will reveal a moderate impact (Level 2) of between $50,000 and $2,000,000.
Contact Person
William Horns, Great Lakes Fisheries Specialist, 608-266-8782
