Anything to the contrary in this chapter notwithstanding, with respect to consumer credit sales and consumer loans secured by real property and insured or guaranteed by the federal government, or any agency or instrumentality thereof, this chapter shall not prohibit or limit any charges which are required by statutes, rules or regulations of such government, agency or instrumentality.
This section does not apply to consumer credit sales of or consumer loans secured by a first lien on or equivalent security interest in mobile homes or manufactured homes, as defined in s. 101.91
, if the sales or loans are made on or after November 1, 1981.
See also ch. DFI-WCA 1
, Wis. adm. code.
Additional charges. 422.202(1)(b)1.
A clear, conspicuous and specific statement in writing is furnished by the creditor to the customer setting forth the cost and term of the insurance if obtained from or through the merchant and stating that the customer may choose the person through which the insurance is to be obtained.
With respect to a consumer credit transaction which is other than one pursuant to an open-end credit plan and which is entered into on or after May 17, 1988, a charge not to exceed $15 for each check presented for payment to a creditor which is returned unsatisfied because the drawer does not have an account with the drawee, does not have sufficient funds in his or her account or does not have sufficient credit with the drawee.
With respect to a consumer credit transaction which involves a manufactured home transaction as defined in s. 138.056 (1) (bg)
or the extension of credit secured by an interest in real property, the parties may agree to the payment by the customer of the following charges in addition to the finance charge, if they will be paid to persons not related to the merchant, are reasonable in amount, bona fide and not for the purpose of circumvention or evasion of this subchapter:
Fees for preparation of a deed, settlement statement or other documents;
With respect to an open-end credit plan, regardless of when the plan was entered into:
A creditor may charge, collect and receive other fees and charges, in addition to the finance charge authorized under s. 422.201
, that are agreed upon by the creditor and the customer. These other fees and charges may include periodic membership fees, cash advance fees, charges for exceeding a designated credit limit, charges for late payments, charges for providing copies of documents and charges for the return of a dishonored check or other payment instrument.
The creditor mails or delivers to the customer a notice of the customer's right to cancel the insurance in accordance with s. 424.401
Other charges not constituting finance charges as approved by written opinion of the administrator or not disapproved under s. 426.104 (4) (b)
Notwithstanding par. (a)
, in a consumer credit transaction pursuant to an open-end credit plan, a creditor may sell and finance the products described in par. (a) 2.
without regard to the limitations contained in those subdivisions or in s. 424.301
if the transaction is solely to purchase the products described in par. (a) 2.
and if the transaction is not evidenced by a credit document that is signed by the customer on the same day as the document evidencing consummation of the open-end credit plan.
Except as otherwise provided in chs. 421
, assessing an additional charge which is not authorized by this section and which is not included by the creditor as part of the finance charge, or which is authorized by this section but assessed in a manner inconsistent with this section, is a violation subject to s. 425.304
See also ss. DFI-WCA 1.263
, Wis. adm. code.
Delinquency charges. 422.203(2)
No delinquency charge may be collected on an installment which is paid in full on or before the 10th day after its scheduled or deferred due date even though an earlier maturing installment or a delinquency charge on an earlier installment may not have been paid in full. For purposes of this subsection payments are applied first to current installments and then to delinquent installments.
A delinquency charge under sub. (1)
may be collected only once on an installment however long it remains in default. A delinquency charge may not be collected for a late installment if, with respect to that installment, there has been a deferral.
A fee that is required in order to allow the reinstatement of payments after a default is a delinquency charge. Burny v. Thorn, 944 F. Supp. 762
A deferral charge may be collected at the time it is assessed or at any time thereafter.
The deferment period is that period of time in which no payment is required or made by reason of the deferral.
In addition to the deferral charge, the merchant may make appropriate additional charges as provided in s. 422.202
. The amount of such charges which is not paid in cash may be added to the amount deferred for the purpose of calculating the deferral.
The agreement shall incorporate by reference the transaction to which the deferral applies.
This subsection does not apply to deferral charges made under sub. (8)
The parties may agree in writing at the time of a precomputed consumer transaction, refinancing or consolidation that if an installment is not paid within 30 days after its due date, the creditor at any time may unilaterally grant a deferral and make charges as provided in this section if a notice is sent to the customer at least 10 days prior to deferral advising the customer of the total dollar amount of the deferral charge and the periods of deferral, but such deferral shall not be allowed if the customer has a valid claim or defense against the creditor for the payment not made. Only one such unilateral deferral on a consumer credit transaction may be made during any 12-month period.
Appropriate additional charges under s. 422.202
, included for the period of refinancing.
The maximum period for payments resulting from refinancing under this section shall not exceed the periods provided in s. 422.403
commencing with the date of refinancing, but the outstanding balances for the purposes of that section shall be based on the amount financed resulting from such refinancing.
History: 1971 c. 239
; 1979 c. 10
422.206 Finance charge on consolidation. 422.206(2)
The unpaid balance with respect to the previous transaction shall be determined under s. 422.205
and the amount financed resulting therefrom shall be consolidated by adding to it the amount financed with respect to the subsequent transaction. The creditor may contract for and receive a finance charge based on the aggregate amount financed resulting from consolidation at a rate not exceeding that permitted by s. 422.201
The maximum period for payments resulting from consolidation under this section shall not exceed the periods provided for in s. 422.403
commencing with the date of consolidation but the outstanding balances for the purposes of that section shall be based on the amount of the consolidated outstanding balance.
A finance charge may be made for sums advanced pursuant to sub. (1)
at a rate not exceeding the rate stated to the customer pursuant to the provisions on disclosure in subch. III
, or if no disclosure is required then at the annual rate of finance charge assessed on that transaction. With respect to an open-end credit plan the amount of the advance may be added to the unpaid balance of the account and the merchant may make a finance charge not exceeding that permitted by s. 422.201
See also s. DFI-WCA 1.30
, Wis. adm. code.
History: 1971 c. 239
; 1995 a. 329
Rebate on prepayment. 422.209(1m)(a)2.
The loan administration fee is for a consumer loan that is secured primarily by an interest in real property or in a mobile home, as defined in s. 101.91 (10)
, or in a manufactured home, as defined in s. 101.91 (2)
Notwithstanding par. (a)
, if a merchant retains any portion of a loan administration fee charged on a loan that is prepaid from the proceeds of a new loan made by the same merchant within 6 months after the prior loan, then the merchant shall reduce any loan administration fee on the new loan by the amount of the loan administration fee on the prior loan that was retained by the merchant.
The unearned portion of the precomputed finance charge on consumer credit transactions repayable in substantially equal successive installments at approximately equal intervals shall be equal to at least that portion of the finance charge which the sums of the installment balances of the obligation scheduled to be outstanding after the installment date nearest the date of prepayment bears to the sum of all installment balances originally scheduled to be outstanding under the obligation. For the purpose of determining the installment date nearest the date of prepayment when payments are monthly, any prepayment made on or before the 15th day following an installment due date shall be deemed to have been made as of the installment due date, and if prepayment occurs on or after the 16th day it shall be deemed to have been made on the succeeding installment due date. This method of calculating rebates may be referred to as the "rule of 78" or "sum of the digits" method. This paragraph applies to all of the following:
Consumer credit transactions entered into before November 1, 1981.
Consumer credit transactions in which the amount financed is less than $5,000, which have initial terms of less than 37 months and which are entered into on or after August 1, 1987.
The unearned portion of the finance charge on consumer credit transactions described in par. (c)
is, at the option of the creditor, either of the following:
With respect to other precomputed consumer credit transactions, the administrator may prescribe by rule the refund formula consistent with sub. (2) (a)
taking into account the irregularity of installment amounts and due dates.
Except as provided in par. (b)
, the unearned portion of a deferral charge is the deferral charge multiplied by the number of unexpired payment periods as of the date of prepayment and divided by the total number of installments deferred.
This section does not preclude the collection or retention by the creditor of delinquency charges under s. 422.203
for delinquencies or payments due prior to prepayment.
If the maturity of the obligation is accelerated for any reason and judgment is obtained, the customer is entitled to the same rebate as if payment in full had been made on the date judgment is entered against the customer.
For purpose of this section, the finance charge in a manufactured home transaction as defined in s. 138.056 (1) (bg)
does not include fees, discounts, or other sums actually imposed by the government national mortgage association, the federal national mortgage association, the federal home loan mortgage corporation or other governmentally sponsored secondary mortgage market purchaser of the loan or any private secondary mortgage market purchaser of the loan who is not a person related to the original lender.
History: 1997 a. 302
422.301 Requirements of federal act.
In addition to the disclosures required by the federal consumer credit protection act, if any, the creditor shall disclose to the customer to whom credit is extended the information required by this subchapter. With respect to every consumer credit sale payable in installments (s. 421.301 (30)
) upon which no separate finance charge is stated or imposed (s. 421.301 (20)
) the creditor shall make disclosures in accordance with the federal consumer credit protection act, to the extent applicable, whether or not such act requires such disclosures to be made.
The information required by this subchapter to be disclosed by the creditor to the customer to whom credit is extended:
May be supplemented by additional information or explanations supplied by the creditor, but none shall be stated, utilized or placed so as to mislead or confuse the customer or contradict, obscure or detract attention from the information required by this subchapter to be disclosed; and so long as the additional information or explanations do not have the effect of circumventing, evading or unduly complicating the information required to be disclosed by this subchapter; and
Before any payment is due, the creditor shall furnish the customer with an exact copy of each instrument, document, agreement and contract which is signed by the customer and which evidences the customer's obligation. If there is more than one customer, delivery of copies of the documents to one of them constitutes compliance with this subsection.
Anything to the contrary in chs. 421
notwithstanding, the sale of insurance under ch. 424
shall not be considered a sale requiring separate disclosure other than as provided in s. 422.202 (1)
History: 1971 c. 239
; 1979 c. 10
422.303 Form requirements other than open-end or discount. 422.303(1)(1)
In a consumer credit sale other than one pursuant to an open-end credit plan or a credit sale in which the only finance charge is a prompt payment discount as described in s. 422.201 (8)
, the customer's obligation to pay the total of payments shall be evidenced by a single instrument, which shall include, in addition to the other disclosures required by this subchapter, the signature of the seller, the signature of the customer, the date on which it was signed and a description of any property the customer transfers to the seller as a trade-in.
The terms of such instrument evidencing a consumer credit sale shall be set forth in not less than 8-point standard type, or such similar type as is prescribed in rules adopted by the administrator, to the extent that larger type is not specifically required by chs. 421
NOTICE TO CUSTOMER
(a) DO NOT SIGN THIS BEFORE YOU READ THE WRITING ON THE REVERSE SIDE, EVEN IF OTHERWISE ADVISED.
(b) DO NOT SIGN THIS IF IT CONTAINS ANY BLANK SPACES.
Legislative Council Note, 1973: Makes clear that this section refers to copies of documents given subsequently to documents furnished in the original transaction. Section 422.302 (3) requires that a copy of each document signed by the customer and evidencing his obligation be given to the customer before the first payment is due. This section is intended to refer to additional copies of such documents, furnished to the customer during the course of repaying the obligation. The added language inserted in sub. (5) further clarifies this intent. [Bill 432-A]
Every writing evidencing a consumer credit transaction shall be completed as to all essential provisions prior to the signing thereof by the parties, and no creditor shall induce, encourage or otherwise permit the customer to sign a writing containing blank spaces which are to be filled in after it is signed except for a space provided for the identifying numbers of goods if not available at the time of the transaction. Blanks relating to price, charges or terms of payment which are inapplicable to a transaction must be filled in a manner which reveals their inapplicability unless their inapplicability is clearly and conspicuously indicated.
Notice to obligors.
(b) You will be liable and fully responsible for payment of the above amount even though you may not be entitled to any of the goods, services or loan furnished thereunder.
(c) You may be sued in court for the payment of the amount due under this consumer credit transaction even though the customer named above may be working or have funds to pay the amount due.
(f) The undersigned acknowledges receipt of an exact copy of this notice.
The notice must be printed, typed or otherwise reproduced in a size and style equal to at least 10-point boldface type or such similar type as prescribed by the administrator, and shall contain only the matter above set forth and the address of the merchant.
This notice shall not be required to be given to a merchant who endorses or is otherwise liable for payment to an assignee or holder of the customer's obligation.
Taking or arranging for a person to sign an instrument in violation of this section is a violation subject to s. 425.304
See also s. DFI-WCA 1.351
, Wis. adm. code.
The creditor shall furnish the customer, without request, a written receipt for each payment made in cash, or any other time the method of payment does not itself provide evidence of payment.
At any time after consummation of a consumer credit transaction other than one pursuant to an open-end credit plan, the creditor, upon written request by the customer, shall furnish to the customer a written statement of the amounts and specifying the dates of payments received and charges imposed, together with the unpaid balance at the time of the statement. With respect to transactions secured by a first lien mortgage, or equivalent security interest, on real property such statement need specify only the dates and amounts of payments received and charges imposed during the previous 12 months, and the unpaid balance remaining at the time of the statement. The customer shall be entitled to one such statement free of charge once every 12 months. Additional statements shall be furnished if the customer pays the creditor's reasonable costs of preparing and furnishing the statement.
With respect to an open-end credit plan, the creditor shall at any time upon written request by the customer, furnish to the customer a written statement, which may consist of copies of the periodic statements furnished to the customer under the plan, specifying the dates and amounts of purchases or loan credit extended and payments received during the previous 12 months, and the unpaid balance remaining at the time of the statement. The customer shall be entitled to one such statement at a charge not in excess of $1 once every 12 months. Additional statements shall be furnished if the customer pays the creditor's reasonable costs of preparing and furnishing the statement.
Except as provided in s. 708.15
, within 45 days after payment by the customer of all sums for which the customer is obligated under a consumer credit transaction other than one pursuant to an open-end credit plan, the creditor shall give or forward to the customer instruments which acknowledge payment in full, and release of any security interest when there is no outstanding secured obligation, and furnish to the customer or the customer's designee evidence of the release or assignment to such designee of any recorded lien on real estate and termination of any filed financing statement which perfected such security interest.
See also s. DFI-WCA 1.36
, Wis. adm. code.