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1995 - 1996 LEGISLATURE
SENATE SUBSTITUTE AMENDMENT 1,
To 1995 SENATE BILL 589
March 19, 1996 - Offered by
Committee on Education and Financial Institutions.
SB589-SSA1,2,7
1An Act to repeal 218.01 (6) (b) 1. to 8., 218.01 (6) (bm) and (bn), 218.01 (6) (j) and
2422.201 (4);
to renumber 218.01 (2) (bb);
to renumber and amend 218.01 (3)
3(bf) 1. and 218.01 (6) (b) (intro.);
to amend 138.05 (6), 218.01 (1) (n) 1. and 2.,
4218.01 (1) (p), 218.01 (1) (v), 218.01 (1a), 218.01 (2) (b), 218.01 (2) (d) 8. b., 218.01
5(2) (dr), 218.01 (2) (h) 2., 218.01 (2) (k) 3., 218.01 (2) (k) 5., 218.01 (3) (a) 5.,
6218.01 (3) (a) 6., 218.01 (3) (a) 8., 218.01 (3) (a) 9., 218.01 (3) (a) 10., 218.01 (3)
7(a) 13., 218.01 (3) (a) 14., 218.01 (3) (a) 18., 218.01 (3) (a) 19., 218.01 (3) (a) 20.,
8218.01 (3) (a) 21., 218.01 (3) (a) 25., 218.01 (3) (a) 29., 218.01 (5) (a), 218.01 (6)
9(d), 218.01 (7b), 218.01 (9) (b), 218.04 (5) (a) 5., 344.51 (title), 344.51 (1), 344.51
10(2), 409.201, 409.203 (5), 421.103 (2), 421.201 (5), 421.202 (6), 421.202 (7),
11421.202 (8), 421.301 (20) (intro.), 421.301 (35), 422.201 (7) (intro.) and (a),
12422.201 (8), (9) and (12), 422.207 (1), 422.208, 422.303 (title) and (1), 422.303
13(3) (intro.) and (5), 422.413 (1), 422.417 (2), 424.201 (1) and (2), 425.106 (1)
14(intro.), 425.107 (4), 426.104 (1), 426.104 (2) (intro.), 426.104 (2) (b) to (e),
15426.104 (4) (a), 426.104 (4) (ab) 1., 426.104 (4) (b), 426.105, 426.107, 426.109,
16426.110 (1), 426.110 (3), 426.110 (14), 426.111, 426.201 (2) (g), 426.202 (1m) (c)
1and 426.301; and
to create 218.01 (1) (ar), 218.01 (1) (ct), 218.01 (1) (ji), 218.01
2(1) (jj), 218.01 (1) (jk), 218.01 (1) (o) 5., 218.01 (1) (qm), 218.01 (1) (qr), 218.01
3(1) (qt), 218.01 (2) (bb) 2., 218.01 (3) (bf) 1. b., 218.01 (6x), 421.202 (9), 421.301
4(25m), 421.301 (43m), 422.202 (1) (e), 424.201 (3) and chapter 429 of the
5statutes;
relating to: the leasing of motor vehicles, motor vehicle consumer
6leases, prelease agreements, financial responsibility for domestic rented or
7leased vehicles and providing a penalty.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB589-SSA1,2,109
138.05
(6) This section does not apply to transactions governed by chs. 421 to
10427
and 429 or to discounts described in s. 422.201 (8) or (10) (e).
SB589-SSA1, s. 2
11Section
2. 218.01 (1) (ar) of the statutes is created to read:
SB589-SSA1,2,1212
218.01
(1) (ar) "Capitalized cost" has the meaning given in s. 429.104 (5).
SB589-SSA1, s. 3
13Section
3. 218.01 (1) (ct) of the statutes is created to read:
SB589-SSA1,2,1414
218.01
(1) (ct) "Consumer lease" has the meaning given in s. 429.104 (9).
SB589-SSA1, s. 4
15Section
4. 218.01 (1) (ji) of the statutes is created to read:
SB589-SSA1,2,1716
218.01
(1) (ji) "Lease" or "leasing" means, with respect to a lessor, to enter into
17or offer to enter into a consumer lease with a lessee.
SB589-SSA1, s. 5
18Section
5. 218.01 (1) (jj) of the statutes is created to read:
SB589-SSA1,2,1919
218.01
(1) (jj) "Lessee" has the meaning given in s. 429.104 (17).
SB589-SSA1, s. 6
20Section
6. 218.01 (1) (jk) of the statutes is created to read:
SB589-SSA1,2,2221
218.01
(1) (jk) "Lessor" means a person who leases a motor vehicle to a lessee
22under a consumer lease, but does not include an assignee of a consumer lease.
SB589-SSA1, s. 7
23Section
7. 218.01 (1) (n) 1. and 2. of the statutes are amended to read:
SB589-SSA1,3,3
1218.01
(1) (n) 1. For commission, money or other thing of value, sells,
leases, 2exchanges, buys,
rents with the option of purchase, offers or attempts to negotiate
3a sale
, consumer lease or exchange of an interest in motor vehicles; or
,
SB589-SSA1,3,64
2. Is engaged wholly or in part in the business of selling
or leasing motor
5vehicles, including motorcycles, whether or not such motor vehicles are owned by
6such person, firm or corporation.
SB589-SSA1, s. 8
7Section
8. 218.01 (1) (o) 5. of the statutes is created to read:
SB589-SSA1,3,98
218.01
(1) (o) 5. Sales finance companies when engaged in purchasing or
9otherwise acquiring consumer leases from a motor vehicle dealer.
SB589-SSA1, s. 9
10Section
9. 218.01 (1) (p) of the statutes is amended to read:
SB589-SSA1,3,1511
218.01
(1) (p) "Motor vehicle salesperson" means sales representative, sales
12manager, general manager or other person who is employed by a motor vehicle dealer
13for the purpose of selling or approving retail sales
, or leasing or approving consumer
14leases, of motor vehicles. Any motor vehicle salesperson licensed hereunder shall be
15licensed to sell
or lease only for one dealer at a time.
SB589-SSA1,3,1917
218.01
(1) (qm) "Prelease agreement" means an agreement to enter into a
18consumer lease whereby the motor vehicle will be available and ready to be delivered
19to the prospective lessee at a later time.
SB589-SSA1,3,2121
218.01
(1) (qr) "Prospective lessee" has the meaning given in s. 429.104 (21).
SB589-SSA1,3,2323
218.01
(1) (qt) "Prospective lessor" has the meaning given in s. 429.104 (21m).
SB589-SSA1,4,7
1218.01
(1) (v) "Sales finance company" means and includes any person, firm or
2corporation engaging in the business, in whole or in part, of acquiring by purchase
3or by loan on the security thereof, or otherwise, retail instalment contracts
or
4consumer leases from retail sellers
or lessors in this state, including any motor
5vehicle dealer who sells
or leases any motor vehicle on an instalment contract
or
6consumer lease or acquires any retail instalment contracts in the dealer's retail sales
7or leases of motor vehicles.
SB589-SSA1,4,2410
218.01
(1a) Authority of licensors. The department of transportation shall
11issue the licenses provided for in sub. (2) (d) 1. to 6. and have supervision over the
12licensees thereunder in respect to all the provisions of this section, except only as to
13such matters as relate to the sale of motor vehicles on retail instalment contracts and
14the financing and servicing of such contracts
and as to such matters as relate to
15prelease agreements under sub. (6x) and consumer leases under chs. 421 to 427 and
16429, over which matter the division of banking shall have jurisdiction and control,
17and the division of banking shall issue the licenses to sales finance companies.
18Either licensor hereunder shall, upon request, furnish the other licensor with any
19information it may have in respect to any licensee or applicant for license or any
20transaction in which such licensee or applicant may be a party or be interested. No
21license shall be issued under sub. (2) (d) 1. and 8. until both licensors have approved
22the application. The suspension or revocation of either of such licenses shall
23automatically likewise suspend or revoke the other license; and such suspension or
24revocation shall be certified by the licensor ordering it to the other licensor.
SB589-SSA1,5,173
218.01
(2) (b) Application for license shall be made to the licensor, at such time,
4in such form and with such information as the licensor shall require and shall be
5accompanied by the required fees. An applicant for a sales finance company license,
6other than a motor vehicle dealer, shall pay to the division of banking a
7nonrefundable $300 investigation fee in addition to the license fee under par. (dr).
8If the cost of an investigation exceeds $300, the applicant shall, upon demand of the
9division of banking, pay the amount by which the cost of the investigation exceeds
10the nonrefundable fee. A licensee is not required to pay an investigation fee for the
11renewal of a license. The licensor may require the applicant to provide information
12relating to any pertinent matter that is commensurate with the safeguarding of the
13public interest in the locality in which the applicant proposes to engage in business,
14except that information relating to the applicant's solvency and financial standing
15may not be required
for motor vehicle dealers except as provided in par. (h) 1. The
16information provided may be considered by the licensor in determining the fitness
17of the applicant to engage in business as set forth in this section.
SB589-SSA1, s. 17
20Section
17. 218.01 (2) (bb) 2. of the statutes is created to read:
SB589-SSA1,6,321
218.01
(2) (bb) 2. A sales finance company or an applicant for a sales finance
22company license shall provide and maintain in force a bond or irrevocable letter of
23credit of not less than $25,000 issued by a surety company licensed to do business in
24this state or a federally insured financial institution, as defined in s. 705.01 (3). The
25bond or letter of credit shall be payable to the state of Wisconsin for the use of the
1state and of any person who sustains a loss because of an act of a sales finance
2company that constitutes grounds for the suspension or revocation of a license under
3this section.
SB589-SSA1,6,96
218.01
(2) (d) 8. b. For motor vehicle dealers that operate as a sales finance
7company or that carry or retain
time sales retail instalment contracts
or consumer
8leases for more than 30 days, to the division of banking, the same as for sales finance
9companies under par. (dr)
, except for gross volume of $100,000 or less, $50.
SB589-SSA1,6,2112
218.01
(2) (dr) The fee for licenses for sales finance companies
, except as
13provided in par. (d) 8., for each calendar year, or part of a calendar year, is based on
14the gross volume of purchases of retail
sales instalment contracts
and consumer
15leases of motor vehicles sold
or leased in this state for the 12 months immediately
16preceding October 31 of the year in which the application for license is made, as
17follows: On a gross volume of $100,000 or less, $50; and on each $100,000 or part
18thereof over $100,000, an additional $15. No extra charge shall be made for branch
19licenses for sales finance companies. Gross volume shall be based on the unpaid
20balance of the retail
instalment contracts
and the base lease payments, as defined
21in s. 429.104 (4), of the consumer leases.
SB589-SSA1,7,1224
218.01
(2) (h) 2. Provided the licensor has reasonable cause to doubt the
25financial responsibility of the applicant or licensee or the compliance by the
1applicant or licensee with this section, the licensor may require the applicant or
2licensee to furnish and maintain a bond in the form, amount and with the sureties
3it approves, but not less than $5,000, nor more than $100,000, conditioned upon the
4applicant or licensee complying with the statutes applicable to the licensee and as
5indemnity for any loss sustained by any person by reason of any acts of the licensee
6constituting grounds for suspension or revocation of the license under this section.
7The bonds shall be executed in the name of the department of transportation for the
8benefit of any aggrieved parties; provided that the aggregate liability of the surety
9to all such parties shall, in no event, exceed the amount of the bond. The bonding
10requirements in this subdivision shall not apply to manufacturers, factory branches,
11and their agents and is in addition to the bond or letter of credit required of a motor
12vehicle dealer under par. (bb)
1.
SB589-SSA1, s. 21
13Section
21. 218.01 (2) (k) 3. of the statutes is amended to read:
SB589-SSA1,7,1514
218.01
(2) (k) 3. Has had experience or training in, or is otherwise qualified for,
15selling
or leasing motor vehicles.
SB589-SSA1, s. 22
16Section
22. 218.01 (2) (k) 5. of the statutes is amended to read:
SB589-SSA1,7,1817
218.01
(2) (k) 5. Is reasonably familiar with the motor vehicle sales
or consumer
18lease laws or contracts that the applicant is proposing to solicit, negotiate or effect.
SB589-SSA1, s. 23
19Section
23. 218.01 (3) (a) 5. of the statutes is amended to read:
SB589-SSA1,7,2120
218.01
(3) (a) 5. Wilfully defrauding any retail buyer
, lessee or prospective
21lessee to the buyer's
, lessee's or prospective lessee's damage.
SB589-SSA1, s. 24
22Section
24. 218.01 (3) (a) 6. of the statutes is amended to read:
SB589-SSA1,7,2423
218.01
(3) (a) 6. Wilful failure to perform any written agreement with any retail
24buyer
, lessee or prospective lessee.
SB589-SSA1, s. 25
25Section
25. 218.01 (3) (a) 8. of the statutes is amended to read:
SB589-SSA1,8,2
1218.01
(3) (a) 8. Having made a fraudulent sale,
consumer lease, prelease
2agreement, transaction or repossession.
SB589-SSA1,8,74
218.01
(3) (a) 9. Fraudulent misrepresentation, circumvention or concealment
5through whatsoever subterfuge or device of any of the material particulars or the
6nature thereof required hereunder to be stated or furnished to the retail buyer
, lessee
7or prospective lessee.
SB589-SSA1, s. 27
8Section
27. 218.01 (3) (a) 10. of the statutes is amended to read:
SB589-SSA1,8,129
218.01
(3) (a) 10. Employment of fraudulent devices, methods or practices in
10connection with compliance with the statutes with respect to the retaking of goods
11under retail instalment contracts
or consumer leases and the redemption and resale
12or subsequent lease of such goods.
SB589-SSA1, s. 28
13Section
28. 218.01 (3) (a) 13. of the statutes is amended to read:
SB589-SSA1,8,1514
218.01
(3) (a) 13. Having sold a retail instalment contract
or consumer lease 15to a sales finance company not licensed hereunder.
SB589-SSA1, s. 29
16Section
29. 218.01 (3) (a) 14. of the statutes is amended to read:
SB589-SSA1,8,1817
218.01
(3) (a) 14. Having violated any law relating to the sale,
lease, 18distribution or financing of motor vehicles.
SB589-SSA1, s. 30
19Section
30. 218.01 (3) (a) 18. of the statutes is amended to read:
SB589-SSA1,9,520
218.01
(3) (a) 18. Having accepted an order
or contract of purchase
or a contract 21from a buyer
or a consumer lease or prelease agreement from a lessee or prospective
22lessee if such arrangement results in the practice of bushing. For the purpose of this
23section, "bushing" means
, with respect to an order or contract of purchase, the
24practice of increasing the selling price of a motor vehicle above that originally quoted
25the purchaser as evidenced by a purchase order or contract which has been signed
1by both the purchaser and dealer licensee
and, with respect to a consumer lease or
2prelease agreement, the practice of increasing the capitalized cost above that
3originally quoted the lessee or prospective lessee as evidenced by a consumer lease
4or prelease agreement which has been signed by both the lessee or prospective lessee
5and the dealer licensee.
SB589-SSA1, s. 31
6Section
31. 218.01 (3) (a) 19. of the statutes is amended to read:
SB589-SSA1,9,117
218.01
(3) (a) 19. Having advertised, printed, displayed, published,
8distributed, broadcast or televised or caused or permitted to be advertised, printed,
9displayed, published, distributed, broadcast or televised in any manner whatsoever,
10any statement or representation with regard to the sale
, lease or financing of motor
11vehicles which is false, deceptive or misleading.
SB589-SSA1, s. 32
12Section
32. 218.01 (3) (a) 20. of the statutes is amended to read:
SB589-SSA1,9,1913
218.01
(3) (a) 20. Having set up, promoted or aided in the promotion of a plan
14by which motor vehicles are sold
or leased to a person for a consideration and upon
15the further consideration that the purchaser
or lessee agrees to secure one or more
16persons to participate in the plan by respectively making a similar purchase
or lease 17and in turn agreeing to secure one or more persons likewise to join in said plan, each
18purchaser
or lessee being given the right to secure money, credits, goods or something
19of value, depending upon the number of persons joining in the plan.