AB954: Bill Text

AB954, s. 10 Section 10. 218.01 (1) (qm) of the statutes is created to read:

AB954,6,24 218.01 (1) (qm) "Prelease agreement" means an agreement to enter into a consumer lease whereby the motor vehicle will be available and ready to be delivered to the prospective lessee at a later time.

AB954, s. 11 Section 11. 218.01 (1) (v) of the statutes is amended to read:

AB954,7,7 218.01 (1) (v) "Sales finance company" means and includes any person, firm or corporation engaging in the business, in whole or in part, of acquiring by purchase or by loan on the security thereof, or otherwise, retail instalment contracts or consumer leases from retail sellers or lessors in this state, including any motor vehicle dealer who sells or leases any motor vehicle on an instalment contract or consumer lease or acquires any retail instalment contracts in the dealer's retail sales or leases of motor vehicles.

AB954, s. 12 Section 12. 218.01 (1a) of the statutes, as affected by 1995 Wisconsin Act 27, is amended to read:

AB954,7,24 218.01 (1a) Authority of licensors. The department of transportation shall issue the licenses provided for in sub. (2) (d) 1. to 6. and have supervision over the licensees thereunder in respect to all the provisions of this section, except only as to such matters as relate to the sale of motor vehicles on retail instalment contracts and the financing and servicing of such contracts and as to such matters as relate to consumer leases, over which matter the division of banking shall have jurisdiction and control, and the division of banking shall issue the licenses to sales finance companies. Either licensor hereunder shall, upon request, furnish the other licensor with any information it may have in respect to any licensee or applicant for license or any transaction in which such licensee or applicant may be a party or be interested. No license shall be issued under sub. (2) (d) 1. and 8. until both licensors have approved the application. The suspension or revocation of either of such licenses shall automatically likewise suspend or revoke the other license; and such suspension or revocation shall be certified by the licensor ordering it to the other licensor.

AB954, s. 13 Section 13. 218.01 (2) (b) of the statutes, as affected by 1995 Wisconsin Act 27, section 5843, is amended to read:

AB954,8,17 218.01 (2) (b) Application for license shall be made to the licensor, at such time, in such form and with such information as the licensor shall require and shall be accompanied by the required fees. An applicant for a sales finance company license, other than a motor vehicle dealer, shall pay to the division of banking a nonrefundable $300 investigation fee in addition to the license fee under par. (dr). If the cost of an investigation exceeds $300, the applicant shall, upon demand of the division of banking, pay the amount by which the cost of the investigation exceeds the nonrefundable fee. A licensee is not required to pay an investigation fee for the renewal of a license. The licensor may require the applicant to provide information relating to any pertinent matter that is commensurate with the safeguarding of the public interest in the locality in which the applicant proposes to engage in business, except that information relating to the applicant's solvency and financial standing may not be required for motor vehicle dealers except as provided in par. (h) 1. The information provided may be considered by the licensor in determining the fitness of the applicant to engage in business as set forth in this section.

AB954, s. 14 Section 14. 218.01 (2) (bb) of the statutes, as affected by 1995 Wisconsin Act 27, is renumbered 218.01 (2) (bb) 1.

AB954, s. 15 Section 15. 218.01 (2) (bb) 2. of the statutes is created to read:

AB954,9,3 218.01 (2) (bb) 2. A sales finance company or an applicant for a sales finance company license shall provide and maintain in force a bond or irrevocable letter of credit of not less than $25,000 issued by a surety company licensed to do business in this state or a federally insured financial institution, as defined in s. 705.01 (3). The bond or letter of credit shall be payable to the state of Wisconsin for the use of the state and of any person who sustains a loss because of an act of a sales finance company that constitutes grounds for the suspension or revocation of a license under this section.

AB954, s. 16 Section 16. 218.01 (2) (d) 8. b. of the statutes, as affected by 1995 Wisconsin Act 27, is amended to read:

AB954,9,9 218.01 (2) (d) 8. b. For motor vehicle dealers that operate as a sales finance company or that carry or retain time sales retail instalment contracts or consumer leases for more than 30 days, to the division of banking, the same as for sales finance companies under par. (dr), except for gross volume of $100,000 or less, $50.

AB954, s. 17 Section 17. 218.01 (2) (dr) of the statutes, as affected by 1995 Wisconsin Act 27, is amended to read:

AB954,9,20 218.01 (2) (dr) The fee for licenses for sales finance companies, except as provided in par. (d) 8., for each calendar year, or part of a calendar year, is based on the gross volume of purchases of retail sales instalment contracts and consumer leases of motor vehicles sold or leased in this state for the 12 months immediately preceding October 31 of the year in which the application for license is made, as follows: On a gross volume of $100,000 or less, $50; and on each $100,000 or part thereof over $100,000, an additional $15. No extra charge shall be made for branch licenses for sales finance companies. Gross volume shall be based on the unpaid balance of the retail instalment contracts and consumer leases.

AB954, s. 18 Section 18. 218.01 (2) (h) 2. of the statutes, as affected by 1995 Wisconsin Act 27, is amended to read:

AB954,9,25 218.01 (2) (h) 2. Provided the licensor has reasonable cause to doubt the financial responsibility of the applicant or licensee or the compliance by the applicant or licensee with this section, the licensor may require the applicant or licensee to furnish and maintain a bond in the form, amount and with the sureties it approves, but not less than $5,000, nor more than $100,000, conditioned upon the applicant or licensee complying with the statutes applicable to the licensee and as indemnity for any loss sustained by any person by reason of any acts of the licensee constituting grounds for suspension or revocation of the license under this section. The bonds shall be executed in the name of the department of transportation for the benefit of any aggrieved parties; provided that the aggregate liability of the surety to all such parties shall, in no event, exceed the amount of the bond. The bonding requirements in this subdivision shall not apply to manufacturers, factory branches, and their agents and is in addition to the bond or letter of credit required of a motor vehicle dealer under par. (bb) 1.

AB954, s. 19 Section 19. 218.01 (2) (k) 3. of the statutes is amended to read:

AB954,10,14 218.01 (2) (k) 3. Has had experience or training in, or is otherwise qualified for, selling or leasing motor vehicles.

AB954, s. 20 Section 20. 218.01 (2) (k) 5. of the statutes is amended to read:

AB954,10,17 218.01 (2) (k) 5. Is reasonably familiar with the motor vehicle sales or consumer lease laws or contracts that the applicant is proposing to solicit, negotiate or effect.

AB954, s. 21 Section 21. 218.01 (3) (a) 5. of the statutes is amended to read:

AB954,10,20 218.01 (3) (a) 5. Wilfully defrauding any retail buyer , lessee or prospective lessee to the buyer's, lessee's or prospective lessee's damage.

AB954, s. 22 Section 22. 218.01 (3) (a) 6. of the statutes is amended to read:

AB954,10,23 218.01 (3) (a) 6. Wilful failure to perform any written agreement with any retail buyer, lessee or prospective lessee.

AB954, s. 23 Section 23. 218.01 (3) (a) 8. of the statutes is amended to read:

AB954,11,2 218.01 (3) (a) 8. Having made a fraudulent sale, consumer lease, prelease agreement, transaction or repossession.

AB954, s. 24 Section 24. 218.01 (3) (a) 9. of the statutes is amended to read:

AB954,11,7 218.01 (3) (a) 9. Fraudulent misrepresentation, circumvention or concealment through whatsoever subterfuge or device of any of the material particulars or the nature thereof required hereunder to be stated or furnished to the retail buyer, lessee or prospective lessee.

AB954, s. 25 Section 25. 218.01 (3) (a) 10. of the statutes is amended to read:

AB954,11,12 218.01 (3) (a) 10. Employment of fraudulent devices, methods or practices in connection with compliance with the statutes with respect to the retaking of goods under retail instalment contracts or consumer leases and the redemption and resale or subsequent lease of such goods.

AB954, s. 26 Section 26. 218.01 (3) (a) 13. of the statutes is amended to read:

AB954,11,15 218.01 (3) (a) 13. Having sold a retail instalment contract or consumer lease to a sales finance company not licensed hereunder.

AB954, s. 27 Section 27. 218.01 (3) (a) 14. of the statutes is amended to read:

AB954,11,18 218.01 (3) (a) 14. Having violated any law relating to the sale, lease, distribution or financing of motor vehicles.

AB954, s. 28 Section 28. 218.01 (3) (a) 18. of the statutes is amended to read:

AB954,12,2 218.01 (3) (a) 18. Having accepted an order or contract of purchase or a contract from a buyer or a consumer lease or prelease agreement from a lessee or prospective lessee if such arrangement results in the practice of bushing. For the purpose of this section, "bushing" means the practice of increasing the selling price or capitalized cost of a motor vehicle above that originally quoted the purchaser , lessee or prospective lessee as evidenced by a purchase order or , contract, prelease agreement or consumer lease which has been signed by both the purchaser, lessee or prospective lessee and dealer licensee.

AB954, s. 29 Section 29. 218.01 (3) (a) 19. of the statutes is amended to read:

AB954,12,8 218.01 (3) (a) 19. Having advertised, printed, displayed, published, distributed, broadcast or televised or caused or permitted to be advertised, printed, displayed, published, distributed, broadcast or televised in any manner whatsoever, any statement or representation with regard to the sale, lease or financing of motor vehicles which is false, deceptive or misleading.

AB954, s. 30 Section 30. 218.01 (3) (a) 20. of the statutes is amended to read:

AB954,12,16 218.01 (3) (a) 20. Having set up, promoted or aided in the promotion of a plan by which motor vehicles are sold or leased to a person for a consideration and upon the further consideration that the purchaser or lessee agrees to secure one or more persons to participate in the plan by respectively making a similar purchase or lease and in turn agreeing to secure one or more persons likewise to join in said plan, each purchaser or lessee being given the right to secure money, credits, goods or something of value, depending upon the number of persons joining in the plan.

AB954, s. 31 Section 31. 218.01 (3) (a) 21. of the statutes is amended to read:

AB954,12,24 218.01 (3) (a) 21. Being a dealer who keeps open the dealer's place of business on Sunday for the purpose of buying, leasing or selling motor vehicles; but nothing in this subdivision shall apply to any person who conscientiously believes that the 7th day of the week, from sunset Friday to sunset Saturday, should be observed as the Sabbath and who actually refrains from conducting or engaging in the business of buying, leasing, selling or offering for lease or sale motor vehicles, or performing other secular business on that day.

AB954, s. 32 Section 32. 218.01 (3) (a) 25. of the statutes is amended to read:

AB954,13,1 218.01 (3) (a) 25. Having violated chs. 421 to 427 or 429.

AB954, s. 33 Section 33. 218.01 (3) (a) 29. of the statutes is amended to read:

AB954,13,5 218.01 (3) (a) 29. Being an inactive business, as evidenced by 3 or less motor vehicle purchases and sales or consumer leases during the prior year licensing period.

AB954, s. 34 Section 34. 218.01 (3) (bf) 1. of the statutes, as affected by 1995 Wisconsin Act 27, is amended to read:

AB954,13,16 218.01 (3) (bf) 1. The department of transportation shall not license as a dealer an applicant for the sale or lease of motor vehicles at retail unless such applicant owns or leases a vehicle display lot and a permanent building wherein there are facilities to display automobiles and motorcycles and facilities to repair functional and nonfunctional parts of motor vehicles and where replacement parts, repair tools and equipment to service motor vehicles are kept, and at which place of business shall be kept and maintained the books, records and files necessary to conduct the business. A residence, tent or temporary stand is not a sufficiently permanent place of business within the meaning of this paragraph.

AB954, s. 35 Section 35. 218.01 (5) (a) of the statutes is amended to read:

AB954,14,2 218.01 (5) (a) The licensor shall promote the interests of retail buyers and lessees of motor vehicles relating to default, delinquency, repossession or collection charges and the refund of the finance charge and insurance premium on prepayment of the instalment contract or consumer lease. It may define unfair practices in the motor vehicle industry and trade between licensees or between any licensees and retail buyers, lessees or prospective lessees of motor vehicles, but may not limit the price at which licensees may sell, assign or transfer receivables, contracts or other evidence of any obligation arising out of an instalment sale or consumer lease made under this section.

AB954, s. 36 Section 36. 218.01 (6) (b) (intro.) of the statutes, as affected by 1995 Wisconsin Act 27, is renumbered 218.01 (6) (b) and amended to read:

AB954,14,20 218.01 (6) (b) Prior to or concurrent with any instalment sale, the seller shall deliver to the buyer a written statement describing clearly the motor vehicle sold to the buyer, the cash sale price, the cash paid down by the buyer, the amount credited the buyer for any trade-in and a description of the trade-in, the cost to the retail buyer of any insurance, the amount financed which may include the cost of insurance, sales and use taxes, the amount of the finance charge, the amount of any other charge specifying its purpose, the total of payments due from the buyer, the terms of the payment of such total, the amount and date of each payment necessary finally to pay the total and a summary of any insurance coverage to be effected. The division of banking may determine the form of the statement. If a written order is taken from a prospective purchaser in connection with any instalment sale, the written statement shall be given to the purchaser prior to or concurrent with the signing of the order by the purchaser. The finance charge in a retail instalment sale made prior to April 6, 1980, however computed, excluding the cost of insurance shall not exceed the amount computed on the basis of the following annual percentage rates:

AB954, s. 37 Section 37. 218.01 (6) (b) 1. to 8. of the statutes are repealed.

AB954, s. 38 Section 38. 218.01 (6) (bm) and (bn) of the statutes are repealed.

AB954, s. 39 Section 39. 218.01 (6) (bp) of the statutes is amended to read:

AB954,15,3 218.01 (6) (bp) A retail instalment sale made after October 31, 1984, is not subject to any maximum finance charge limit rate. The maximum allowable finance charge shall be computed on the declining principal balance of the amount financed as determined under par. (b) at the annual percentage rate, disclosed pursuant to subch. III of ch. 422, according to the actuarial method as defined in s. 421.301 (1).

AB954, s. 40 Section 40. 218.01 (6) (d) of the statutes is amended to read:

AB954,15,8 218.01 (6) (d) A violation of par. (a), (b), (bm), (bn), or (bp) or (k) bars recovery of any finance charge by the seller, or an assignee of the seller who, at the time of the assignment, had knowledge of the violation, in any suit upon a sales contract arising from the sale where the violation occurred.

AB954, s. 41 Section 41. 218.01 (6) (j) of the statutes is repealed.

AB954, s. 42 Section 42. 218.01 (6x) of the statutes is created to read:

AB954,15,13 218.01 (6x) Prelease agreements. (a) Every prelease agreement shall be in writing, which shall contain all of the agreements of the parties with respect to entering into a consumer lease and shall be signed by both parties.

AB954,15,15 (b) No prelease agreement shall be binding on a prospective lessee unless all of the following apply:

AB954,15,18 1. All of the information required to be disclosed under par. (d) or in a consumer lease under s. 429.203 (3) and (4) is disclosed in writing to the prospective lessee before the execution of the prelease agreement by the prospective lessee.

AB954,15,21 2. The prelease agreement contains, directly above the place for the prospective lessee's signature, a notice in substantially the following language in bold-faced capital letters of not less than 10-point type:

AB954,15,22 NOTICE TO PROSPECTIVE LESSEE

AB954,16,3 a. THIS IS A BINDING PRELEASE AGREEMENT. BY SIGNING THIS AGREEMENT, YOU WILL BECOME OBLIGATED TO ENTER INTO AN AGREEMENT WITH THE PROSPECTIVE LESSOR TO LEASE THE VEHICLE DESCRIBED IN THIS AGREEMENT WHEN IT IS AVAILABLE AND READY TO BE DELIVERED TO YOU, UPON LEASE TERMS DISCLOSED IN THIS AGREEMENT OR IN THE ATTACHED DISCLOSURE STATEMENT, IF ANY.

AB954,16,5 b. DO NOT SIGN THIS AGREEMENT BEFORE YOU READ IT, INCLUDING THE WRITING ON THE REVERSE SIDE.

AB954,16,6 c. DO NOT SIGN THIS IF IT CONTAINS ANY BLANK SPACES.

AB954,16,8 d. YOU ARE ENTITLED TO AN EXACT COPY OF ANY AGREEMENT YOU SIGN.

AB954,16,16 (c) An exact copy of the prelease agreement shall be furnished by the prospective lessor to the prospective lessee at the time that the prospective lessee signs the agreement. The prospective lessee's copy of the agreement shall contain the signature of the prospective lessor identical with the signature on the original contract. No agreement shall be signed in blank except that a detailed description of the motor vehicle, including the serial number or other identifying marks of the vehicle, that is not available at the time of execution of such agreement may be omitted.

AB954,16,22 (d) A prospective lessor may cancel a prelease agreement that is contingent upon approval of the prospective lessee's credit by a sales finance company to whom the prospective lessor intends to assign the consumer lease, if the agreement contains a provision requiring the prospective lessor to give the prospective lessee written notice of such cancellation within 10 business days of execution of the agreement and the notice is given to the prospective lessee.

AB954,17,2 (e) No prelease agreement may contain a clause which, upon nonacceptance of the vehicle by the prospective lessee, would subject the prospective lessee to a penalty greater than 5% of the capitalized cost, as defined in s. 429.104 (5), of the vehicle.

AB954, s. 43 Section 43. 218.01 (7b) of the statutes, as affected by 1995 Wisconsin Act 27, is amended to read:

AB954,17,24 218.01 (7b) (title) Purchase or lease of motor vehicle by minor. No minor shall purchase or lease any motor vehicle unless the minor, at the time of purchase or lease, submits to the seller or lessor a statement verified before a person authorized to administer oaths and made and signed by either parent of the purchaser or lessee, if such parent has custody of the minor or, if neither parent has custody, then by the person having custody, setting forth that the purchaser or lessee has consent to purchase or lease the vehicle. The signature on the statement shall not impute any liability for the purchase price of the motor vehicle or for any payments under the consumer lease to the consenting person. The statement shall not adversely affect any other arrangement for the assumption of liability for the purchase price or any lease payments which the consenting person may make. The If a vehicle is purchased by a minor, the signed statement shall accompany the application for a certificate of title and shall be filed by the department of transportation with the application. Failure to obtain the consent or to forward it, together with the application for a certificate of title in the event of the purchase of a motor vehicle, shall not void the contract of sale or consumer lease of a motor vehicle in the hands of an innocent holder, without notice, for value and in the ordinary course of business. Any person who sells or leases a motor vehicle to a minor with knowledge of such fact without procuring such a statement may be fined not more than $200 or imprisoned not more than 6 months or both.

AB954, s. 44 Section 44. 218.01 (9) (b) of the statutes is amended to read:

AB954,18,4 218.01 (9) (b) Any retail buyer, lessee or prospective lessee suffering pecuniary loss because of a violation by a licensee of sub. (3) (a) 4., 5., 6., 8., 9., 10., 11., 18., 25. or 31. may recover damages for the loss in any court of competent jurisdiction together with costs, including reasonable attorney fees.

AB954, s. 45 Section 45. 344.51 (title) of the statutes is amended to read:

AB954,18,7 344.51 (title) Financial responsibility for domestic rented or leased vehicles.

AB954, s. 46 Section 46. 344.51 (1) of the statutes is amended to read:

AB954,18,17 344.51 (1) No person may for compensation rent or lease any motor vehicle to be operated by or with the consent of the person renting or leasing the vehicle unless there is filed with the department a good and sufficient bond or policy of insurance issued by an insurer authorized to do an automobile liability insurance or surety business in this state. The bond, policy or certificate shall provide that the insurer which issued it will be liable for damages caused by the negligent operation of the motor vehicle in the amounts set forth in s. 344.01 (2) (d). No person complying with this subsection is liable for damages caused by the negligent operation of the motor vehicle.

AB954, s. 47 Section 47. 344.51 (2) of the statutes is amended to read:

AB954,18,24 344.51 (2) Any person failing to comply with this section is directly liable for all damages caused by the negligence of the person operating such rented or leased vehicle to the extent that such liability could have been established if this section had been complied with, but such liability may not exceed the limits set forth in s. 344.01 (2) (d) with respect to the acceptable limits of liability when furnishing proof of financial responsibility.

AB954, s. 48 Section 48. 421.103 (2) of the statutes is amended to read:

AB954,19,3 421.103 (2) Unless terms used in chs. 421 to 427 are defined by particular provisions of chs. 421 to 427, they shall have the meaning given them in chs. 401 to 411 and 429, if they are defined in chs. 401 to 411 or 429.

AB954, s. 49 Section 49. 421.103 (5) of the statutes is created to read:

AB954,19,6 421.103 (5) Unless superseded by the particular provisions of ch. 429, chs. 421 to 427 apply to motor vehicle consumer leases.

AB954, s. 50 Section 50. 421.201 (5) of the statutes is amended to read:

AB954,19,17 421.201 (5) Subchapters I and II of ch. 425, relating to creditors' remedies, including applicable penalties, apply to actions or other proceedings brought in this state to enforce rights arising from consumer transactions or extortionate extensions of credit, wherever made, but conduct, action or proceedings to recover collateral or goods subject to a motor vehicle consumer lease shall be governed by the law of the state where the collateral is or goods subject to a motor vehicle consumer lease are located at the time of its recovery unless the collateral is or goods subject to a motor vehicle consumer lease are owned by a Wisconsin resident, who has removed it the collateral or goods from this state only for purposes of transportation to or use in the resident's employment or for temporary periods which do not exceed 15 days.