LRBs0402/2
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2003 - 2004 LEGISLATURE
SENATE SUBSTITUTE AMENDMENT 1,
TO 2003 SENATE BILL 486
March 2, 2004 - Offered by Senator Brown.
SB486-SSA1,1,10 1An Act to renumber 426.102 (intro.); to amend 220.02 (2) (b), 220.02 (3),
2421.301 (7) (intro.), 421.301 (9), 421.301 (10), 421.301 (11), 421.301 (12),
3421.301 (13), 421.301 (17), 421.301 (20) (intro.), 421.301 (21), 421.301 (25),
4421.301 (34), 421.301 (39), 421.301 (40), 423.102, 423.301, 423.302, 425.305
5and 427.102; to repeal and recreate 422.102; and to create 409.109 (4) (n),
6421.201 (11), 421.301 (37t), 421.301 (37u), 421.301 (37v), subchapter VI of
7chapter 422, subchapter V of chapter 425, 426.102 (2), subchapter IV of chapter
8426 [precedes 426.401], 427.103 (intro.), 427.103 (1e), 427.103 (1r) and 427.103
9(4) of the statutes; relating to: regulation of rental-purchase agreements
10under the Wisconsin Consumer Act.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB486-SSA1, s. 1 11Section 1. 220.02 (2) (b) of the statutes is amended to read:
SB486-SSA1,2,4
1220.02 (2) (b) The lending of money under s. 138.09 or those relating to finance
2companies, motor vehicle dealers, adjustment service companies, community
3currency exchanges, rental-purchase companies registered under s. 426.201, and
4collection agencies under ch. 218.
SB486-SSA1, s. 2 5Section 2. 220.02 (3) of the statutes, as affected by 2003 Wisconsin Act 33, is
6amended to read:
SB486-SSA1,2,157 220.02 (3) It is the intent of sub. (2) to give the division jurisdiction to enforce
8and carry out all laws relating to banks or banking in this state, including those
9relating to state banks, savings banks, savings and loan associations, and trust
10company banks, and also all laws relating to small loan companies or other loan
11companies or agencies, finance companies, motor vehicle dealers, adjustment service
12companies, community currency exchanges, rental-purchase companies registered
13under s. 426.201,
and collection agencies and those relating to sellers of checks under
14ch. 217, whether doing business as corporations, individuals, or otherwise, but to
15exclude laws relating to credit unions.
SB486-SSA1, s. 3 16Section 3. 409.109 (4) (n) of the statutes is created to read:
SB486-SSA1,2,1817 409.109 (4) (n) The transfer of an interest under a rental-purchase agreement,
18as defined in s. 421.301 (37u).
SB486-SSA1, s. 4 19Section 4. 421.201 (11) of the statutes is created to read:
SB486-SSA1,2,2120 421.201 (11) (a) A rental-purchase agreement is entered into in this state if any
21of the following applies:
SB486-SSA1,2,2422 1. A writing signed by a lessee and evidencing the obligation under the rental-
23purchase agreement or an offer of a lessee is received by a rental-purchase company
24in this state.
SB486-SSA1,3,3
12. The rental-purchase company induces a lessee who is a resident of this state
2to enter into the rental-purchase agreement by face-to-face solicitation or by mail
3or telephone solicitation directed to the particular lessee in this state.
SB486-SSA1,3,74 (b) If a rental-purchase agreement is made or modified in another state with
5a lessee who is a resident of this state at the time that the agreement or modification
6is made, the following apply as though the agreement or modification occurred in this
7state:
SB486-SSA1,3,98 1. A rental-purchase company, or an assignee of its rights, may collect through
9actions or other proceedings charges only to the extent permitted under this chapter.
SB486-SSA1,3,1110 2. A rental-purchase company may not enforce any right against a lessee if the
11enforcement of that right would violate s. 422.604.
SB486-SSA1,3,1512 (c) Except as provided in pars. (a) and (b), a rental-purchase agreement made
13or modified in another state with an individual who was not a resident of this state
14at the time that the agreement or modification was made, is valid and enforceable
15under the laws of the state applicable to the transaction.
SB486-SSA1,3,2016 (d) For purposes of rental-purchase agreements, the residence of a lessee is the
17address given by the lessee as his or her residence in any writing signed by the lessee
18in connection with a rental-purchase agreement. The given address is presumed to
19be unchanged until the rental-purchase company knows or has reason to know of a
20new or different address.
SB486-SSA1, s. 5 21Section 5. 421.301 (7) (intro.) of the statutes is amended to read:
SB486-SSA1,3,2422 421.301 (7) (intro.) "Cash price" means in chs. 421 to 427, other than subch. VI
23of ch. 422,
the price at which property or services are offered, in the ordinary course
24of business, for sale for cash, and may include:
SB486-SSA1, s. 6 25Section 6. 421.301 (9) of the statutes is amended to read:
SB486-SSA1,4,10
1421.301 (9) "Consumer credit sale" means a sale of goods, services or an
2interest in land to a customer on credit where the debt is payable in installments or
3a finance charge is imposed and includes any agreement in the form of a bailment
4of goods or lease of goods or real property if the bailee or lessee pays or agrees to pay
5as compensation for use a sum substantially equivalent to or in excess of the
6aggregate value of the goods or real property involved and it is agreed that the bailee
7or lessee will become, or for no other or a nominal consideration has the option to
8become, the owner of the goods or real property upon full compliance with the terms
9of the agreement. "Consumer credit sale" does not include a rental-purchase
10agreement.
SB486-SSA1, s. 7 11Section 7. 421.301 (10) of the statutes is amended to read:
SB486-SSA1,4,1912 421.301 (10) "Consumer credit transaction" means a consumer transaction
13between a merchant and a customer in which real or personal property, services or
14money is acquired on credit and the customer's obligation is payable in installments
15or for which credit a finance charge is or may be imposed, whether such transaction
16is pursuant to an open-end credit plan or is a transaction involving other than
17open-end credit. The term includes consumer credit sales, consumer loans,
18consumer leases and transactions pursuant to open-end credit plans. "Consumer
19credit transaction" does not include a rental-purchase agreement.
SB486-SSA1, s. 8 20Section 8. 421.301 (11) of the statutes is amended to read:
SB486-SSA1,4,2321 421.301 (11) "Consumer lease" means a lease of goods which a merchant makes
22to a customer for a term exceeding 4 months, but does not include a rental-purchase
23agreement
.
SB486-SSA1, s. 9 24Section 9. 421.301 (12) of the statutes is amended to read:
SB486-SSA1,5,5
1421.301 (12) "Consumer loan" means a loan made by a lender to a customer
2which is payable in installments or for which a finance charge is or may be imposed,
3and includes transactions pursuant to an open-end credit plan other than a seller
4credit card, but does not include a transaction relating to a rental-purchase
5agreement
.
SB486-SSA1, s. 10 6Section 10. 421.301 (13) of the statutes is amended to read:
SB486-SSA1,5,97 421.301 (13) "Consumer transaction" means a transaction in which one or
8more of the parties is a customer for purposes of that transaction , but does not
9include a transaction relating to a rental-purchase agreement
.
SB486-SSA1, s. 11 10Section 11. 421.301 (17) of the statutes is amended to read:
SB486-SSA1,5,1711 421.301 (17) "Customer" means a person other than an organization (s.
12421.301 (28)) who seeks or acquires real or personal property, services, money or
13credit for personal, family or household purposes or, for purposes of ch. 427 only, for
14agricultural purposes, but does not include a lessee to a rental-purchase agreement.
15A person other than a customer may agree to be governed by chs. 421 to 427 with
16respect to all aspects of a transaction and in such event such person shall be deemed
17a customer for all purposes of chs. 421 to 427 with respect to such transaction.
SB486-SSA1, s. 12 18Section 12. 421.301 (20) (intro.) of the statutes is amended to read:
SB486-SSA1,6,219 421.301 (20) (intro.) "Finance charge" means the sum of all charges, payable
20directly or indirectly by the customer as an incident to or as a condition of the
21extension of credit, whether paid or payable by the customer, the creditor or any other
22person on behalf of the customer to the creditor or to a 3rd party unless the creditor
23had no notice or knowledge of the charges paid or payable to the 3rd party. The term
24does not include any charge with respect to a motor vehicle consumer lease or to a
25rental-purchase agreement
. The term includes the following types of charges to the

1extent they are not permitted additional charges under s. 422.202, delinquency
2charges under s. 422.203 or deferral charges under s. 422.204:
SB486-SSA1, s. 13 3Section 13. 421.301 (21) of the statutes is amended to read:
SB486-SSA1,6,74 421.301 (21) "Goods" has the meaning given in s. 409.102 (1) (ks) and includes
5goods not in existence at the time the transaction is entered into and goods which are
6or are to become fixtures, but does not include any goods under a rental-purchase
7agreement
.
SB486-SSA1, s. 14 8Section 14. 421.301 (25) of the statutes is amended to read:
SB486-SSA1,6,189 421.301 (25) "Merchant" means a person who regularly advertises, distributes,
10offers, supplies or deals in real or personal property, services, money or credit in a
11manner which directly or indirectly results in or is intended or designed to result in,
12lead to or induce a consumer transaction. The term includes but is not limited to a
13seller, lessor, manufacturer, creditor, arranger of credit and any assignee of or
14successor to such person. The term also includes a person who by his or her
15occupation holds himself or herself out as having knowledge or skill peculiar to such
16practices or to whom such knowledge or skill may be attributed by his or her
17employment as an agent, broker or other intermediary. "Merchant" does not include
18a rental-purchase company.
SB486-SSA1, s. 15 19Section 15. 421.301 (34) of the statutes is amended to read:
SB486-SSA1,6,2120 421.301 (34) "Personal property" includes but is not limited to goods, but does
21not include rental property
.
SB486-SSA1, s. 16 22Section 16. 421.301 (37t) of the statutes is created to read:
SB486-SSA1,6,2423 421.301 (37t) "Rental property" means property rented under a
24rental-purchase agreement.
SB486-SSA1, s. 17 25Section 17. 421.301 (37u) of the statutes is created to read:
SB486-SSA1,7,3
1421.301 (37u) "Rental-purchase agreement" means an agreement between a
2rental-purchase company and a lessee for the use of rental property if all of the
3following apply:
SB486-SSA1,7,54 (a) The rental property is to be used primarily for personal, family, or household
5purposes.
SB486-SSA1,7,76 (b) The agreement has an initial term of 4 months or less and is automatically
7renewable with each payment after the initial term.
SB486-SSA1,7,98 (c) The agreement does not obligate or require the lessee to renew the
9agreement beyond the initial term.
SB486-SSA1,7,1110 (d) The agreement permits, but does not obligate, the lessee to acquire
11ownership of the rental property.
SB486-SSA1, s. 18 12Section 18. 421.301 (37v) of the statutes is created to read:
SB486-SSA1,7,1513 421.301 (37v) "Rental-purchase company" means a person engaged in the
14business of entering into rental-purchase agreements in this state or acquiring or
15servicing rental-purchase agreements that are entered into in this state.
SB486-SSA1, s. 19 16Section 19. 421.301 (39) of the statutes is amended to read:
SB486-SSA1,7,1917 421.301 (39) "Sale of services" means furnishing or agreeing to furnish services
18and includes arranging to have services furnished by another, but does not include
19any services relating to a rental-purchase agreement
.
SB486-SSA1, s. 20 20Section 20. 421.301 (40) of the statutes is amended to read:
SB486-SSA1,7,2521 421.301 (40) "Security interest" means a real property mortgage, deed of trust,
22seller's interest in real estate under a land contract, any interest in property which
23secures payment or performance of an obligation under ch. 409 or any other
24consensual or confessed lien whether or not recorded, but does not include an interest
25in any property relating to a rental-purchase agreement
.
SB486-SSA1, s. 21
1Section 21. 422.102 of the statutes is repealed and recreated to read:
SB486-SSA1,8,2 2422.102 Scope. (1) Subchapters I to V apply to consumer credit transactions.
SB486-SSA1,8,3 3(2) Subchapter VI applies to rental-purchase agreements.
SB486-SSA1, s. 22 4Section 22. Subchapter VI of chapter 422 of the statutes [precedes 422.601]
5is created to read:
SB486-SSA1,8,66 CHAPTER 422
SB486-SSA1,8,77 consumer credit transactionS
SB486-SSA1,8,88 Subchapter VI
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