Amendment SSA1-SB486

LRBs0402/2

RAC:kjf&jd:pg

2003 - 2004 LEGISLATURE

SENATE SUBSTITUTE AMENDMENT 1, TO 2003 SENATE BILL 486

March 2, 2004 - Offered by Senator Brown.

SB486-SSA1,1,10 An Act to renumber 426.102 (intro.); to amend 220.02 (2) (b), 220.02 (3), 421.301 (7) (intro.), 421.301 (9), 421.301 (10), 421.301 (11), 421.301 (12), 421.301 (13), 421.301 (17), 421.301 (20) (intro.), 421.301 (21), 421.301 (25), 421.301 (34), 421.301 (39), 421.301 (40), 423.102, 423.301, 423.302, 425.305 and 427.102; to repeal and recreate 422.102; and to create 409.109 (4) (n), 421.201 (11), 421.301 (37t), 421.301 (37u), 421.301 (37v), subchapter VI of chapter 422, subchapter V of chapter 425, 426.102 (2), subchapter IV of chapter 426 [precedes 426.401], 427.103 (intro.), 427.103 (1e), 427.103 (1r) and 427.103 (4) of the statutes; relating to: regulation of rental-purchase agreements under the Wisconsin Consumer Act.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

SB486-SSA1, s. 1 Section 1. 220.02 (2) (b) of the statutes is amended to read:

SB486-SSA1,2,4 220.02 (2) (b) The lending of money under s. 138.09 or those relating to finance companies, motor vehicle dealers, adjustment service companies, community currency exchanges, rental-purchase companies registered under s. 426.201, and collection agencies under ch. 218.

SB486-SSA1, s. 2 Section 2. 220.02 (3) of the statutes, as affected by 2003 Wisconsin Act 33, is amended to read:

SB486-SSA1,2,15 220.02 (3) It is the intent of sub. (2) to give the division jurisdiction to enforce and carry out all laws relating to banks or banking in this state, including those relating to state banks, savings banks, savings and loan associations, and trust company banks, and also all laws relating to small loan companies or other loan companies or agencies, finance companies, motor vehicle dealers, adjustment service companies, community currency exchanges, rental-purchase companies registered under s. 426.201, and collection agencies and those relating to sellers of checks under ch. 217, whether doing business as corporations, individuals, or otherwise, but to exclude laws relating to credit unions.

SB486-SSA1, s. 3 Section 3. 409.109 (4) (n) of the statutes is created to read:

SB486-SSA1,2,18 409.109 (4) (n) The transfer of an interest under a rental-purchase agreement, as defined in s. 421.301 (37u).

SB486-SSA1, s. 4 Section 4. 421.201 (11) of the statutes is created to read:

SB486-SSA1,2,21 421.201 (11) (a) A rental-purchase agreement is entered into in this state if any of the following applies:

SB486-SSA1,2,24 1. A writing signed by a lessee and evidencing the obligation under the rental- purchase agreement or an offer of a lessee is received by a rental-purchase company in this state.

SB486-SSA1,3,3 2. The rental-purchase company induces a lessee who is a resident of this state to enter into the rental-purchase agreement by face-to-face solicitation or by mail or telephone solicitation directed to the particular lessee in this state.

SB486-SSA1,3,7 (b) If a rental-purchase agreement is made or modified in another state with a lessee who is a resident of this state at the time that the agreement or modification is made, the following apply as though the agreement or modification occurred in this state:

SB486-SSA1,3,9 1. A rental-purchase company, or an assignee of its rights, may collect through actions or other proceedings charges only to the extent permitted under this chapter.

SB486-SSA1,3,11 2. A rental-purchase company may not enforce any right against a lessee if the enforcement of that right would violate s. 422.604.

SB486-SSA1,3,15 (c) Except as provided in pars. (a) and (b), a rental-purchase agreement made or modified in another state with an individual who was not a resident of this state at the time that the agreement or modification was made, is valid and enforceable under the laws of the state applicable to the transaction.

SB486-SSA1,3,20 (d) For purposes of rental-purchase agreements, the residence of a lessee is the address given by the lessee as his or her residence in any writing signed by the lessee in connection with a rental-purchase agreement. The given address is presumed to be unchanged until the rental-purchase company knows or has reason to know of a new or different address.

SB486-SSA1, s. 5 Section 5. 421.301 (7) (intro.) of the statutes is amended to read:

SB486-SSA1,3,24 421.301 (7) (intro.) "Cash price" means in chs. 421 to 427, other than subch. VI of ch. 422, the price at which property or services are offered, in the ordinary course of business, for sale for cash, and may include:

SB486-SSA1, s. 6 Section 6. 421.301 (9) of the statutes is amended to read:

SB486-SSA1,4,10 421.301 (9) "Consumer credit sale" means a sale of goods, services or an interest in land to a customer on credit where the debt is payable in installments or a finance charge is imposed and includes any agreement in the form of a bailment of goods or lease of goods or real property if the bailee or lessee pays or agrees to pay as compensation for use a sum substantially equivalent to or in excess of the aggregate value of the goods or real property involved and it is agreed that the bailee or lessee will become, or for no other or a nominal consideration has the option to become, the owner of the goods or real property upon full compliance with the terms of the agreement. "Consumer credit sale" does not include a rental-purchase agreement.

SB486-SSA1, s. 7 Section 7. 421.301 (10) of the statutes is amended to read:

SB486-SSA1,4,19 421.301 (10) "Consumer credit transaction" means a consumer transaction between a merchant and a customer in which real or personal property, services or money is acquired on credit and the customer's obligation is payable in installments or for which credit a finance charge is or may be imposed, whether such transaction is pursuant to an open-end credit plan or is a transaction involving other than open-end credit. The term includes consumer credit sales, consumer loans, consumer leases and transactions pursuant to open-end credit plans. "Consumer credit transaction" does not include a rental-purchase agreement.

SB486-SSA1, s. 8 Section 8. 421.301 (11) of the statutes is amended to read:

SB486-SSA1,4,23 421.301 (11) "Consumer lease" means a lease of goods which a merchant makes to a customer for a term exceeding 4 months, but does not include a rental-purchase agreement.

SB486-SSA1, s. 9 Section 9. 421.301 (12) of the statutes is amended to read:

SB486-SSA1,5,5 421.301 (12) "Consumer loan" means a loan made by a lender to a customer which is payable in installments or for which a finance charge is or may be imposed, and includes transactions pursuant to an open-end credit plan other than a seller credit card, but does not include a transaction relating to a rental-purchase agreement.

SB486-SSA1, s. 10 Section 10. 421.301 (13) of the statutes is amended to read:

SB486-SSA1,5,9 421.301 (13) "Consumer transaction" means a transaction in which one or more of the parties is a customer for purposes of that transaction , but does not include a transaction relating to a rental-purchase agreement.

SB486-SSA1, s. 11 Section 11. 421.301 (17) of the statutes is amended to read:

SB486-SSA1,5,17 421.301 (17) "Customer" means a person other than an organization (s. 421.301 (28)) who seeks or acquires real or personal property, services, money or credit for personal, family or household purposes or, for purposes of ch. 427 only, for agricultural purposes, but does not include a lessee to a rental-purchase agreement. A person other than a customer may agree to be governed by chs. 421 to 427 with respect to all aspects of a transaction and in such event such person shall be deemed a customer for all purposes of chs. 421 to 427 with respect to such transaction.

SB486-SSA1, s. 12 Section 12. 421.301 (20) (intro.) of the statutes is amended to read:

SB486-SSA1,6,2 421.301 (20) (intro.) "Finance charge" means the sum of all charges, payable directly or indirectly by the customer as an incident to or as a condition of the extension of credit, whether paid or payable by the customer, the creditor or any other person on behalf of the customer to the creditor or to a 3rd party unless the creditor had no notice or knowledge of the charges paid or payable to the 3rd party. The term does not include any charge with respect to a motor vehicle consumer lease or to a rental-purchase agreement. The term includes the following types of charges to the extent they are not permitted additional charges under s. 422.202, delinquency charges under s. 422.203 or deferral charges under s. 422.204:

SB486-SSA1, s. 13 Section 13. 421.301 (21) of the statutes is amended to read:

SB486-SSA1,6,7 421.301 (21) "Goods" has the meaning given in s. 409.102 (1) (ks) and includes goods not in existence at the time the transaction is entered into and goods which are or are to become fixtures, but does not include any goods under a rental-purchase agreement.

SB486-SSA1, s. 14 Section 14. 421.301 (25) of the statutes is amended to read:

SB486-SSA1,6,18 421.301 (25) "Merchant" means a person who regularly advertises, distributes, offers, supplies or deals in real or personal property, services, money or credit in a manner which directly or indirectly results in or is intended or designed to result in, lead to or induce a consumer transaction. The term includes but is not limited to a seller, lessor, manufacturer, creditor, arranger of credit and any assignee of or successor to such person. The term also includes a person who by his or her occupation holds himself or herself out as having knowledge or skill peculiar to such practices or to whom such knowledge or skill may be attributed by his or her employment as an agent, broker or other intermediary. "Merchant" does not include a rental-purchase company.

SB486-SSA1, s. 15 Section 15. 421.301 (34) of the statutes is amended to read:

SB486-SSA1,6,21 421.301 (34) "Personal property" includes but is not limited to goods, but does not include rental property.

SB486-SSA1, s. 16 Section 16. 421.301 (37t) of the statutes is created to read:

SB486-SSA1,6,24 421.301 (37t) "Rental property" means property rented under a rental-purchase agreement.

SB486-SSA1, s. 17 Section 17. 421.301 (37u) of the statutes is created to read:

SB486-SSA1,7,3 421.301 (37u) "Rental-purchase agreement" means an agreement between a rental-purchase company and a lessee for the use of rental property if all of the following apply:

SB486-SSA1,7,5 (a) The rental property is to be used primarily for personal, family, or household purposes.

SB486-SSA1,7,7 (b) The agreement has an initial term of 4 months or less and is automatically renewable with each payment after the initial term.

SB486-SSA1,7,9 (c) The agreement does not obligate or require the lessee to renew the agreement beyond the initial term.

SB486-SSA1,7,11 (d) The agreement permits, but does not obligate, the lessee to acquire ownership of the rental property.

SB486-SSA1, s. 18 Section 18. 421.301 (37v) of the statutes is created to read:

SB486-SSA1,7,15 421.301 (37v) "Rental-purchase company" means a person engaged in the business of entering into rental-purchase agreements in this state or acquiring or servicing rental-purchase agreements that are entered into in this state.

SB486-SSA1, s. 19 Section 19. 421.301 (39) of the statutes is amended to read:

SB486-SSA1,7,19 421.301 (39) "Sale of services" means furnishing or agreeing to furnish services and includes arranging to have services furnished by another, but does not include any services relating to a rental-purchase agreement.

SB486-SSA1, s. 20 Section 20. 421.301 (40) of the statutes is amended to read:

SB486-SSA1,7,25 421.301 (40) "Security interest" means a real property mortgage, deed of trust, seller's interest in real estate under a land contract, any interest in property which secures payment or performance of an obligation under ch. 409 or any other consensual or confessed lien whether or not recorded, but does not include an interest in any property relating to a rental-purchase agreement.

SB486-SSA1, s. 21 Section 21. 422.102 of the statutes is repealed and recreated to read:

SB486-SSA1,8,2 422.102 Scope. (1) Subchapters I to V apply to consumer credit transactions.

SB486-SSA1,8,3 (2) Subchapter VI applies to rental-purchase agreements.

SB486-SSA1, s. 22 Section 22. Subchapter VI of chapter 422 of the statutes [precedes 422.601] is created to read:

SB486-SSA1,8,6 CHAPTER 422

SB486-SSA1,8,7 consumer credit transactionS

SB486-SSA1,8,8 Subchapter VI