Amendment SSA2-SB486

SB486-SSA2,27,3 (f) Except as provided in par. (g), no action for damages may be maintained under this subsection upon a showing by a rental-purchase company against whom the alleged claim or violation is asserted that all of the following exist:

SB486-SSA2,27,5 1. All lessees similarly situated have been identified, or a reasonable effort to identify such other lessees has been made.

SB486-SSA2,27,7 2. All lessees identified under subd. 1. have been notified that, upon their request, the rental-purchase company shall make the appropriate remedy.

SB486-SSA2,27,9 3. The remedy requested by the lessees has been or in a reasonable time will be given.

SB486-SSA2,27,13 4. The rental-purchase company has ceased from engaging, or if immediate cessation is impossible under the circumstances, the rental-purchase company will, within a reasonable time, cease to engage in any acts on which the alleged claim is based.

SB486-SSA2,27,18 (g) An action for injunctive relief may be commenced without compliance with par. (c). Not less than 30 days after the commencement of an action for injunctive relief, and after compliance with par. (c), the lessee may amend his or her complaint without leave of court to include a request for damages. Paragraphs (e) and (f) shall apply if the complaint for injunctive relief is amended to request damages.

SB486-SSA2,27,24 (h) As soon as practicable after the commencement of an action brought as a class action, the court shall determine by order whether it is to be so maintained. An order may be conditional, and may be altered or amended before the decision on the merits. If the court determines that the action may not be maintained as a class action, it shall allow the action to proceed on behalf of the parties appearing in the action.

SB486-SSA2,28,4 (i) In any class action, the court shall direct to the members of the class the best notice practicable under the circumstances, including individual notice to all members who can be identified through reasonable effort. The notice shall inform each class member that:

SB486-SSA2,28,6 1. The court will exclude him or her from the class if he or she so requests by a specified date.

SB486-SSA2,28,8 2. The judgment, whether favorable or not, will include all members who do not request exclusion.

SB486-SSA2,28,10 3. Any member who does not request exclusion may enter an appearance through his or her counsel.

SB486-SSA2,28,16 (j) The judgment in an action maintained as a class action under this section, whether or not favorable to the class, shall include and describe those whom the court finds to be members of the class. The judgment in an action maintained as a class action, whether or not favorable to the class, shall include and specify or describe those to whom the notice provided in par. (i) was directed, and who have not requested exclusion, and whom the court finds to be members of the class.

SB486-SSA2,28,19 (k) When appropriate, an action may be brought or maintained as a class action with respect to particular issues, or a class may be divided into subclasses and each subclass treated as a class.

SB486-SSA2,28,23 (L) If judgment is for a class of plaintiffs, the court shall render judgment in favor of the administrator of the division of banking in the department of financial institutions and against the defendants for all costs of notice incurred by the administrator in such action.

SB486-SSA2,28,25 (m) In the conduct of actions to which this subsection applies, the court may make, alter, or amend orders that do any of the following:

SB486-SSA2,29,2 1. Determine the course of proceedings or prescribing measures to prevent undue repetition or complication in the presentation of evidence or argument.

SB486-SSA2,29,8 2. Require, for the protection of the members of the class or otherwise for the fair conduct of the action, that notice be given in such manner as the court may direct to some or all of the members of any step in the action, or of the proposed extent of the judgment, or of the opportunity of members to signify whether they consider the representation fair and adequate, to intervene and present claims or defenses, or otherwise to come into the action.

SB486-SSA2,29,9 3. Impose conditions on the representative parties or on intervenors.

SB486-SSA2,29,11 4. Require that the pleadings be amended to eliminate therefrom allegations as to representation of absent persons, and that the action proceed accordingly.

SB486-SSA2,29,12 5. Deal with similar procedural matters.

SB486-SSA2,29,16 (n) Once certified by the court under this subsection, a class action shall not be dismissed or compromised without the approval of the court, and notice of the proposed dismissal or compromise shall be given to all members of the class in such manner as the court directs.

SB486-SSA2,29,21 (o) A rental-purchase company shall not be liable in a class action for statutory damages computed under sub. (1) (b) relating to statutory damages, unless it is shown by a preponderance of the evidence that the violation was a willful and knowing violation of any provision of chs. 421 to 427 relating to rental-purchase agreements.

SB486-SSA2,30,2 (p) Reasonable attorneys' fees in a class action shall be determined by the value of the time reasonably expended by the attorney rather than by the amount of recovery on behalf of the class. A legal aid society or legal services program that represents a class shall be awarded a reasonable service fee in lieu of reasonable attorneys' fees, equal in amount to the amount of the attorneys' fees as measured by this subsection.

SB486-SSA2,30,5 (q) The administrator of the division of banking in the department of financial institutions, whether or not a party to an action, shall bear the costs of notice except that he or she may recover such costs from the defendant as provided in par. (L).

SB486-SSA2,30,12 (5) Defense; bona fide error. Notwithstanding any other section of this chapter, no lessee shall be entitled, in an individual or class action, to recover any penalties provided under sub. (1) (b), if the rental-purchase company violating any provision of chs. 421 to 427 relating to rental-purchase agreements shows by a preponderance of the evidence that the violation was not intentional, and that the violation resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adopted to avoid these errors.

SB486-SSA2,30,21 (6) Double liability limited. The liability of a rental-purchase company under this chapter is in lieu of any liability under the federal Consumer Credit Protection Act and s. 138.09. An action by a person alleging a violation under this chapter may not be maintained if a final judgment has been rendered for or against that person with respect to the same violation under the federal Consumer Credit Protection Act or s. 138.09. If a final judgment is entered against any rental-purchase company under this chapter and the federal Consumer Credit Protection Act or s. 138.09 for the same violation, the rental-purchase company has a cause of action for appropriate relief to the extent necessary to avoid double liability.

SB486-SSA2,30,25 (7) Necessary parties. If more than one lessee is a party to the same rental-purchase agreement, all of the lessees that are parties to the rental-purchase agreement shall be joined as plaintiffs in any action under sub. (1), and the lessees are entitled to only a single recovery under sub. (1).

SB486-SSA2,31,6 425.503 Limitation on actions. An action brought by a lessee under any provision of chs. 421 to 427 relating to rental-purchase agreements shall be commenced within one year after the date on which the alleged violation occurred, 2 years after the date on which the rental-purchase agreement was entered into, or one year after the date on which the last payment was made under the rental-purchase agreement, whichever is later.

SB486-SSA2,31,8 425.504 Venue. (1) Generally. The venue for a claim arising out of a rental-purchase agreement is any of the following counties:

SB486-SSA2,31,9 (a) Where the lessee resides or is personally served.

SB486-SSA2,31,10 (b) Where the rental property is located.

SB486-SSA2,31,13 (c) Where the lessee sought or acquired the rental property or signed the document evidencing his or her obligation under the terms of the rental-purchase agreement.

SB486-SSA2,31,18 (2) Change in venue. When it appears from the return of service of a summons or otherwise that the county in which an action is pending under sub. (1) is not a proper place of trial for the action, unless the defendant appears and waives the improper venue, the court shall transfer the action to any county that is a proper place of trial.

SB486-SSA2,31,21 (3) Multiple defendants. If there are several defendants in an action arising out of a rental-purchase agreement, and if venue is based on residence, venue may be in the county of residence of any of the defendants.

SB486-SSA2, s. 28 Section 28. 426.102 (intro.) of the statutes is renumbered 426.102 (1) (intro.).

SB486-SSA2, s. 29 Section 29. 426.102 (2) of the statutes is created to read:

SB486-SSA2,31,24 426.102 (2) Subchapters III and IV apply to rental-purchase agreements.

SB486-SSA2, s. 30 Section 30. Subchapter IV of chapter 426 [precedes 426.4005] of the statutes is created to read:

SB486-SSA2,32,3 chapter 426

SB486-SSA2,32,4 Subchapter IV

SB486-SSA2,32,7 Administration and licensing related to rental-purchase agreements

SB486-SSA2,32,8 426.4005 Definitions. In this subchapter:

SB486-SSA2,32,9 (1) "Administrator" means the administrator of the division.

SB486-SSA2,32,11 (2) "Division" means the division of banking in the department of financial institutions.

SB486-SSA2,32,13 426.401 License required. No person may operate as a rental-purchase company without a valid license issued by the division under this subchapter.

SB486-SSA2,32,18 426.402 Application for license; fees; bond. (1) Application. (a) An application for a license under this subchapter shall be made to the division, in writing, in the form prescribed by the division. In addition to any other information that may be required by the division, an application for a license under this subchapter shall include all of the following:

SB486-SSA2,32,19 1. If the applicant is an individual, the applicant's social security number.

SB486-SSA2,32,21 2. If the applicant is not an individual, the applicant's federal employer identification number.

SB486-SSA2,32,23 (b) The division may not disclose any information received under par. (a) 1. or 2. to any person except as follows:

SB486-SSA2,32,25 1. The division may disclose the information to the department of revenue for the sole purpose of requesting certifications under s. 73.0301.

SB486-SSA2,33,3 2. The division may disclose the information to the department of workforce development in accordance with a memorandum of understanding entered into under s. 49.857.

SB486-SSA2,33,6 (2) Application fees. At the time of applying to the division for a license under this subchapter, the applicant shall pay any applicable fee specified by the administrator by rule.

SB486-SSA2,33,9 (3) Bond. The division may require an applicant or licensee to file with the division and maintain in force a bond, in a form prescribed by and acceptable to the division, and in an amount determined by the division.

SB486-SSA2,33,18 426.403 Issuance or denial of license. (1) Investigation. Upon the filing of an application under s. 426.402 (1) and the payment of any applicable fee, the division shall perform an investigation. Except as provided in sub. (3), if the division finds that the character, general fitness, and financial responsibility of the applicant; the members of the applicant, if the applicant is a partnership, limited liability company, or association; and the officers and directors of the applicant, if the applicant is a corporation warrant the belief that the business will be operated in compliance with any provision of chs. 421 to 427 relating to rental-purchase agreements, the division shall issue a license to the applicant.

SB486-SSA2,33,24 (2) Denial; notice; hearing. Except as provided in sub. (3), the division may deny an application made under s. 426.402 (1) by providing written notice to the applicant stating the grounds for the denial. Except as provided in sub. (3), a person whose application is denied may request a hearing under s. 227.44 within 30 days after the date of denial. The division may appoint a hearing examiner under s. 227.46 to conduct the hearing.

SB486-SSA2,34,2 (3) Denial; child or family support or tax delinquency. The division may not issue a license under this chapter if any of the following applies:

SB486-SSA2,34,4 (a) The applicant fails to provide the information required under s. 426.402 (1) (a).

SB486-SSA2,34,9 (b) The department of revenue certifies under s. 73.0301 that the applicant is liable for delinquent taxes. An applicant for whom a license is not issued under this paragraph for delinquent taxes is entitled to a notice under s. 73.0301 (2) (b) 1. b. and a hearing under s. 73.0301 (5) (a) but is not entitled to any other notice or hearing under this section.

SB486-SSA2,34,19 (c) The applicant fails to comply, after appropriate notice, with a subpoena or warrant issued by the department of workforce development or a county child support agency under s. 59.53 (5) and related to paternity or child support proceedings or is delinquent in making court-ordered payments of child or family support, maintenance, birth expenses, medical expenses, or other expenses related to the support of a child or former spouse, as provided in a memorandum of understanding entered into under s. 49.857. An applicant whose application is denied under this paragraph for delinquent payments is entitled to a notice and hearing under s. 49.857, but is not entitled to any other notice or hearing under this section.

SB486-SSA2,34,23 426.404 Licenses; other business. (1) Licensed locations. A license issued under this subchapter shall specify the location at which the licensee is permitted to conduct business. A separate license shall be required for each place of business maintained by the licensee.

SB486-SSA2,34,24 (2) Assignment. A license issued under this subchapter is not assignable.

SB486-SSA2,35,2 (3) Posting. A licensee shall post its license in a conspicuous place at the location specified in the license.

SB486-SSA2,35,7 (4) Term of license; fee. Every license shall remain in force until suspended or revoked in accordance with this subchapter or surrendered by the licensee. Every licensee shall, on or before June 1 of each year, pay to the division an annual license fee specified by the division by rule and, if required by the division, provide a rider or endorsement to increase the amount of any bond required under s. 426.402 (3).

SB486-SSA2,35,12 (5) Other business prohibited. No licensee may conduct business as a rental-purchase company within any office, room, or place of business in which any other business is solicited or engaged in, unless the licensee is authorized to do so, in writing, by the division. For the purpose of this subsection, the division may not unreasonably withhold any such authorization.

SB486-SSA2,35,16 426.405 Revocation, suspension, and restriction of license. (1) Discretionary suspension or revocation. The division may issue an order suspending or revoking a license issued under this subchapter if the division finds that any of the following applies:

SB486-SSA2,35,19 (a) The licensee has violated any provision of chs. 421 to 427 relating to rental-purchase agreements, any rules promulgated under any such provision, or any lawful order of the division under s. 426.408 (1).

SB486-SSA2,35,22 (b) A fact or condition exists that, if it had existed at the time of the original application for the license, would have warranted the division's refusing to issue the license.

SB486-SSA2,35,24 (c) The licensee has made a material misstatement in an application for a license or in any information furnished to the division.

SB486-SSA2,36,2 (d) The licensee has failed to pay the annual license fee required under s. 426.404 (4) or has failed to maintain in effect any bond required under s. 426.402 (3).

SB486-SSA2,36,5 (e) The licensee has failed to provide any additional information, data, or records required by the division, within the time period prescribed under s. 426.406 (2).

SB486-SSA2,36,8 (f) The licensee has failed to pay any penalties due under s. 425.401, 425.502, or 426.301 within 30 days after receiving notice, by certified mail, that the penalties are due.

SB486-SSA2,36,20 (2) Mandatory restriction or suspension; child or family support. The division shall restrict or suspend a license issued under this subchapter if the division finds that the licensee is an individual who fails to comply, after appropriate notice, with a subpoena or warrant issued by the department of workforce development or a county child support agency under s. 59.53 (5) and related to paternity or child support proceedings or who is delinquent in making court-ordered payments of child or family support, maintenance, birth expenses, medical expenses, or other expenses related to the support of a child or former spouse, as provided in a memorandum of understanding entered into under s. 49.857. A licensee whose license is restricted or suspended under this subsection is entitled to a notice and hearing only as provided in a memorandum of understanding entered into under s. 49.857 and is not entitled to any other notice or hearing under this section.

SB486-SSA2,37,2 (3) Mandatory revocation; delinquent taxes. The division shall revoke a license issued under this subchapter if the department of revenue certifies under s. 73.0301 that the licensee is liable for delinquent taxes. A licensee whose license is revoked under this subsection for delinquent taxes is entitled to a notice under s. 73.0301 (2) (b) 1. b. and a hearing under s. 73.0301 (5) (a) but is not entitled to any other notice or hearing under this section.

SB486-SSA2,37,10 (4) Revocation and suspension procedure. Except as provided in subs. (2) and (3), no license shall be revoked or suspended except after a hearing under this subchapter. A complaint stating the grounds for suspension or revocation together with a notice of hearing shall be delivered to the licensee at least 5 days in advance of the hearing. In the event the licensee cannot be found, complaint and notice of hearing may be left at the place of business stated in the license and this shall be considered the equivalent of delivering the notice of hearing and complaint to the licensee.

SB486-SSA2,37,18 426.406 Modification of license. (1) Change in place of business. No licensee may change its place of business to another location without the prior approval of the division, which approval shall not be unreasonably withheld. A licensee shall provide the division with at least 15 days' prior written notice of a proposed change under this section and shall pay any applicable fees specified by the division by rule. Upon approval by the division of the new location, the division shall issue an amended license, specifying the date on which the amended license is issued and the new location.

SB486-SSA2,38,3 (2) Other changes. Except as provided in sub. (1), a licensee shall notify the division of any material change to the information provided in the licensee's original application for a license under this subchapter or provided in a previous notice of change filed by the licensee with the division under this subsection. A licensee shall provide the notice required under this subsection within 10 days after the change. The licensee shall provide any additional information, data, and records about the change to the division within 20 days after the division requests the information, data, or records. The division shall determine the cost of investigating and processing the change. The licensee shall pay the division's cost within 30 days after the division demands payment.

SB486-SSA2,38,7 (3) Division approval of other changes. Any change that is subject to the notice requirement under sub. (2) is subject to the approval of the division. In reviewing the change, the division shall apply the same criteria as the criteria for approval of an original license application.

SB486-SSA2,38,12 426.407 Annual report; records. (1) Annual report. On or before March 31 of each year, a licensee shall file a report with the division giving such reasonable and relevant information as the division may require concerning the business and operations conducted by the licensee. The licensee shall make the report in the form prescribed by the division.

SB486-SSA2,38,17 (2) Books and records. A licensee shall keep such books and records in the licensed location as, in the opinion of the division, will enable the division to enforce any provision of chs. 421 to 427 relating to rental-purchase agreements. Every licensee shall preserve its records of a rental-purchase agreement for at least 2 years after making any final entry with respect to the rental-purchase agreement.

SB486-SSA2,38,21 426.408 Powers and duties of division; administration. (1) Orders. The division may issue any general order or special order in execution of or supplementary to any provision in chs. 421 to 427 relating to rental-purchase agreements but any such order may not conflict with any such provision.

SB486-SSA2,39,10 (2) Investigations and examinations. For the purpose of discovering violations of any provision in chs. 421 to 427 relating to rental-purchase agreements, the division may investigate or examine the business of a licensee transacted under any provision of chs. 421 to 427 relating to rental-purchase agreements. The place of business, books of accounts, papers, records, safes, and vaults of the licensee shall be open to the division for the purpose of an investigation or examination, and the division has authority to examine under oath all persons whose testimony is required for an investigation or examination. The division shall determine the cost of an investigation or examination. The licensee shall pay the cost of an investigation or examination. The licensee shall pay the cost of any hearing held for the purpose of this subsection, including witness fees, unless the division or a court finds that the licensee has not violated this subchapter. The licensee shall pay all costs owing under this subsection within 30 days after the division demands payment. The state may maintain an action for the recovery of any costs owing under this subsection.

SB486-SSA2,39,14 (3) Verified complaint; mandatory investigation. If 5 or more persons file a verified complaint with the administrator alleging that a rental-purchase company has engaged in an act which is subject to action by the administrator, he or she shall immediately commence an investigation pursuant to sub. (2).

SB486-SSA2,39,16 (4) Rules. The administrator may promulgate rules for the administration of any provision in chs. 421 to 427 relating to rental-purchase agreements.

SB486-SSA2,39,19 (5) Testimonial powers and powers to secure evidence. The division has the same power to conduct hearings, take testimony, and secure evidence as is provided to the division in ss. 217.17 and 217.18.

SB486-SSA2,39,24 (6) Enforcement. The division may investigate any provision in chs. 421 to 427 relating to rental-purchase agreements or any lawful orders issued under sub. (1) to determine if any such provision or lawful order is being violated. The division may report any such violations to the attorney general or the district attorney of the proper county for prosecution.

SB486-SSA2, s. 31 Section 31. 427.102 of the statutes is amended to read:

SB486-SSA2,40,4 427.102 Scope. This chapter applies to conduct and practices in connection with the collection of obligations arising from consumer transactions, including transactions that are primarily for an agricultural purpose, and to transactions in connection with rental-purchase agreements.

SB486-SSA2, s. 32 Section 32. 427.103 (intro.) of the statutes is created to read:

SB486-SSA2,40,6 427.103 (intro.) In this chapter: