AB218: Bill Text

AB218,26,12 3. The names of its principal officers.

AB218,26,16 (h) Subject to par. (i), if a consumer who has consented to electronic communication in the manner provided by 15 USC 7001 withdraws consent as provided in the federal act, a provider may terminate its agreement with the consumer.

AB218,26,22 (i) If a provider wishes to terminate an agreement with a consumer pursuant to par. (h), it shall notify the consumer that it will terminate the agreement unless the consumer, within 30 days after receiving the notification, consents to electronic communication in the manner provided in 15 USC 7001 (c). If the consumer consents, the provider may terminate the agreement only as permitted by sub. (18) (a) 6. g.

AB218,26,24 (18) Form and contents of agreement. (a) An agreement must satisfy all of the following:

AB218,26,25 1. Be in a record.

AB218,27,1 2. Be dated and signed by the provider and the individual.

AB218,27,3 3. Include the name of the individual and the address where the individual resides.

AB218,27,4 4. Include the name, business address, and telephone number of the provider.

AB218,27,5 5. Be delivered to the individual immediately upon formation of the agreement.

AB218,27,6 6. Disclose all of the following:

AB218,27,7 a. The services to be provided.

AB218,27,9 b. The amount, or method of determining the amount, of all fees, individually itemized, to be paid by the individual.

AB218,27,12 c. The schedule of payments to be made by or on behalf of the individual, including the amount of each payment, the date on which each payment is due, and an estimate of the date of the final payment.

AB218,27,17 d. If a plan provides for regular periodic payments to creditors, the plan must disclose each creditor of the individual to which payment will be made, the amount owed to each creditor, and any concessions the provider reasonably believes each creditor will offer; and the schedule of expected payments to each creditor, including the amount of each payment and the date on which it will be made.

AB218,27,19 e. Each creditor that the provider believes will not participate in the plan and to which the provider will not direct payment.

AB218,27,20 f. How the provider will comply with its obligations under sub. (26) (a).

AB218,27,22 g. That the provider may terminate the agreement for good cause, upon return of unexpended money of the individual.

AB218,27,23 h. That the individual may cancel the agreement as provided in sub. (19).

AB218,27,25 i. That the individual may contact the division with any questions or complaints regarding the provider.

AB218,28,2 j. The address, telephone number, and Internet address or Web site of the division.

AB218,28,5 (b) For purposes of par. (a) 5., delivery of an electronic record occurs when it is made available in a format in which the individual may retrieve, save, and print it and the individual is notified that it is available.

AB218,28,8 (c) If the division supplies the provider with any information required under par. (a) 6. j., the provider may comply with that requirement only by disclosing the information supplied by the division.

AB218,28,9 (d) An agreement must provide all of the following:

AB218,28,12 1. That the individual has a right to terminate the agreement at any time, without penalty or obligation, by giving the provider written or electronic notice, in which event all of the following apply:

AB218,28,15 a. The provider will refund all unexpended money that the provider or its agent has received from or on behalf of the individual for the reduction or satisfaction of the individual's debt.

AB218,28,18 b. With respect to an agreement that contemplates that creditors will settle debts for less than the principal amount of debt, the provider will refund 65 percent of any portion of the set-up fee that has not been credited against the settlement fee.

AB218,28,20 c. All powers of attorney granted by the individual to the provider are revoked and ineffective.

AB218,28,23 2. That the individual authorizes any financial institution in which the provider or its agent has established a trust account to disclose to the division any financial records relating to the trust account.

AB218,29,3 3. That the provider will notify the individual within 5 days after learning of a creditor's decision to reject or withdraw from a plan and that this notice will include all of the following:

AB218,29,4 a. The identity of the creditor.

AB218,29,5 b. The right of the individual to modify or terminate the agreement.

AB218,29,12 (e) An agreement may confer on a provider a power of attorney to settle the individual's debt for no more than 50 percent of the principal amount of the debt. An agreement may not confer a power of attorney to settle a debt for more than 50 percent of that amount, but may confer a power of attorney to negotiate with creditors of the individual on behalf of the individual. An agreement must provide that the provider will obtain the assent of the individual after a creditor has assented to a settlement for more than 50 percent of the principal amount of the debt.

AB218,29,13 (f) An agreement may not do any of the following:

AB218,29,15 1. Provide for application of the law of any jurisdiction other than the United States and this state.

AB218,29,19 2. Except as permitted by 9 USC 2 or ch. 788, contain a provision that modifies or limits otherwise available forums or procedural rights, including the right to trial by jury, that are generally available to the individual under law other than this section.

AB218,29,21 3. Contain a provision that restricts the individual's remedies under this section or law other than this section.

AB218,29,22 4. Contain a provision that does any of the following:

AB218,29,24 a. Limits or releases the liability of any person for not performing the agreement or for violating this section.

AB218,30,2 b. Indemnifies any person for liability arising under the agreement or this section.

AB218,30,5 (g) All rights and obligations specified in par. (d) and sub. (19) exist even if not provided in the agreement. A provision in an agreement which violates par. (d), (e), or (f) is void.

AB218,30,11 (19) Cancellation of agreement; waiver. (a) An individual may cancel an agreement before midnight of the 3rd business day after the individual assents to it, unless the agreement does not comply with par. (b) or sub. (18) or (27), in which event the individual may cancel the agreement within 30 days after the individual assents to it. To exercise the right to cancel, the individual must give notice in a record to the provider. Notice by mail is given when mailed.

AB218,30,13 (b) An agreement must be accompanied by a form that contains all of the following in bold-face type, surrounded by bold black lines:

AB218,30,14 Notice of Right to Cancel

AB218,30,17 You may cancel this agreement, without any penalty or obligation, at any time before midnight of the 3rd business day that begins the day after you agree to it by electronic communication or by signing it.

AB218,30,18 To cancel this agreement during this period, send an e-mail to:

AB218,30,19 ...........................................................

AB218,30,20   E-mail address of provider

AB218,30,21 or mail or deliver a signed, dated copy of this notice, or any other written notice to:

AB218,30,22 ........................................................... at ..........................................................

AB218,30,23     Name of provider            Address of provider

AB218,30,24 before midnight on: ............................................................

AB218,30,25                  Date

AB218,31,2 If you cancel this agreement within the 3-day period, we will refund all money you already have paid us.

AB218,31,4 You also may terminate this agreement at any later time, but we are not required to refund fees you have paid us.

AB218,31,5 I cancel this agreement,

AB218,31,6 .......................................................................

AB218,31,7      Print your name

AB218,31,8 .......................................................................

AB218,31,9       Signature

AB218,31,10 .......................................................................

AB218,31,11        Date

AB218,31,18 (c) If a personal financial emergency necessitates the disbursement of an individual's money to one or more of the individual's creditors before the expiration of 3 days after an agreement is signed, an individual may waive the right to cancel. To waive the right, the individual must send or deliver a signed, dated statement in the individual's own words describing the circumstances that necessitate a waiver. The waiver must explicitly waive the right to cancel. A waiver by means of a standard-form record is void.

AB218,31,23 (20) Required language. Unless the division, by rule, provides otherwise, the disclosures and documents required by this section must be in English. If a provider communicates with an individual primarily in a language other than English, the provider must furnish a translation into the other language of the disclosures and documents required by this section.

AB218,32,3 (21) Trust account. (a) All money paid to a provider by or on behalf of an individual pursuant to a plan for distribution to creditors is held in trust. Within 2 business days after receipt, the provider shall deposit the money in a trust account established for the benefit of individuals to whom the provider is furnishing debt-management services.

AB218,32,7 (b) Money held in trust by a provider is not property of the provider or its designee. The money is not available to creditors of the provider or designee, except an individual from whom or on whose behalf the provider received money, to the extent that the money has not been disbursed to creditors of the individual.

AB218,32,8 (c) A provider shall do all of the following:

AB218,32,10 1. Maintain separate records of account for each individual to whom the provider is furnishing debt-management services.

AB218,32,12 2. Disburse money paid by or on behalf of the individual to creditors of the individual as disclosed in the agreement, except that all of the following apply:

AB218,32,14 a. The provider may delay payment to the extent that a payment by the individual is not final.

AB218,32,16 b. If a plan provides for regular periodic payments to creditors, the disbursement must comply with the due dates established by each creditor.

AB218,32,20 3. Promptly correct any payments that are not made or that are misdirected as a result of an error by the provider or other person in control of the trust account and reimburse the individual for any costs or fees imposed by a creditor as a result of the failure to pay or misdirection.

AB218,32,23 (d) A provider may not commingle money in a trust account established for the benefit of individuals to whom the provider is furnishing debt-management services with money of other persons.

AB218,32,25 (e) A trust account must at all times have a cash balance equal to or greater than the sum of the positive balances of each individual's account.

AB218,33,5 (f) If a provider has established a trust account pursuant to par. (a), the provider shall reconcile the trust account at least once a month. The reconciliation must compare the cash balance in the trust account with the sum of the balances in each individual's account. If the provider or its designee has more than one trust account, each trust account must be individually reconciled.

AB218,33,10 (g) If a provider discovers, or has a reasonable suspicion of, embezzlement or other unlawful appropriation of money held in trust, the provider immediately shall notify the division by a method approved by the division. Unless the division by rule provides otherwise, within 5 days thereafter, the provider shall give notice to the division describing the remedial action taken or to be taken.

AB218,33,14 (h) If an individual terminates an agreement or it becomes reasonably apparent to a provider that a plan has failed, the provider shall promptly refund to the individual all money paid by or on behalf of the individual which has not been paid to creditors, less fees that are payable to the provider under sub. (22).

AB218,33,19 (i) Before relocating a trust account from one financial institution to another, a provider shall inform the division of the name, business address, and telephone number of the new financial institution. As soon as practicable, the provider shall inform the administrator of the account number of the trust account at the new financial institution.

AB218,33,23 (22) Fees and other charges. (a) A provider may not impose directly or indirectly a fee or other charge on an individual or receive money from or on behalf of an individual for debt-management services except as permitted by this subsection.

AB218,34,3 (b) A provider may not impose charges or receive payment for debt-management services until the provider and the individual have signed an agreement that complies with subs. (18) and (27).

AB218,34,8 (c) If an individual assents to an agreement, a provider may not impose a fee or other charge for educational or counseling services, or the like, except as otherwise provided in this subsection and sub. (27) (d). The division may authorize a provider to charge a fee based on the nature and extent of the educational or counseling services furnished by the provider.

AB218,34,10 (d) Subject to adjustment of dollar amounts pursuant to sub. (31) (f), all of the following rules apply:

AB218,34,13 1. If an individual assents to a plan that contemplates that creditors will reduce finance charges or fees for late payment, default, or delinquency, the provider may charge all of the following:

AB218,34,15 a. A fee not exceeding $50 for consultation, obtaining a credit report, setting up an account, and the like.

AB218,34,18 b. A monthly service fee, not to exceed $10 times the number of creditors remaining in a plan at the time the fee is assessed, but not more than $50 in any month.

AB218,34,21 2. If an individual assents to a plan that contemplates that creditors will settle debts for less than the principal amount of the debt, a provider may charge all of the following:

AB218,34,24 a. Subject to sub. sub. (18) (d), a fee for consultation, obtaining a credit report, setting up an account, and the like, in an amount not exceeding the lesser of $400 and 4 percent of the debt in the plan at the inception of the plan.

AB218,35,3 b. A monthly service fee, not to exceed $10 times the number of creditors remaining in a plan at the time the fee is assessed, but not more than $50 in any month.

AB218,35,4 3. A provider may not impose or receive fees under both subds. 1. and 2.

AB218,35,9 4. Except as otherwise provided in sub. (27) (d), if an individual does not assent to an agreement, a provider may receive for educational and counseling services it provides to the individual a fee not exceeding $100 or, with the approval of the division, a larger fee. The division may approve a fee larger than $100 if the nature and extent of the educational and counseling services warrant the larger fee.