AB218: Bill Text

AB218,4,19 (a) 1. "Affiliate," with respect to an individual, means any of the following:

AB218,4,20 a. The spouse of the individual.

AB218,4,21 b. A sibling of the individual or the spouse of a sibling.

AB218,4,23 c. An individual or the spouse of an individual who is a lineal ancestor or lineal descendant of the individual or the individual's spouse.

AB218,5,3 d. An aunt, uncle, great aunt, great uncle, first cousin, niece, nephew, grandniece, or grandnephew, whether related by the whole or the half blood or adoption, or the spouse of any of them.

AB218,5,4 e. Any other individual occupying the residence of the individual.

AB218,5,5 2. "Affiliate," with respect to an entity, means any of the following:

AB218,5,7 a. A person that directly or indirectly controls, is controlled by, or is under common control with the entity.

AB218,5,9 b. An officer of, or an individual performing similar functions with respect to, the entity.

AB218,5,11 c. A director of, or an individual performing similar functions with respect to, the entity.

AB218,5,16 d. Subject to adjustment of the dollar amount pursuant to sub. (31) (f), a person that receives or received more than $25,000 from the entity in either the current year or the preceding year or a person that owns more than 10 percent of, or an individual who is employed by or is a director of, a person that receives or received more than $25,000 from the entity in either the current year or the preceding year.

AB218,5,18 e. An officer or director of, or an individual performing similar functions with respect to, a person described in subd. 2. a.

AB218,5,20 f. The spouse of, or an individual occupying the residence of, an individual described in subd. 2. a. to e.

AB218,5,22 g. An individual who has the relationship specified in subd. 1. d. to an individual or the spouse of an individual described in subd. 2. a. to e.

AB218,5,24 (b) "Agreement" means an agreement between a provider and an individual for the performance of debt-management services.

AB218,6,2 (c) "Business address" means the physical location of a business, including the name and number of a street.

AB218,6,6 (d) "Certified counselor" means an individual certified by a training program or certifying organization, approved by the division, that authenticates the competence of individuals providing education and assistance to other individuals in connection with debt-management services.

AB218,6,8 (e) "Concessions" means assent to repayment of a debt on terms more favorable to an individual than the terms of the contract between the individual and a creditor.

AB218,6,9 (f) "Day" means calendar day.

AB218,6,12 (g) "Debt-management services" means services as an intermediary between an individual and one or more creditors of the individual for the purpose of obtaining concessions.

AB218,6,13 (h) "Division" means the division of banking.

AB218,6,14 (i) "Entity" means a person other than an individual.

AB218,6,18 (j) "Financial institution" means a financial institution, including a commercial bank, savings bank, savings and loan association, credit union, and trust company, engaged in the business of banking, chartered under federal or state law, and regulated by a federal or state banking regulatory authority.

AB218,6,20 (k) "Good faith" means honesty in fact and the observance of reasonable standards of fair dealing.

AB218,6,24 (L) "Person" means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, or any other legal or commercial entity. The term does not include a public corporation, government, or governmental subdivision, agency, or instrumentality.

AB218,7,4 (m) "Plan" means a program or strategy in which a provider furnishes debt management services to an individual and which includes a schedule of payments to be made by or on behalf of the individual and used to pay debts owed by the individual.

AB218,7,6 (n) "Principal amount of the debt" means the amount of a debt at the time of an agreement.

AB218,7,8 (o) "Provider" means a person that provides, offers to provide, or agrees to provide debt-management services directly or through others.

AB218,7,10 (p) "Record" means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

AB218,7,13 (q) "Settlement fee" means a charge imposed on or paid by an individual in connection with a creditor's assent to accept in full satisfaction of a debt an amount less than the principal amount of the debt.

AB218,7,15 (r) "Sign" means, with present intent to authenticate or adopt a record, any of the following:

AB218,7,16 1. To execute or adopt a tangible symbol.

AB218,7,18 2. To attach to or logically associate with the record an electronic sound, symbol, or process.

AB218,7,21 (s) "State" means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.

AB218,7,23 (t) "Trust account" means an account held by a provider that is all of the following:

AB218,7,24 1. Established in an insured financial institution.

AB218,7,25 2. Separate from other accounts of the provider or its designee.

AB218,8,2 3. Designated as a trust account or other account designated to indicate that the money in the account is not the money of the provider or its designee.

AB218,8,4 4. Used to hold money of one or more individuals for disbursement to creditors of the individuals.

AB218,8,7 (3) Exempt agreements and persons. (a) This section does not apply to an agreement with an individual who the provider has no reason to know resides in this state at the time of the agreement.

AB218,8,9 (b) This section does not apply to a provider to the extent that the provider does any of the following:

AB218,8,12 1. Provides or agrees to provide debt-management, educational, or counseling services to an individual who the provider has no reason to know resides in this state at the time the provider agrees to provide the services.

AB218,8,16 2. Receives no compensation for debt-management services from or on behalf of the individuals to whom it provides the services or from their creditors, unless the services are provided free of charge with the intent of evading the provisions of this section.

AB218,8,19 (c) This section does not apply to any of the following persons or their employees when the person or the employee is engaged in the regular course of the person's business or profession:

AB218,8,21 1. A judicial officer, a person acting under an order of a court or an administrative agency, or an assignee for the benefit of creditors.

AB218,8,22 2. A financial institution.

AB218,8,24 3. An affiliate, as defined in sub. (2) (a) 2. a., of a financial institution if the affiliate is regulated by a federal or state banking regulatory authority.

AB218,9,3 4. A title insurer, escrow company, or other person, that provides bill-paying services, if the provision of debt-management services is incidental to the bill-paying services.

AB218,9,6 5. An attorney licensed or otherwise authorized to practice law in this state who provides legal services in an attorney-client relationship, if the provision of debt-management services is incidental to the provision of legal services.

AB218,9,10 6. A certified public accountant licensed to provide accounting services in this state who provides accounting services in an accountant-client relationship, if the provision of debt-management services is incidental to the provision of accounting services.

AB218,9,14 (4) License required. (a) Except as otherwise provided in par. (b), a provider may not provide debt-management services to an individual who it reasonably should know resides in this state at the time it agrees to provide the services, unless the provider is licensed under this section.

AB218,9,16 (b) If a provider is licensed under this section, par. (a) does not apply to an employee or agent of the provider.

AB218,9,18 (c) The division shall maintain and publicize a list of the names of all licensed providers.

AB218,9,20 (5) Application for license: form, fee, and accompanying documents. (a) An application for licensure as a provider must be in a form prescribed by the division.

AB218,9,22 (b) Subject to adjustment of dollar amounts pursuant to sub. (31) (f), an application for licensure as a provider must be accompanied by all of the following:

AB218,9,23 1. The fee established by the division.

AB218,9,24 2. The bond required by sub. (13).

AB218,10,2 3. Identification of all trust accounts required by sub. (21) and an irrevocable consent authorizing the division to review and examine the trust accounts.

AB218,10,4 4. Evidence of insurance in the amount of $250,000 that satisfies all of the following:

AB218,10,7 a. The insurance is against the risks of dishonesty, fraud, theft, and other misconduct on the part of the applicant or a director, employee, or agent of the applicant.

AB218,10,9 b. The insurance is issued by an insurance company authorized to do business in this state and rated at least "A" by a nationally recognized rating organization.

AB218,10,10 c. The insurance has no deductible.

AB218,10,12 d. The insurance is payable to the applicant, the individuals who have agreements with the applicant, and this state, as their interests may appear.

AB218,10,14 e. The insurance is not subject to cancellation by the applicant without the approval of the division.

AB218,10,16 5. If applicable, proof of compliance with s. 178.45, 180.1501, 181.1501, or 183.1002.

AB218,10,19 6. If the applicant is organized as a not-for-profit entity or is exempt from taxation, evidence of not-for-profit and tax-exempt status applicable to the applicant under the Internal Revenue Code, 26 USC 501.

AB218,10,21 7. If the applicant is a corporation or limited liability company organized under the laws of another state, a certificate of good standing issued by the other state.

AB218,10,24 (6) Application for license: required information. An application for licensure must be signed and verified under oath or affirmation and include all of the following:

AB218,11,3 (a) The applicant's name, principal business address and telephone number, and all other business addresses in this state, electronic-mail addresses, and Internet Web site addresses.

AB218,11,4 (b) All names under which the applicant conducts business.

AB218,11,7 (c) The address of each location in this state at which the applicant will provide debt-management services or a statement that the applicant will have no such location.

AB218,11,11 (d) The title, name, and home address of each officer and director of the applicant; the percentage ownership, if any, of the applicant held by each officer and director; and the name and home address of each person that owns at least 10 percent of the applicant.

AB218,11,15 (e) Identification of every jurisdiction in which, during the 5 years immediately preceding the application the applicant or any of its officers or directors has been licensed or registered to provide debt-management services, or in which individuals have resided when they received debt-management services from the applicant.

AB218,11,19 (f) A statement describing all of the following, to the extent it is known or should be known by the applicant, in any jurisdiction against the applicant, any of its officers, directors, owners, or agents, or any person who is authorized to have access to the trust account required by sub. (21):

AB218,11,20 1. All criminal convictions.

AB218,11,22 2. All actions by governmental agencies, and all judgments, relevant to the provision of debt-management services.

AB218,11,24 3. All pending charges, actions, suits, and claims, relevant to the provision of debt-management services.

AB218,12,4 (g) The applicant's financial statements, audited by an accountant licensed to conduct audits, for each of the 2 years immediately preceding the application or, if it has not been in operation for the 2 years preceding the application, for the period of its existence.

AB218,12,6 (h) Evidence of accreditation by an independent accrediting organization approved by the division.

AB218,12,8 (i) Evidence that, within 12 months after initial employment, each of the applicant's counselors becomes certified as a certified counselor.

AB218,12,11 (j) A description of the 3 most commonly used educational programs that the applicant provides or intends to provide to individuals who reside in this state and a copy of any materials used or to be used in those programs.

AB218,12,14 (k) A description of the applicant's financial analysis and initial budget plan, including any form or electronic model, used to evaluate the financial condition of individuals.

AB218,12,16 (L) A copy of each form of agreement that the applicant will use with individuals who reside in this state.

AB218,12,18 (m) The schedule of fees and charges that the applicant will use with individuals who reside in this state.

AB218,12,21 (n) At the applicant's expense, the results of a criminal-records check, including fingerprints, conducted within the immediately preceding 12 months, covering all of the following:

AB218,12,22 1. Every officer of the applicant.

AB218,12,24 2. Every employee or agent of the applicant who is authorized to have access to the trust account required by sub. (21).

AB218,13,2 (o) The names and addresses of all employers of each director during the 10 years immediately preceding the application.

AB218,13,4 (p) A description of any ownership interest of at least 10 percent by a director, owner, or employee of the applicant in all of the following: