AB902: Bill Text

AB902,27,18 a. That the provider will furnish money to pay bills or prevent attachments.

AB902,27,20 b. That payment of a certain amount will guarantee satisfaction of a certain amount or range of indebtedness.

AB902,27,22 c. That participation in a program will or may prevent litigation, garnishment, attachment, repossession, foreclosure, eviction, or loss of employment.

AB902,27,24 9. Misrepresent that it is authorized or competent to furnish legal advice or perform legal services.

AB902,28,4 10. Represent that it is a not-for-profit entity unless it is organized and properly operating as a not-for-profit under the law of the state in which it was formed or that it is a tax-exempt entity unless it has received certification of tax-exempt status from the Internal Revenue Service.

AB902,28,6 11. Take a confession of judgment or power of attorney to confess judgment against an individual.

AB902,28,8 12. Employ an unfair, unconscionable, or deceptive act or practice, including the knowing omission of any material information.

AB902,28,10 (b) If a provider furnishes debt-settlement services to an individual, the provider may not, directly or indirectly, do any of the following:

AB902,28,11 1. Purchase a debt or obligation of the individual.

AB902,28,12 2. Receive from or on behalf of the individual any of the following:

AB902,28,14 a. A promissory note or other negotiable instrument other than a check or a demand draft.

AB902,28,15 b. A post-dated check or demand draft.

AB902,28,17 3. Lend money or provide credit to the individual, except as a deferral of a settlement fee at no additional expense to the individual.

AB902,28,19 4. Obtain a mortgage or other security interest from any person in connection with the services provided to the individual.

AB902,28,22 5. Except as permitted by federal law, disclose the identity or identifying information of the individual or the identity of the individual's creditors, except to any of the following:

AB902,28,23 a. The division, upon proper demand.

AB902,28,25 b. A creditor of the individual, to the extent necessary to secure the cooperation of the creditor in a program.

AB902,29,1 c. The extent necessary to administer the program.

AB902,29,3 6. Except for a settlement fee, if any, provide the individual less than the full benefit of a compromise of a debt arranged by the provider.

AB902,29,7 7. Charge the individual for or provide credit or other insurance, coupons for goods or services, membership in a club, access to computers or the Internet, or any other matter not directly related to debt-settlement services or educational services concerning personal finance.

AB902,29,10 8. Furnish legal advice or perform legal services, unless the person furnishing that advice to or performing those services for the individual is licensed to practice law.

AB902,29,12 9. Advise individuals to stop payment on any of the accounts being handled by the provider.

AB902,29,15 10. Receive compensation from creditors of the individual, financial institutions of which the individual is a customer, or 3rd-party collection agencies acting on behalf of creditors of the individual.

AB902,29,16 (c) This section does not authorize any person to engage in the practice of law.

AB902,29,21 (d) A provider may not receive a gift or bonus, premium, reward, or other compensation, directly or indirectly, for advising, arranging, or assisting an individual in connection with obtaining, an extension of credit or other service from a lender or service provider, except for educational or counseling services required in connection with a government-sponsored program.

AB902,30,2 (25) Notice of litigation. No later than 30 days after a provider has been served with notice of a civil action for violation of this section by or on behalf of an individual who resides in this state at either the time of an agreement or the time the notice is served, the provider shall notify the division in a record that it has been sued.

AB902,30,5 (26) Advertising. A provider that advertises debt-settlement services shall disclose no information in conflict with the information specified in sub. (14) (d) 3. and 4.

AB902,30,9 (27) Liability for the conduct of other persons. If a provider delegates any of its duties or obligations under an agreement or this section to another person, including an independent contractor, the provider is liable for conduct of the person which, if done by the provider, would violate the agreement or this section.

AB902,30,13 (28) Powers of division. (a) The division may act on its own initiative or in response to complaints and may receive complaints, take action to obtain voluntary compliance with this section, refer cases to the attorney general, and seek or provide remedies as provided in this section.

AB902,30,20 (b) The division may investigate and examine, in this state or elsewhere, by subpoena or otherwise, the activities, books, accounts, and records of a person that provides or offers to provide debt-settlement services, or a person to which a provider has delegated its obligations under an agreement or this section, to determine compliance with this section. Information that identifies individuals who have agreements with the provider shall not be disclosed to the public. In connection with the investigation, the division may do any of the following:

AB902,30,22 1. Charge the person the reasonable costs necessarily incurred to conduct the examination.

AB902,30,24 2. Require or permit a person to file a statement, verified under oath or affirmation, as to all the facts and circumstances of a matter to be investigated.

AB902,31,2 (c) The division may adopt rules to implement the provisions of this section in accordance with subch. II of ch. 227.

AB902,31,6 (d) The division may enter into cooperative arrangements with any other federal or state agency having authority over providers and may exchange with any of those agencies information about a provider, including information obtained during an examination of the provider.

AB902,31,8 (e) The division, by rule, shall establish reasonable fees to be paid by providers for the expense of administering this section.

AB902,31,17 (f) The division, by rule, shall adopt dollar amounts instead of those specified in subs. (1), (4), (8), (19), (29), and (31) to reflect inflation, as measured by the United States bureau of labor statistics consumer price index for all urban consumers or, if that index is not available, another index adopted by rule by the division. The division shall adopt a base year and adjust the dollar amounts, effective on July 1 of each year, if the change in the index from the base year, as of December 31 of the preceding year, is at least 10 percent. The dollar amount shall be rounded to the nearest $100, except that the amounts in sub. (19) shall be rounded to the nearest dollar.

AB902,31,19 (g) The division shall notify licensed providers of any change in dollar amounts made pursuant to par. (f) and make that information available to the public.

AB902,31,21 (29) Administrative remedies. (a) The division may enforce this section and rules adopted under this section by taking one or more of the following actions:

AB902,31,23 1. Ordering a provider or a director, employee, or other agent of a provider to cease and desist from any violations.

AB902,32,3 2. Ordering a provider or a person that has caused a violation to correct the violation, including making restitution of money or property to a person aggrieved by a violation.

AB902,32,6 3. Subject to adjustment of the dollar amount pursuant to sub. (28) (f), recovering in a civil action from a provider or a person that has caused a violation a forfeiture not exceeding $10,000 for each violation.

AB902,32,7 4. Prosecuting a civil action to do any of the following:

AB902,32,8 a. Enforce an order.

AB902,32,9 b. Obtain restitution or an injunction or other equitable relief, or both.

AB902,32,10 5. Intervening in an action brought under sub. (31).

AB902,32,14 (b) Subject to adjustment of the dollar amount pursuant to sub. (28) (f), if a person violates or knowingly authorizes, directs, or aids in the violation of a final order issued under par. (a) 1. or 2., the division may recover in a civil action a forfeiture not exceeding $20,000 for each violation.

AB902,32,15 (c) The division may maintain an action to enforce this section.

AB902,32,18 (d) The division may recover the reasonable costs of enforcing the section under pars. (a) to (c), including attorney fees based on the hours reasonably expended and the hourly rates for attorneys of comparable experience in the community.

AB902,32,23 (e) In determining the amount of a civil penalty to impose under par. (a) or (b), a court shall consider the seriousness of the violation, the good faith of the violator, any previous violations by the violator, the deleterious effect of the violation on the public, the net worth of the violator, and any other factor the court considers relevant to the determination of the civil penalty.

AB902,32,25 (30) Suspension, revocation, or nonrenewal of license. (a) In this subsection, "insolvent" means any of the following:

AB902,33,2 1. Having generally ceased to pay debts in the ordinary course of business other than as a result of a good-faith dispute.

AB902,33,3 2. Being unable to pay debts as they become due.

AB902,33,5 3. Being insolvent within the meaning of the federal bankruptcy law, 11 USC 101 to 1532.

AB902,33,7 (b) The division may suspend, revoke, or deny renewal of a provider's license if any of the following apply:

AB902,33,9 1. A fact or condition exists that, if it had existed when the licensee applied for licensure as a provider, would have been a reason for denying licensure.

AB902,33,11 2. The provider has committed a material violation of this section or a rule or order of the division under this section.

AB902,33,12 3. The provider is insolvent.

AB902,33,16 4. The provider or an employee, affiliate, or agent of the provider has refused to permit the division to make an examination authorized by this section, failed to comply with sub. (28) (b) 2. within 15 days after request, or made a material misrepresentation or omission in complying with sub. (28) (b) 2.

AB902,33,18 5. The provider has not responded within a reasonable time and in an appropriate manner to communications from the division.

AB902,33,21 (c) In accordance with s. 73.0301, the division shall revoke a license if the department of revenue has certified under s. 73.0301 that the licensee is liable for delinquent taxes.

AB902,34,4 (d) In accordance with a memorandum of understanding entered into under s. 49.857, the division shall restrict or suspend a license if the licensee is an individual who fails to comply, after appropriate notice, with a subpoena or warrant issued by the department of children and families 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.

AB902,34,6 (e) If the division suspends or revokes a provider's license, the provider may appeal and request a hearing pursuant to subch. III of ch. 227.

AB902,34,10 (31) Private enforcement. (a) If an individual voids an agreement pursuant to sub. (21) (b), the individual may recover in a civil action all money paid by or on behalf of the individual pursuant to the agreement, in addition to the recovery under par. (c) 3. and 4.

AB902,34,14 (b) If an individual voids an agreement pursuant to sub. (21) (a), the individual may recover in a civil action 3 times the total amount of the fees, charges, money, and payments made by the individual to the provider, in addition to the recovery under par. (c) 4.

AB902,34,17 (c) Subject to par. (d), an individual with respect to whom a provider violates this section may recover all of the following in a civil action from the provider and any person that caused the violation:

AB902,34,19 1. Compensatory damages for injury, including noneconomic injury, caused by the violation.

AB902,34,23 2. Except as otherwise provided in par. (d) and subject to adjustment of the dollar amount pursuant to sub. (28) (f), with respect to a violation of sub. (14), (16), (17), (18), (19), (20), (23), or (24) (a), (b), or (d), the greater of the amount recoverable under subd. 1. or $5,000.

AB902,34,24 3. Punitive damages.

AB902,34,25 4. Reasonable attorney fees and costs.

AB902,35,2 (d) In a class action, except for a violation of sub. (24) (a) 4., the minimum damages provided in par. (c) 2. do not apply.

AB902,35,6 (e) In addition to the remedy available under par. (c), if a provider violates an individual's rights under sub. (17), the individual may recover in a civil action all money paid or deposited by or on behalf of the individual pursuant to the agreement, except for amounts paid to creditors.

AB902,35,14 (f) A provider is not liable under this subsection for a violation of this section if the provider proves that the violation was not intentional and resulted from a good-faith error notwithstanding the maintenance of procedures reasonably adapted to avoid the error. An error of legal judgment with respect to a provider's obligations under this section is not a good-faith error. If, in connection with a violation, the provider has received more money than authorized by an agreement or this section, the defense provided by this paragraph is not available unless the provider refunds the excess within 2 business days of learning of the violation.

AB902,35,17 (32) Violation of unfair or deceptive practices. If an act or practice of a provider violates both this section and ch. 100, an individual may not recover under both for the same act or practice.

AB902,35,20 (33) Statute of limitations. (a) An action or proceeding brought pursuant to sub. (29) (a), (b), or (c) shall be commenced within 4 years after the conduct that is the basis of the division's complaint.

AB902,35,22 (b) An action brought pursuant to sub. (31) shall be commenced within 2 years after the latest of the following:

AB902,35,23 1. The individual's last transmission of money to a provider.

AB902,35,25 2. The date on which the individual discovered or reasonably should have discovered the facts giving rise to the individual's claim.

AB902,36,2 3. Termination of actions or proceedings by the division with respect to a violation of the section.

AB902,36,7 (c) The period prescribed in par. (b) 2. is tolled during any period during which the provider or, if different, the defendant has materially and willfully misrepresented information required by this section to be disclosed to the individual, if the information so misrepresented is material to the establishment of the liability of the defendant under this section.

AB902,36,12 (34) Relation to Electronic Signatures in Global and National Commerce Act. This section modifies, limits, and supersedes the federal Electronic Signatures in Global and National Commerce Act (15 USC 7001 to 7031) but does not modify, limit, or supersede 15 USC 7001 (c) or authorize electronic delivery of any of the notices described in 15 USC 7003 (b).

AB902, s. 7 Section 7. 220.02 (2) (b) of the statutes is amended to read:

AB902,36,17 220.02 (2) (b) The lending of money under s. 138.09 or those relating to finance companies, motor vehicle dealers, adjustment service companies, providers of debt-settlement services, community currency exchanges, and collection agencies under ch. 218.

AB902, s. 8 Section 8. 220.02 (3) of the statutes is amended to read:

AB902,37,3 220.02 (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, insurance premium finance companies, motor vehicle dealers, adjustment service companies, providers of debt-settlement services, community currency exchanges, mortgage bankers, loan originators, mortgage brokers, 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.

AB902, s. 9 Section 9. Nonstatutory provisions.

AB902,37,12 (1) If a person is affected by a contract that is in effect on the effective date of this subsection and that contains provisions that are inconsistent with section 218.03 of the statutes, as created by this act, but that are not inconsistent with any applicable law in effect immediately before the effective date of this subsection, then, notwithstanding section 218.03 of the statutes, as created by this act, the person may perform its obligations, and exercise its rights, under those provisions of the contract until the contract expires or is extended, modified, or renewed, whichever occurs first.

AB902, s. 10 Section 10. Effective date.

AB902,37,15 (1) This act takes effect on the first day of the 7th month beginning after publication.

AB902,37,16 (End)