AB902: Bill Text

AB902,5,20 d. Subject to adjustment of the dollar amount pursuant to sub. (28) (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.

AB902,5,22 e. An officer or director of, or an individual performing similar functions with respect to, a person described in subd. 2. a.

AB902,5,24 f. The spouse of, or an individual occupying the residence of, an individual described in subd. 2. a. to e.

AB902,6,2 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.

AB902,6,4 (b) "Agreement" means an agreement between a provider and an individual for the performance of debt-settlement services.

AB902,6,6 (c) "Business address" means the physical location of a business, including the name and number of a street.

AB902,6,10 (d) "Certified debt specialist" means an individual certified by a training program or certifying organization that authenticates the competence of individuals providing assistance to other individuals in connection with debt-settlement services.

AB902,6,12 (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.

AB902,6,13 (f) "Day" means calendar day.

AB902,6,17 (g) "Debt-settlement services" means services as an intermediary between an individual and one or more creditors of the individual for the purpose of obtaining concessions without receiving money from the individual with the intent to distribute money to the individual's creditors.

AB902,6,18 (h) "Division" means the division of banking.

AB902,6,19 (i) "Entity" means a person other than an individual.

AB902,6,23 (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.

AB902,6,25 (k) "Good faith" means honesty in fact and the observance of reasonable standards of fair dealing.

AB902,7,4 (L) "Person" means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, or any other legal or commercial entity. "Person" does not include a public corporation, government, or governmental subdivision, agency, or instrumentality.

AB902,7,6 (m) "Principal amount of the debt" means the amount of a debt at the time of the execution of an agreement.

AB902,7,10 (n) "Program" means a program or strategy in which a provider furnishes debt-settlement services, which contemplates that creditors will settle debts for less than the full principal amount of the debt owed by an individual, and under which the individual makes payments directly to the creditors.

AB902,7,12 (o) "Provider" means a person that provides, offers to provide, or agrees to provide debt-settlement services directly or through others.

AB902,7,14 (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.

AB902,7,19 (q) "Settlement fee" means a fee charged pursuant to a fee agreement between an individual and debt settlement provider under which the fee is calculated using a percentage of savings the individual realizes from a settled debt 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.

AB902,7,21 (r) "Sign" means, with present intent to authenticate or adopt a record, any of the following:

AB902,7,22 1. To execute or adopt a tangible symbol.

AB902,7,24 2. To attach to or logically associate with the record an electronic sound, symbol, or process.

AB902,8,3 (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.

AB902,8,6 (2) 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.

AB902,8,8 (b) This section does not apply to a provider to the extent that the provider does any of the following:

AB902,8,11 1. Provides or agrees to provide debt-settlement, 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.

AB902,8,13 2. Receives no compensation for debt-settlement services from or on behalf of the individuals to whom it provides the services or from their creditors.

AB902,8,16 (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:

AB902,8,18 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.

AB902,8,19 2. A financial institution.

AB902,8,21 3. An affiliate, as defined in sub. (1) (a) 2. a., of a financial institution if the affiliate is regulated by a federal or state banking regulatory authority.

AB902,8,24 4. A title insurer, escrow company, or other person, that provides bill-paying services, if the provision of debt-settlement services is incidental to the bill-paying services.

AB902,9,3 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-settlement services is incidental to the provision of legal services.

AB902,9,7 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-settlement services is incidental to the provision of accounting services.

AB902,9,12 7. A member of a financial-planning profession whose members the division, by rule, determines are licensed by this state and subject to a disciplinary mechanism, code of professional responsibility, and continuing education requirement, if the member's provision of debt-settlement services is incidental to the provision of financial-planning services.

AB902,9,14 8. A person licensed as an adjustment service company under s. 218.02 if the person is acting within the course and scope of that license.

AB902,9,18 (3) License required. (a) Except as otherwise provided in par. (b), a provider may not provide debt-settlement 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.

AB902,9,20 (b) If a provider is licensed under this section, par. (a) does not apply to an employee or agent of the provider.

AB902,9,22 (c) The division shall maintain and publicize a list of the names of all licensed providers.

AB902,9,24 (4) Application for license: form, fee, and accompanying documents. (a) An application for licensure as a provider shall be in a form prescribed by the division.

AB902,10,4 (b) Subject to adjustment of dollar amounts pursuant to sub. (28) (f), an application for licensure as a provider shall be accompanied by the fee established by the division; if applicable, proof of compliance with s. 178.45, 180.1501, 181.1501, or 183.1002; and one of the following:

AB902,10,6 1. Evidence of aggregate umbrella insurance in the amount of at least $1,000,000 that satisfies all of the following:

AB902,10,9 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.

AB902,10,11 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.

AB902,10,12 c. The insurance has a maximum deductible of $10,000.

AB902,10,14 d. The insurance insures against claims made by individuals in this or any other state, as their interests may appear.

AB902,10,16 e. The insurance is not subject to cancellation by the applicant without an effective policy in place to cover the cancelled insurance.

AB902,10,18 2. Evidence that the applicant has obtained a surety bond that satisfies all of the following:

AB902,10,20 a. The surety bond is in a form approved by the division and is for a term no less than the expiration of the license.

AB902,10,23 b. The surety bond runs to this state for the benefit of this state and of individuals who reside in this state when they agree to receive debt-settlement services from the applicant, as their interests may appear.

AB902,10,25 c. Payment of the surety bond is conditioned upon noncompliance with this section by the applicant or an agent of the applicant.

AB902,11,5 d. The surety bond is in an amount of not less than $20,000 or a greater amount that the division determines is warranted by the financial condition and business experience of the applicant, the history of the applicant in providing debt-settlement services, the risk to individuals, or any other factor the division considers appropriate.

AB902,11,8 (5) Application for license: required information. An application for licensure shall be signed and verified under oath or affirmation and include all of the following:

AB902,11,11 (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.

AB902,11,12 (b) All names under which the applicant conducts business.

AB902,11,15 (c) The address of each location in this state at which the applicant will provide debt-settlement services or a statement that the applicant will have no such location.

AB902,11,17 (d) The name and home address of each officer and director of the applicant and each person that owns at least 10 percent of the applicant.

AB902,11,20 (e) Identification of every jurisdiction in which, during the 5 years immediately preceding the application the applicant or any of its officers or directors have been licensed or registered to provide debt-settlement services.

AB902,11,24 (f) A statement describing, to the extent it is known or should be known by the applicant, any material civil or criminal judgment or litigation and any material administrative or enforcement action by a governmental agency in any jurisdiction against the applicant, any of its officers, directors, owners, or agents.

AB902,12,2 (g) Evidence of accreditation or certification by an independent accrediting or certifying organization approved by the division.

AB902,12,5 (h) A description of the 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.

AB902,12,8 (i) A description of the applicant's financial analysis and initial budget program, including any form or electronic model, used to evaluate the financial condition of individuals.

AB902,12,10 (j) A copy of each form of agreement that the applicant will use with individuals who reside in this state.

AB902,12,12 (k) The schedule of fees and charges that the applicant will use with individuals who reside in this state.

AB902,12,17 (L) At the applicant's expense, the results of a state and national fingerprint-based criminal history records check, covering every officer of the applicant, conducted within the immediately preceding 12 months. For purposes of 28 USC 534 (a) (4), the division is the state agency authorized to receive the results of the check.

AB902,12,19 (m) 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:

AB902,12,20 1. Any affiliate of the applicant.

AB902,12,22 2. Any entity that provides products or services to the applicant or any individual relating to the applicant's debt-settlement services.

AB902,12,24 (n) The identity of each director who is an affiliate, as defined in sub. (1) (a) 1. or 2. a., b., d., e., f., or g., of the applicant.

AB902,13,2 (o) Any other information that the division reasonably requires to perform the division's duties under sub. (8).

AB902,13,5 (6) Application for license: obligation to update information. An applicant or licensed provider shall notify the division within 10 days after a change in the information specified in sub. (4) (b) 1. or 2. or (5) (a), (c), (f), or (k).

AB902,13,10 (7) Application for license: public information. Except for the information required by sub. (5) (i), (L), and (m) and the addresses required by sub. (5) (d), which the division shall withhold from inspection and copying under s. 19.35 (1), the division shall make all other information in an application for licensure, or renewal of licensure, as a provider available to the public.

AB902,13,13 (8) License: issuance or denial. (a) Except as otherwise provided in pars. (b) and (c), the division shall issue a license as a provider to a person that complies with subs. (4) and (5).

AB902,13,14 (b) The division may deny licensure if any of the following apply:

AB902,13,15 1. The application is incomplete or contains materially erroneous information.

AB902,13,18 2. An officer, director, or owner of the applicant has been convicted of a crime, or suffered a civil judgment, involving dishonesty or the violation of state or federal securities laws.

AB902,13,20 3. The applicant or any of its officers, directors, or owners have defaulted in the payment of money collected for others.

AB902,13,21 (c) The division shall deny licensure if any of the following apply:

AB902,13,22 1. The application is not accompanied by the fee established by the division.

AB902,13,24 2. The applicant has been certified under s. 73.0301 by the department of revenue as being liable for delinquent taxes.

AB902,14,7 3. If the applicant is an individual, the applicant has failed 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 and 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.

AB902,14,12 (9) License: timing. (a) The division shall approve or deny an initial license as a provider within 90 days after an application is filed. In connection with a request pursuant to sub. (5) (o) for additional information, the division may extend the 90-day period for not more than 45 days. Within 7 days after denying an application, the division, in a record, shall inform the applicant of the reasons for the denial.

AB902,14,15 (b) If the division denies an application for licensure as a provider or does not act on an application within the time prescribed in par. (a), the applicant may appeal and request a hearing pursuant to subch. III of ch. 227.

AB902,14,16 (c) Subject to subs. (10) (d) and (30), a license as a provider is valid for one year.

AB902,14,18 (10) Renewal of license. (a) A provider shall obtain a renewal of its license annually.

AB902,14,21 (b) An application for renewal of licensure as a provider shall be in a form prescribed by the division, signed and verified under oath or affirmation, and shall satisfy all of the following:

AB902,14,22 1. Be filed no fewer than 30 and no more than 60 days before the license expires.

AB902,14,23 2. Be accompanied by the fee established by the division.