AB310: Bill Text

LRB-1052/1

ARG:jld:rs

2009 - 2010 LEGISLATURE

2009 Assembly BILL 310

June 8, 2009 - Introduced by Representatives Zepnick, Sinicki and Spanbauer. Referred to Committee on Financial Institutions.

AB310,1,1 An Act to create 138.15 of the statutes; relating to: motor vehicle title loans.

Analysis by the Legislative Reference Bureau

Under current law, a lender other than a bank, savings bank, savings and loan association, or credit union generally must obtain a license from the Department of Financial Institutions to assess a finance charge greater than 18 percent per year. This type of lender is generally referred to as a "licensed lender." A licensed lender must have a separate license for each place of business it maintains. Current law also contains numerous provisions regulating consumer loans, which are generally loans of $25,000 or less made to individuals for personal, family, or household purposes.

This bill prohibits a licensed lender from making or offering a motor vehicle title loan. The bill defines "motor vehicle title loan" as a loan of $25,000 or less to a borrower that is, or is to be, secured by a nonpurchase money security interest in the borrower's motor vehicle and that has an original term of not more than three months. Under the bill, a "borrower" is an individual who obtains or seeks to obtain a motor vehicle title loan for personal, family, or household purposes.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB310, s. 1 Section 1. 138.15 of the statutes is created to read:

AB310,1,3 138.15 Motor vehicle title loans. (1) Definitions. In this section:

AB310,2,2 (a) "Borrower" means an individual who obtains or seeks to obtain a motor vehicle title loan for personal, family, or household purposes.

AB310,2,6 (b) "Motor vehicle title loan" means a loan of $25,000 or less to a borrower that is, or is to be, secured by an interest, other than a purchase money security interest, in the borrower's motor vehicle and that has an original term of not more than 3 months.

AB310,2,8 (2) Title loans prohibited. No person required to be licensed under s. 138.09 may make or offer any motor vehicle title loan.

AB310, s. 2 Section 2 . Initial applicability.

AB310,2,11 (1) This act first applies to motor vehicle title loans made or offered on the effective date of this subsection.

AB310, s. 3 Section 3. Effective date.

AB310,2,14 (1) This act takes effect on the first day of the 4th month beginning after publication.

AB310,2,15 (End)