2023 - 2024 LEGISLATURE
January 12, 2024 - Introduced by Representatives Penterman, Madison, Emerson,
Sinicki and Andraca, cosponsored by Senators Jacque, Cabral-Guevara and
Spreitzer. Referred to Committee on State Affairs.
AB927,1,3 1An Act to renumber and amend 138.14 (10) (a) 1.; to amend 138.14 (13) (d)
2and 422.201 (3); and to create 138.14 (10) (a) 1g. of the statutes; relating to:
3interest rates on payday loans.
Analysis by the Legislative Reference Bureau
This bill limits the maximum interest rate that may be charged on a payday
Under current law, a person must be licensed by the Division of Banking in the
Department of Financial Institutions to originate or service a payday loan involving
a Wisconsin resident. Current law does not impose a limit on the interest that a
payday loan licensee may charge, before the maturity date, on a payday loan. If a
payday loan is not paid in full by the maturity date, current law prohibits a licensee
from charging interest after the maturity date in excess of 2.75 percent per month.
A payday loan under which a greater rate of interest is charged after the maturity
date is not enforceable.
The bill limits the interest rate that a payday loan licensee may charge, before
the maturity date, on a payday loan to an annual percentage rate of 36 percent. A
payday loan on which a greater rate of interest is charged is not enforceable.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
1Section 1. 138.14 (10) (a) 1. of the statutes is renumbered 138.14 (10) (a) 1r.
2and amended to read:
AB927,2,63 138.14 (10) (a) 1r. Except as provided in Subject to subd. 2. and sub. (12) (b),
4this section imposes no limit on the interest that a licensee may not charge before the
5maturity date of
an annual percentage rate of interest greater than 36 percent on a
6payday loan.
AB927,2 7Section 2 . 138.14 (10) (a) 1g. of the statutes is created to read:
AB927,2,118 138.14 (10) (a) 1g. For purposes of this paragraph, “annual percentage rate"
9shall be determined consistent with the provisions of section 107 of the federal Truth
10in Lending Act, 15 USC 1606, and federal Regulation Z adopted under that act, 12
11CFR 226
AB927,3 12Section 3. 138.14 (13) (d) of the statutes is amended to read:
AB927,2,2113 138.14 (13) (d) No payday loan, wherever made, for which a greater rate or
14amount of interest than is allowed under sub. (10) (a) 2. has been contracted for or
15received, may be enforced in this state, and every person in any way participating
16therein in this state shall be subject to this section. If a licensee makes an excessive
17charge of such interest as the result of an unintentional mistake, but upon demand
18makes correction of such mistake, the loan shall be enforceable and treated as if no
19violation occurred at the agreed rate. Nothing in this paragraph shall limit any
20greater rights or remedies afforded in chs. 421 to 427 to a customer in a consumer
21credit transaction.
AB927,4 22Section 4 . 422.201 (3) of the statutes is amended to read:
AB927,3,223 422.201 (3) For Notwithstanding sub. (2), for licensees under s. 138.09 or
24138.14 or under ss. 218.0101 to 218.0163, the finance charge or rate of interest,

1calculated according to those sections, may not exceed the maximums permitted in
2ss. 138.09, 138.14, and 218.0101 to 218.0163, respectively.
AB927,5 3Section 5. Initial applicability.
AB927,3,54 (1) This act first applies to loans made, refinanced, or consolidated on the
5effective date of this subsection.
AB927,6 6Section 6. Effective date.
AB927,3,87 (1) This act takes effect on the first day of the 3rd month beginning after
AB927,3,99 (End)