LRB-2425/1
ARG:klm
2023 - 2024 LEGISLATURE
May 2, 2023 - Introduced by Senators Stafsholt, Hesselbein and Spreitzer,
cosponsored by Representatives
O'Connor, Doyle, Penterman, Subeck,
Green, Rettinger, Wichgers and Allen. Referred to Committee on Financial
Institutions and Sporting Heritage.
SB259,1,2
1An Act to renumber and amend 138.14 (3); and
to create 138.14 (3) (b) of the
2statutes;
relating to: payday loans.
Analysis by the Legislative Reference Bureau
This bill exempts from payday loan regulation any transaction in which no
finance charge or other charge or fee is imposed against or accepted from the loan
recipient.
Under current law, a person must be licensed by the Division of Banking
(division) in the Department of Financial Institutions to originate or service a payday
loan involving a Wisconsin resident. A “payday loan" is defined as a transaction
between an individual with an account at a financial establishment and another
person (payday lender) in which the payday lender agrees to accept a check or
electronic fund transfer (EFT) authorization from the individual, to delay
negotiating the check or initiating the EFT for a period of time, and to extend a loan
to the individual for a term of 90 days or less. Current law imposes various
requirements and restrictions applicable to payday lenders and payday loan
transactions. However, there is an exemption from the payday loan licensing
requirement and all other payday loan requirements and restrictions for banks,
savings banks, savings and loan associations, trust companies, credit unions, and
their affiliates.
This bill creates a transaction-based exemption from the requirements and
restrictions applicable to payday loans. These requirements and restrictions do not
apply to any transaction in which no finance charge, as defined under federal
Truth-in-Lending Act regulations, and no other fees or charges of any kind, are
required or accepted, at any time, from the person receiving the loan.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB259,1
1Section
1. 138.14 (3) of the statutes is renumbered 138.14 (3) (intro.) and
2amended to read:
SB259,2,33
138.14
(3) (intro.) This section does not apply to
banks, any of the following:
SB259,2,5
4(a) Banks, savings banks, savings and loan associations, trust companies,
5credit unions, or any of their affiliates.
SB259,2
6Section
2. 138.14 (3) (b) of the statutes is created to read:
SB259,2,107
138.14
(3) (b) Any transaction in which no finance charge, and no other fees or
8charges of any kind, are required or accepted, at any time, from the person receiving
9the loan. For the purposes of this paragraph, “finance charge” has the meaning given
10in
12 CFR 1026.4.
SB259,3
11Section 3
.
Nonstatutory provisions.
SB259,2,1312
(1) This act first applies to loans made, refinanced, or consolidated on the
13effective date of this subsection.
