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Updating provisions related to grant applications, grant evaluation and approval, grant contracts, reporting requirements, reimbursement procedures, selection of hazardous waste handlers, and other matters to keep up with developments to programs relating to the collection of hazardous wastes.
Analysis of Policy Alternatives. Do nothing. If DATCP takes no action, current rules will remain in effect. However, the current rules are outdated and inconsistent in certain respects. This rule would create permanent rules concerning the prescription drug component of the program and allow for the modernization and streamlining of the "Clean Sweep" program overall.
Detailed Explanation of Statutory Authority for the Rule (Including the Statutory Citation and Language)
DATCP has statutory authority under s. 93.07 (1), Stats., to promulgate rules relating to the administration of "Clean Sweep" grants programs for agricultural and household hazardous waste, including prescription drugs, authorized by sections 93.55 and 93.57, Stats.
93.07 Departmental duties. It shall be the duty of the department:
(1) Regulations. To make and enforce such regulations, not inconsistent with law, as it may deem necessary for the exercise and discharge of all the powers and duties of the department, and to adopt such measures and make regulations as are necessary and proper for the enforcement by the state of chs. 93 to 100, which regulations shall have the force of law.
93.55 Chemical and container collection grants.
(1) Definitions. In this section:
(a) "Chemical" means a chemical, including a pesticide, that is used for agricultural purposes.
(b) "Pesticide" has the meaning given in s. 94.67 (25).
(2) Collection grants. The department may award a grant to a county for a chemical and container collection program. A grant under this subsection may not fund more than 75 percent of the cost of a program. Costs eligible for funding include the cost of establishing a collection site for chemicals and chemical containers, the cost of transporting chemical containers to a dealer or distributor for refill and reuse or to a hazardous waste facility, as defined in s. 291.01 (8), and costs associated with the proper use and handling and disposal or recycling of chemicals and chemical containers. Grants shall be paid from the appropriation under s. 20.115 (7) (va).
(2m) Farmer liability. To the extent permitted under federal regulations, a county establishing a chemical and container collection program under sub. (2), in cooperation with the department, shall ensure that a farmer, as defined in s. 102.04 (3), who participates in the program is not liable for chemicals or chemical containers collected under the program after the farmer relinquishes control over the chemicals or chemical containers.
93.57 Household hazardous waste. The department shall administer a grant program to assist municipalities and regional planning commissions in creating and operating local programs for the collection and disposal of household hazardous waste. The department may also provide grants under this section for county, municipal, and regional planning commission programs to collect unwanted prescription drugs. The department may not make a grant under this section in an amount that exceeds 75 percent of the cost of a program. The department shall allocate two-thirds of the funds available from the appropriation account under s. 20.115 (7) (va) in each fiscal year for grants under this section.
The agency considers it necessary to adopt rules needed to establish the bases for grant determinations in order to effectuate the purposes of s. 93.55 and 93.57, Stats.
Estimate of Amount of Time that State Employees will Spend Developing the Rule and of Other Resources Necessary to Develop the Rule
DATCP estimates that it would use approximately 1.0 FTE staff to develop this rule. This includes time required for investigation and analysis, rule drafting, preparing related documents, coordinating advisory committee meetings, holding public hearings and communicating with affected persons and groups. DATCP would use existing staff to develop this rule.
List with Description of all Entities that may be Affected by the Proposed Rule
This rule would assist local governments (counties, municipalities and regional planning commissions) and tribal nations who are eligible to apply for and receive "Clean Sweep" grants. This rule would continue to benefit farmers, homeowners and residential tenants, and businesses that generate limited quantities of hazardous wastes (who qualify as "very small quantity generators") that use the hazardous waste collection events and sites that are funded in part by DATCP's grants.
Summary and Preliminary Comparison with any Existing or Proposed Federal Regulation that is Intended to Address the Activities to be Regulated by the Proposed Rule
The United States Environmental Protection Agency (EPA) administers the Resource Conservation and Recovery Act (RCRA), which includes regulations affecting the collection, movement, and disposal of hazardous agricultural and household waste. EPA has also adopted universal waste management rules under 40 CFR 273. Wisconsin's "Clean Sweep" grantees and vendors must comply with all applicable RCRA and universal waste provisions.
Prescription drugs that are controlled substances are regulated under the federal Controlled Substance Act (21 USC 801) and the Controlled Substances Import and Export Act (21 USC 951). Wisconsin's prescription drug "Clean Sweep" program must comply with these and related federal laws.
In 2009, the U.S. Department of Justice Drug Enforcement Administration proposed a rule (DEA-316A: Disposal of Controlled Substances by Person Not Registered with the Drug Enforcement Administration) seeking options for the safe and responsible disposal of controlled substances in a manner consistent with the Controlled Substances Act (CSA). This federal regulation has not yet been enacted. If it is enacted, the rule may impact "Clean Sweep" prescription drug collection programs themselves, but it would not likely affect this proposed rule, which provides grants for those kinds of programs.
Anticipated Economic Impact of Implementing the Rule (Note if the Rule is Likely to have a Significant Economic Impact on Small Businesses)
DATCP expects the proposed changes to the existing rule to have minimal to no economic impact statewide or locally.
Contact Person
Jane Larson, Clean Sweep program manager, DATCP
Telephone: 608-224-4545
Financial Institutions — Banking
This statement of scope was approved by the governor on May 9, 2012.
Rule No.
Chapter DFI-Bkg 75
Relating to
Payday lending.
Rule Type
Permanent.
Detailed Description of the Objective of the Proposed Rule
As a result of the passage of 2011 Wisconsin Act 32, changes to the existing payday lending rule are necessary to address conflicts that may exist between the current law and the existing rule.
A further objective is to provide clarity and direction for lenders making payday loans, as well as create clear guidance for the Department of Financial Institutions ("DFI"), who is charged with enforcing s. 138.14, Stats.
Description of Existing Policies Relevant to the Rule, New Policies Proposed to be Included in the Rule, and an Analysis of Policy Alternatives
A.) Current policy: The existing rule identifies the statutory citation for the repayment plan as s. 138.14 (11g). As a result of 2011 WI Act 32, the repayment plan requirement was moved from s. 138.14 (11g) to s. 138.14 (11g) (a).
Proposed change: Change the rule to reference the appropriate statutory citation.
B.) Current policy: "Subsequent loan" is used in s. 138.14, but is not currently defined in s. 138.14 or the existing rule. The law permits a customer to repay a payday loan with the proceeds of a subsequent loan, but does not allow the subsequent loan to be repaid with the proceeds of another payday loan (one rollover limit). The repayment of a subsequent loan and the origination of a new payday loan within a 24-hour period is proof of a violation of the statute.
Proposed change: Define "subsequent loan," and include in that definition any loan that is made within 24 hours after the customer pays off a previous loan in full. To not include such loans would permit a loan made one minute after the prior loan was paid to not be considered a subsequent loan.
C.) Current policy: The existing rule excludes from the definition of "payday loan" certain transactions of 6 months or more.
Proposed change: With the passage of 2011 WI Act 32, the definition of "payday loan" was changed, and now only includes transactions with terms of 90 days or less. As a result, a change to the existing rule is needed to eliminate superfluous language.
D.) Current policy: A s. 138.09 lender cannot make a loan of $1,500 or less that has a term of less than 90 days.
Proposed change: With the passage of 2011 WI Act 32, a payday loan is now defined as a transaction that has a term of 90 days or less, not less than 90 days. To be consistent, s. 75.03 (3) (c) should be changed to state "90 days or less" instead of "less than 90 days."
E.) Current policy: A s. 138.09 lender cannot make a loan of $1,500 or less that is open-ended, has a term of less than 90 days, or is payable in anything other than substantially equal monthly or biweekly installments. This includes loans secured by the title to the customer's vehicle.
Proposed change: As a result of 2011 WI Act 32, a s. 138.09 lender can now make a title loan, which is defined as a loan secured by a vehicle (not purchase money) where the original term is not more than 6 months. A change to the existing rule is necessary to allow a s.138.09 lender to make a title loan of $1,500 or less that has a term of less than 90 days, is open-ended, or is payable in anything but substantially equal monthly or biweekly installments.
F.) Current policy: Pursuant to s. 138.14 (12) (b), a payday loan must be limited to the lesser of $1,500 or 35% of a customer's gross monthly income. Some s. 138.14 licensees that are also licensed to make loans under s. 138.09, are making a payday loan and a s. 138.09 loan to the same customer on the same date as a way to avoid the limitations set forth in s. 138.14 (12) (b). For example, if a customer wants a $1,000 payday loan but only qualifies for a $400 payday loan, the licensee will make the customer a $400 payday loan and a $600 s. 138.09 loan. While DFI believes this practice violates Rule s. 75.03 (1), which indicates a licensee shall not engage in conduct that is an attempt to evade or undermine the purpose and intent of s. 138.14, there is no specific rule addressing multiple agreements.
Proposed change: Create a rule that specifically identifies as a prohibited practice the originating of a s. 138.09 loan at the same time, or within the 24 hour period before or after, the licensee originates a payday loan with the same customer.
G.) Current policy: Pursuant to s. 138.14 (12) (a), a customer may not repay a subsequent payday loan with the proceeds of a new payday loan that is made at the same time or within 24 hours after the subsequent loan is paid. To circumvent this law, a lender might originate a s. 138.09 loan, instead of a payday loan, immediately before or after a payday loan has been paid off. While DFI believes this practice violates Rule s. 75.03 (1), which indicates a licensee shall not engage in conduct that is an attempt to evade or undermine the purpose and intent of s. 138.14, there is no specific rule addressing using a s. 138.09 loan to pay a payday loan.
Proposed change: Create a rule that applies to lenders who hold both a loan company and payday lender license, establishing a 24-hour wait period around the pay off of a payday loan.
H.) Current policy: Prior to making a payday loan, a licensee must obtain certain items from the customer to verify the customer's gross monthly income.
Proposed change: The passage of 2011 WI Act 32 indicates a licensee may rely on a consumer report to verify a customer's gross monthly income. As a consumer report may not include the customer's gross monthly income, a rule indicating a licensee using consumer reports must collect the gross monthly income figure from the customer is necessary to comply with the statutory requirement that a loan may not exceed 35% of a customer's gross monthly income.
I.) Current policy: Each loan agreement must include language that informs the borrower of the lender's obligation to offer the borrower an opportunity to repay, in 4 equal installments, the outstanding balance of a loan that the borrower fails to repay in full upon maturity.
Proposed change: As a result of the passage of 2011 WI Act 32, a payday lender is only required to offer the repayment plan if the borrower has not been offered a repayment plan within the 12 month period prior to the maturity date of the loan. A change to the existing rule is needed to indicate the repayment plan will only be offered once in a 12 month period.
J.) Current policy: The repayment plan offer must be delivered to the customer when the lender receives notice of insufficient funds in the customer's account or within 10 days after the maturity date of the loan. Industry has questioned if the repayment plan offer must be issued on the 10th day if the lender presented the check or initiated the electronic fund transfer but does not know by the 10th day if it has cleared.
Proposed change: Change the existing rule to clarify that the repayment plan offer must be issued on or before the 10th day after the maturity date unless the lender is still waiting for notification from the bank as to whether a deposited check has cleared.
K.) Current policy: If a customer fails to repay a payday loan in full at the end of the loan term, the licensee shall offer the customer the opportunity to repay the outstanding balance in 4 equal installments. The current rule describes specifically how the offer of the repayment plan must be given if the customer fails to repay the subsequent loan, but does not describe how the offer must be given if the customer fails to repay the initial loan.
Proposed change: With the passage of 2011 WI Act 32, instead of having to offer a repayment plan after every unpaid loan, the lender is only required to offer a repayment plan if the borrower has not been offered a repayment plan within a 12 month period prior to the maturity of the loan. Because the new statute only requires a repayment plan be offered once within a 12 month period, the rule should be changed to describe how the offer must be made each time it must (by statute) be offered.
L.) Current policy: The due dates of the 4 equal installments on a repayment plan must coincide with the customer's pay period schedule, as verified by items that would have been used to verify income (i.e. - paycheck stub).
Proposed change: With the passage of 2011 WI Act 32, a lender may use a customer's consumer report to verify income. In order to accommodate lenders who use consumer reports, "other documentation" needs to be added to the list of acceptable verification for a customer's pay period schedule. If no documentation regarding the pay period schedule is available, the lender must base the repayment plan installments on a monthly pay schedule.
M.) Current policy: The existing rule indicates the division shall, by December 1st of each year, determine and post the database transaction fee for the following calendar year.
Proposed change: With the passage of 2011 WI Act 32, the division is required to specify, by order or rule, a database transaction fee of no more than $1. The fee has been specified by order, eliminating the need for reference in the rule.
Statutory Authority for the Rule (Including the Statutory Citation and Language)
The statutory authorities for the rule are the following:
Section 138.14 (8) (b), Stats., which states that "[t]he division may promulgate such rules as it considers necessary for the administration of this section, including rules establishing database transaction fees under sub. (14) (h) and other fees considered reasonable and necessary by the division," and
Section 138.14 (14) (h), Stats., which states that "[t]he division shall, by order or rule, specify a database transaction fee of no more than $1 that the database provider shall charge to licensees to cover the costs of developing and implementing the database, and accessing the database to verify that a customer does not have any payday loans with the licensee or others that in combination with a new transaction will create a violation of this section."
Estimate of the Amount of Time that State Employees will Spend to Develop the Rule and of Other Resources Necessary to Develop the Rule
Approximately 120 hours.
Description of all Entities that may be Impacted by the Rule
The proposed rule change would impact lenders licensed s. 138.09, lenders licensed under s. 138.14 lenders, and consumers obtaining loans from such licensees. No impact is expected for business associations, public utility rate payers, or local government units.
Summary and Preliminary Comparison of any Existing or Proposed Federal Regulation that is Intended to Address the Activities to be Regulated by the Rule
DFI is aware that the Consumer Financial Protection Bureau intends to focus some of its resources on payday lending, but is unaware of any currently proposed regulation or rule.
Anticipated Economic Impact of Implementing the Rule
The division anticipates that any economic impact of implementing the rule would be minimal.
Contact Person
Eric Knight
Executive Assistant
Department of Financial Institutions
345 W. Washington Avenue, 5th Floor
P.O. Box 8861
Madison, WI 53708-8861
Tel. 608-267-1718
Natural Resources
Fish, Game, etc., Chs. NR 1—
This statement of scope was approved by the governor on May 2, 2012.
Rule No.
FH-10-12
Relating to
Chapter NR 25 Great Lakes commercial fishing harvest limits.
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