1995 Wisconsin Act 329

329,44 Section 44 . 218.01 (6x) of the statutes is created to read:

218.01 (6x) Prelease agreements. (a) Every prelease agreement shall be in writing, which shall contain all of the agreements of the parties with respect to entering into a consumer lease and shall be signed by both parties.

(b) No prelease agreement shall be binding on a prospective lessee unless all of the following apply:

1. All of the information required to be disclosed in a consumer lease under s. 429.203 (3) and (4) is disclosed in writing to the prospective lessee before the execution of the prelease agreement by the prospective lessee.

2. The prelease agreement contains, directly above the place for the prospective lessee's signature, a notice in substantially the following language in bold-faced capital letters of not less than 10-point type:

NOTICE TO PROSPECTIVE LESSEE

a. THIS IS A BINDING PRELEASE AGREEMENT. BY SIGNING THIS PRELEASE AGREEMENT, YOU WILL BECOME OBLIGATED TO ENTER INTO AN AGREEMENT WITH THE PROSPECTIVE LESSOR TO LEASE THE MOTOR VEHICLE DESCRIBED IN THIS PRELEASE AGREEMENT WHEN IT IS AVAILABLE AND READY TO BE DELIVERED TO YOU, UPON LEASE TERMS DISCLOSED IN THIS PRELEASE AGREEMENT OR IN THE ATTACHED DISCLOSURE STATEMENT, IF ANY.

b. DO NOT SIGN THIS PRELEASE AGREEMENT BEFORE YOU READ IT, INCLUDING THE WRITING ON THE REVERSE SIDE.

c. DO NOT SIGN THIS IF IT CONTAINS ANY BLANK SPACES.

d. YOU ARE ENTITLED TO AN EXACT COPY OF ANY AGREEMENT YOU SIGN.

(c) An exact copy of the prelease agreement shall be furnished by the prospective lessor to the prospective lessee at the time that the prospective lessee signs the prelease agreement. The prospective lessee's copy of the prelease agreement shall contain the signature of the prospective lessor identical with the signature on the original prelease agreement. No prelease agreement shall be signed in blank except that a detailed description of the motor vehicle, including the serial or identification number, that is not available at the time of execution of the prelease agreement may be omitted.

(d) A prospective lessor may cancel a prelease agreement that, with regard to the lease terms disclosed in the prelease agreement, is contingent upon approval of the prospective lessee's credit by a sales finance company to whom the prospective lessor intends to assign the consumer lease, if the prelease agreement contains a provision requiring the prospective lessor to give the prospective lessee written notice of such cancellation within 10 business days of execution of the prelease agreement and the notice is given to the prospective lessee.

(e) No prelease agreement may contain a clause which, upon nonacceptance of the motor vehicle by the prospective lessee, would subject the prospective lessee to a penalty greater than 5% of the capitalized cost of the vehicle.

329,45 Section 45 . 218.01 (7b) of the statutes, as affected by 1995 Wisconsin Act 27, is amended to read:

218.01 (7b) (title) Purchase or lease of motor vehicle by minor. No minor shall purchase or lease any motor vehicle unless the minor, at the time of purchase or lease, submits to the seller or lessor a statement verified before a person authorized to administer oaths and made and signed by either parent of the purchaser or lessee, if such parent has custody of the minor or, if neither parent has custody, then by the person having custody, setting forth that the purchaser or lessee has consent to purchase or lease the vehicle. The signature on the statement shall not impute any liability for the purchase price of the motor vehicle or for any payments under the consumer lease to the consenting person. The statement shall not adversely affect any other arrangement for the assumption of liability for the purchase price or any lease payments which the consenting person may make. The If a motor vehicle is purchased by a minor, the signed statement shall accompany the application for a certificate of title and shall be filed by the department of transportation with the application. Failure to obtain the consent or to forward it, together with the application for a certificate of title in the event of the purchase of a motor vehicle, shall not void the contract of sale or consumer lease of a motor vehicle in the hands of an innocent holder, without notice, for value and in the ordinary course of business. Any person who sells or leases a motor vehicle to a minor with knowledge of such fact without procuring such a statement may be fined not more than $200 or imprisoned not more than 6 months or both.

329,46 Section 46 . 218.01 (9) (b) of the statutes is amended to read:

218.01 (9) (b) Any retail buyer, lessee or prospective lessee suffering pecuniary loss because of a violation by a licensee of sub. (3) (a) 4., 5., 6., 8., 9., 10., 11., 18., 25. or 31. may recover damages for the loss in any court of competent jurisdiction together with costs, including reasonable attorney fees.

329,47 Section 47 . 218.04 (5) (a) 5. of the statutes is amended to read:

218.04 (5) (a) 5. The licensee or any officer or employe of it has violated chs. 421 to 427 and 429.

329,47m Section 47m. 341.145 (4) of the statutes is amended to read:

341.145 (4) Each personalized registration plate issued shall be reserved for the recipient or, in the case of a leased vehicle, for the lessee in succeeding registration periods and shall not be duplicated for issuance to any other person if the recipient or lessee maintains the plate, unless the recipient or, in the case of a leased vehicle, the lessee authorizes the issuance of the plate to another person. If the recipient or, in the case of a leased vehicle, the lessee does not maintain the plate for 2 successive years which are not plate issuance years or if the recipient or lessee does not specifically request reissuance of the personalized registration plate by the end of the month in which the plate expires in a plate issuance year, the department may issue the personalized registration plate to another applicant. Registration plate numbers issued as special numbers prior to January 1, 1979, will be reserved for issuance as personalized registration plates in the same manner as prescribed for personalized registration plates in this section.

329,48 Section 48 . 344.51 (title) of the statutes is amended to read:

344.51 (title) Financial responsibility for domestic rented or leased vehicles.

329,49 Section 49 . 344.51 (1) of the statutes is amended to read:

344.51 (1) No person may for compensation rent or lease any motor vehicle to be operated by or with the consent of the person renting or leasing the vehicle unless there is filed with the department a good and sufficient bond or policy of insurance issued by an insurer authorized to do an automobile liability insurance or surety business in this state. The bond, policy or certificate shall provide that the insurer which issued it will be liable for damages caused by the negligent operation of the motor vehicle in the amounts set forth in s. 344.01 (2) (d). No person complying with this subsection, and no person acquiring an interest in any contract for the rental or leasing of a motor vehicle for which any other person has complied with this subsection, is liable for damages caused by the negligent operation of the motor vehicle by another person.

329,50 Section 50 . 344.51 (2) of the statutes is amended to read:

344.51 (2) Any person failing to comply with this section is directly liable for all damages caused by the negligence of the person operating such rented or leased vehicle to the extent that such liability could have been established if this section had been complied with, but such liability may not exceed the limits set forth in s. 344.01 (2) (d) with respect to the acceptable limits of liability when furnishing proof of financial responsibility.

329,51 Section 51 . 409.201 of the statutes is amended to read:

409.201 General validity of security interest. Except as otherwise provided by chs. 401 to 411 a security agreement is effective according to its terms between the parties, against purchasers of the collateral and against creditors. Nothing in this chapter validates any charge or practice illegal under any statute or regulation thereunder governing usury, small loans, retail instalment sales, or the like, or under chs. 421 to 427 and 429, or extends the application of any such statute or regulation to any transaction not otherwise subject thereto.

329,52 Section 52 . 409.203 (5) of the statutes is amended to read:

409.203 (5) A transaction, although subject to this chapter, is also subject to chs. 138, 421 to 427, and 429 and s. 182.025, or any other similar statute which may be applicable to the particular transaction, and in the case of conflict between this chapter and any such statute, such statute controls. Failure to comply with any applicable statute has only the effect which is specified therein.

329,53 Section 53 . 421.103 (2) of the statutes is amended to read:

421.103 (2) Unless terms used in chs. 421 to 427 are defined by particular provisions of chs. 421 to 427, they shall have the meaning given them in chs. 401 to 411 and 429, if they are defined in chs. 401 to 411 and 429.

329,54 Section 54 . 421.201 (5) of the statutes is amended to read:

421.201 (5) Subchapters I and II of ch. 425, relating to creditors' remedies, including applicable penalties, apply to actions or other proceedings brought in this state to enforce rights arising from consumer transactions or extortionate extensions of credit, wherever made, but conduct, action or proceedings to recover collateral or goods subject to a motor vehicle consumer lease shall be governed by the law of the state where the collateral is or goods subject to a motor vehicle consumer lease are located at the time of its recovery unless the collateral is or goods subject to a motor vehicle consumer lease are owned by a Wisconsin resident, who has removed it the collateral or goods from this state only for purposes of transportation to or use in the resident's employment or for temporary periods which do not exceed 15 days.

329,55 Section 55 . 421.202 (6) of the statutes is amended to read:

421.202 (6) Consumer credit transactions in which the amount financed exceeds $25,000, motor vehicle consumer leases in which the total lease obligation exceeds $25,000 or other consumer transactions in which the cash price exceeds $25,000;

329,56 Section 56 . 421.202 (7) of the statutes is amended to read:

421.202 (7) Transactions subject to ch. 428; or

329,57 Section 57 . 421.202 (8) of the statutes is amended to read:

421.202 (8) Transactions in securities accounts or securities transactions by or with a broker-dealer, as defined in s. 551.02 (3), licensed under ch. 551.; or

329,58 Section 58 . 421.202 (9) of the statutes is created to read:

421.202 (9) Leases of motor vehicles that are not motor vehicle consumer leases under s. 421.301 (25m).

329,59 Section 59 . 421.301 (20) (intro.) of the statutes is amended to read:

421.301 (20) (intro.) “Finance charge" means the sum of all charges, payable directly or indirectly by the customer as an incident to or as a condition of the extension of credit, whether paid or payable by the customer, the creditor or any other person on behalf of the customer to the creditor or to a 3rd party unless the creditor had no notice or knowledge of the charges paid or payable to the 3rd party. The term does not include any charge with respect to a motor vehicle consumer lease. The term includes the following types of charges to the extent they are not permitted additional charges under s. 422.202 or , delinquency charges (under s. 422.203 ) or deferral charges (under s. 422.204):

329,60 Section 60 . 421.301 (25m) of the statutes is created to read:

421.301 (25m) “Motor vehicle consumer lease" has the meaning given for “consumer lease" in s. 429.104 (9).

329,61 Section 61 . 421.301 (35) of the statutes is amended to read:

421.301 (35) “Precomputed" with respect to a consumer credit transaction means a consumer credit transaction, other than a motor vehicle consumer lease, in which debt is expressed as a single sum comprised of the amount financed and the finance charge computed in advance.

329,62 Section 62 . 421.301 (43m) of the statutes is created to read:

421.301 (43m) “Total lease obligation" means the sum of all of the following with respect to a motor vehicle consumer lease:

(a) All scheduled periodic payments under the lease.

(b) Capitalized cost reduction, as defined in s. 429.104 (6).

329,63 Section 63 . 422.201 (4) of the statutes is repealed.

329,64 Section 64 . 422.201 (7) (intro.) and (a) of the statutes are amended to read:

422.201 (7) (intro.) Subject to classifications and differentiations the merchant may reasonably establish, the merchant may make the same finance charge on all amounts financed within a specified range. A finance charge so made does not violate sub. (2), or (3) or (4) as the case may be if:

(a) When applied to the median amount within each range, it does not exceed the maximum permitted by sub. (2), or (3) or (4) as the case may be; and

329,65 Section 65 . 422.201 (8), (9) and (12) of the statutes are amended to read:

422.201 (8) That portion of the finance charge consisting of an amount equal to a discount of 5% or less of the stated price which is offered to induce payment in full within a stated period of time in connection with a sale for agricultural purposes or a sale of particular goods and services for which credit is not otherwise available from the merchant shall not be included in the finance charge for the purpose of determining the maximum rate of finance charge under sub. (2), or (3) or (4) with respect to a customer who does not pay in full within such time.

(9) Notwithstanding sub. (2), or (3) or (4), a merchant may contract for and receive a minimum finance charge with respect to a transaction other than one pursuant to an open-end credit plan, of not more than $5 when the amount financed does not exceed $75, or $7.50 when the amount financed exceeds $75.

(12) Except as provided in sub. (4), this This section does not apply to a consumer credit transaction primarily for an agricultural purpose if the transaction occurs on or after April 6, 1980.

329,66 Section 66 . 422.202 (1) (b) (intro.) of the statutes is amended to read:

422.202 (1) (b) (intro.) Charges or premiums for insurance against loss of or damage to property in which the creditor takes a security interest or to property leased under a motor vehicle consumer lease or against liability arising out of the ownership or use of property in which the creditor takes a security interest or of property leased under a motor vehicle consumer lease, if all of the following conditions are met:

329,67 Section 67 . 422.202 (1) (e) of the statutes is created to read:

422.202 (1) (e) With respect to a motor vehicle consumer lease, any reasonable fee or charge that is conspicuously disclosed in writing to the prospective lessee before execution of the motor vehicle consumer lease, is agreed upon by the lessor and lessee and is not prohibited by chs. 421 to 427 and 429.

329,68 Section 68 . 422.207 (1) of the statutes is amended to read:

422.207 (1) With respect to a consumer credit transaction the parties may, to the extent not prohibited by chs. 421 to 427 and 429, agree that the customer will perform certain duties with respect to preserving or insuring collateral or goods subject to a motor vehicle consumer lease, if such duties are reasonable in relation to the risk of loss of or damage to the collateral or goods. If the customer fails to so perform the creditor may, if authorized by the agreement, pay for the performance of such duties on behalf of the customer. The amount paid may be added to the unpaid balance of the customer's obligation, if, in the absence of performance, the merchant has made all expenditures on behalf of the customer in good faith and in a commercially reasonable manner and except in the case of a transaction for an agricultural purpose where the collateral is perishable and threatens to decline speedily in value, the merchant has given the customer written notice of the nonperformance and reasonable opportunity after such notice to so perform.

329,69 Section 69 . 422.208 of the statutes is amended to read:

422.208 Right to prepay. Subject to s. 422.209 and, with respect to a motor vehicle consumer lease, s. 429.207, the customer may prepay in full or in any part, at any time without penalty, the unpaid balance of any consumer credit transaction other than a transaction secured by a first lien mortgage or equivalent security interest on real estate with an original term of 10 years or more and on which the annual percentage rate disclosed pursuant to subch. III is 10% or less.

329,70 Section 70 . 422.303 (3) (intro.) of the statutes is amended to read:

422.303 (3) (intro.) Except as provided in sub. (4), every writing evidencing the customer's obligation to pay under a consumer credit transaction other than one pursuant to an open-end credit plan or a motor vehicle consumer lease, shall contain immediately above or adjacent to the place for the signature of the customer, a clear, conspicuous, printed or typewritten notice in substantially the following language:

329,71 Section 71 . 422.413 (1) of the statutes is amended to read:

422.413 (1) Except as provided in subs. (2) and (2g), no term of a writing evidencing a consumer credit transaction may provide for any charges as a result of default by the customer other than reasonable expenses incurred in the disposition of collateral or goods subject to a motor vehicle consumer lease and such other charges as are specifically authorized by chs. 421 to 427 and 429.

329,72 Section 72 . 422.417 (2) of the statutes is amended to read:

422.417 (2) With respect to a consumer lease, except as otherwise provided in s. 429.205 with respect to a motor vehicle consumer lease, a lessor may not take a security interest in any property of owned or leased by the customer other than the leased goods to secure the lessor's obligations under the lease. This subsection does not prohibit a security interest in a cash security deposit for a consumer lease of motor vehicles or agricultural equipment.

329,73 Section 73 . 424.201 (1) and (2) of the statutes are amended to read:

424.201 (1) Insurance issued as an isolated transaction on the part of the insurer not related to an agreement or plan for insuring customers of the creditor; or

(2) Insurance indemnifying the creditor against loss due to the customer's default.; or

329,74 Section 74 . 424.201 (3) of the statutes is created to read:

424.201 (3) With respect to a motor vehicle consumer lease, a lessor's waiver of its contractual right to hold the lessee liable for any or all of the gap amount, as defined in s. 429.104 (12), if the waiver is granted without a separate charge.

329,75 Section 75 . 424.301 (1) (intro.) of the statutes is amended to read:

424.301 (1) (intro.) A creditor may not contract for a separate charge or receive a separate charge for insurance against loss of or damage to property in which the creditor holds a security interest or to property leased under a motor vehicle consumer lease unless all of the following conditions are met:

329,76 Section 76 . 425.106 (1) (intro.) of the statutes is amended to read:

425.106 (1) (intro.) Except to the extent that the merchant has a valid security interest which is permitted by chs. 421 to 427 and 429 or has a lien under ch. 779 in such property, or where the transaction is for medical or legal services and there has been no finance charge actually imposed, the following property of the customer shall be exempt from levy, execution, sale, and other similar process in satisfaction of a judgment for an obligation arising from a consumer credit transaction:

329,77 Section 77 . 425.107 (4) of the statutes is amended to read:

425.107 (4) Any charge or practice expressly permitted by chs. 421 to 427 and 429 is not in itself unconscionable but even though a practice or charge is authorized by chs. 421 to 427 and 429, the totality of a creditor's conduct may show that such practice or charge is part of an unconscionable course of conduct.

329,78 Section 78 . 426.104 (1) of the statutes is amended to read:

426.104 (1) In addition to other powers granted by chs. 421 to 427 and 429, the administrator within the limitations provided by law shall:

(a) Receive and act on complaints, take action designed to obtain voluntary compliance with chs. 421 to 427 and 429, commence administrative proceedings on his or her own initiative and commence civil actions solely through the department of justice;