3. If a county has enacted an ordinance regulating payday lenders that is in effect on the effective date of this subdivision .... [LRB inserts date], the ordinance may continue to apply and the county may continue to enforce the ordinance, but only if the ordinance is at least as restrictive as the provisions of par. (b).
4. Notwithstanding the provisions of subd. 3., if a payday lender that is doing business on the effective date of this subdivision .... [LRB inserts date], from a location that does not comply with the provisions of par. (b), the payday lender may continue to operate from that location notwithstanding the provisions of par. (b).
405,5
Section
5. 62.23 (7) (hi) of the statutes is created to read:
62.23 (7) (hi) Payday lenders. 1. In this paragraph:
a. "Licensee" has the meaning given in s. 138.14 (1) (i).
b. "Payday lender" means a business, owned by a licensee, that makes payday loans.
c. "Payday loan" has the meaning given in s. 138.14 (1) (k).
2. Except as provided in subds. 3., 4., and 5., no payday lender may operate in a city unless it receives a permit to do so from the city council, and the city council may not issue a permit to a payday lender if any of the following applies:
a. The payday lender would be located within 1,500 feet of another payday lender.
b. The payday lender would be located within 150 feet of a single-family or 2-family residential zoning district.
3. A city may regulate payday lenders by enacting a zoning ordinance that contains provisions that are more strict than those specified in subd. 2.
4. If a city has enacted an ordinance regulating payday lenders that is in effect on the effective date of this subdivision .... [LRB inserts date], the ordinance may continue to apply and the city may continue to enforce the ordinance, but only if the ordinance is at least as restrictive as the provisions of subd. 2.
5. Notwithstanding the provisions of subd. 4., if a payday lender that is doing business on the effective date of this subdivision .... [LRB inserts date], from a location that does not comply with the provisions of subd. 2., the payday lender may continue to operate from that location notwithstanding the provisions of subd. 2.
73.0301 (1) (d) 6. A license or certificate of registration issued by the department of financial institutions, or a division of it, under ss. 138.09, 138.12, 138.14, 217.06, 218.0101 to 218.0163, 218.02, 218.04, 218.05, 224.72, 224.725, 224.93 or under subch. IV of ch. 551.
405,7
Section
7. 138.04 of the statutes is amended to read:
138.04 Legal rate. The rate of interest upon the loan or forbearance of any money, goods or things in action shall be $5 upon the $100 for one year and according to that rate for a greater or less sum or for a longer or a shorter time; but parties may contract for the payment and receipt of a rate of interest not exceeding the rate allowed in ss. 138.041 to 138.056, 138.09 to 138.12 138.14, 218.0101 to 218.0163, or 422.201, in which case such rate shall be clearly expressed in writing.
405,8
Section
8. 138.09 (1a) of the statutes is created to read:
138.09 (1a) This section does not apply to any of the following:
(a) Banks, savings banks, savings and loan associations, trust companies, credit unions
, or any of their affiliates .
(b) Payday loans made under s. 138.14.
405,9
Section
9. 138.09 (1m) (a) of the statutes is amended to read:
138.09 (1m) (a) Before any person may do business under this section or, charge the interest authorized by sub. (7) and before any creditor other than a bank, savings bank, savings and loan association or credit union may, or assess a finance charge on a consumer loan in excess of 18% per year, that person shall first obtain a license from the division. Applications for a license shall be in writing and upon forms provided for this purpose by the division. An applicant at the time of making an application shall pay to the division a nonrefundable $300 fee for investigating the application and a $500 annual license fee for the period terminating on the last day of the current calendar year. If the cost of the investigation exceeds $300, the applicant shall upon demand of the division pay to the division the amount by which the cost of the investigation exceeds the nonrefundable fee.
405,10
Section
10. 138.09 (3) (e) 1. g. of the statutes is created to read:
138.09 (3) (e) 1. g. A payday loan licensee under s. 138.14.
405,11
Section
11. 138.09 (3) (f) of the statutes is amended to read:
138.09 (3) (f) Every licensee shall make an annual report to the division for each calendar year on or before March 15 of the following year. The report shall cover include business transacted by the licensee under the provisions of this section and shall give all reasonable and relevant information that the division may require. The reports shall be made upon forms furnished in the form and manner prescribed by the division and shall be signed and verified by the oath or affirmation of the licensee if an individual, one of the partners if a partnership, a member or manager if a limited liability company or an officer of the corporation or association if a corporation or association. Any licensee operating under this section shall keep the records affecting loans made pursuant to this section separate and distinct from the records of any other business of the licensee.
405,12
Section
12. 138.10 (2m) of the statutes is amended to read:
138.10 (2m) Pawnbroking by licensed lenders. The division of banking may promulgate rules regulating the conduct of pawnbroking by persons licensed under s. 138.09 or 138.14.
405,13
Section
13. 138.10 (15) of the statutes is amended to read:
138.10 (15) Exception. This section does not apply to any person that is licensed under s. 138.09 or 138.14.
405,14
Section
14. 138.14 of the statutes is created to read:
138.14 Payday loans. (1) Definitions. In this section:
(a) "Affiliate" means, with respect to a person, another person who owns or controls, is owned or controlled by, or is under common ownership or control with, such person. In this paragraph "control" means any of the following:
1. For a corporation, direct or indirect ownership of, or the right to control, 10 percent or more of the voting shares of the corporation, or the ability of a person to elect a majority of the directors or otherwise effect a change in policy.
2. For any entity other than a corporation, the ability to change the active or passive principals of the organization.
(b) "Check" has the meaning given in s. 403.104 (6).
(bm) "Customer" means an individual who enters into a payday loan with a licensee.
(c) "Database" means the statewide database described in sub. (14).
(d) "Database provider" means a 3rd-party provider with whom the department contracts to operate the database or, if the division elects to operate the database, the division.
(e) "Department" means the department of financial institutions.
(f) "Division" means the division of banking.
(g) "Financial establishment" means any organization that is authorized to do business under state or federal law and that holds a demand deposit, savings deposit, or other asset account belonging to an individual.
(h) "General order" means an order that is not a special order.
(i) "Licensee" means a person holding a license issued by the division under sub. (5).
(j) "Maturity date" means the date specified when originating a payday loan on which the loan is required to be paid in full.
(k) "Payday loan" means any of the following:
1. A transaction between an individual with an account at a financial establishment and another person, including a person who is not physically located in this state, in which the person agrees to accept from the individual one or more checks, to hold the check or checks for a period of time before negotiating or presenting the check or checks for payment, and to loan to the individual,
for a term of 90 days or less, before negotiating or presenting the check or checks for payment, an amount that is agreed to by the individual.
2. A transaction between an individual with an account at a financial establishment and another person, including a person who is not physically located in this state, in which the person agrees to accept the individual's authorization to initiate one or more electronic fund transfers from the account, to wait a period of time before initiating the electronic fund transfer or transfers, and to loan to the individual,
for a term of 90 days or less, before initiating the electronic fund transfer or transfers, an amount that is agreed to by the individual.
(L) "Special order" means an order against a person.
(2) License required. A person may not originate or service a payday loan involving a Wisconsin resident without first having obtained from the division a license under sub. (5) for each place of business at which the person originates or services payday loans involving Wisconsin residents. Such a license is required for, and this section applies to, all payday loans made to a Wisconsin resident, regardless of whether the loan is made by face-to-face contact, mail, telephone, Internet, or any other means.
(3) Exemptions. This section does not apply to banks, savings banks, savings and loan associations, trust companies, credit unions
, or any of their affiliates .
(4) Applications; fees; bond. (a) 1. Application for licenses under sub. (5) shall be made to the division in writing in the form and manner prescribed by the division and shall include all of the following:
a. Except as provided in subd. 3., if the applicant is an individual, the applicant's social security number.
b. If the applicant is not an individual, the applicant's federal employer identification number.
c. A statement signed by or on behalf of the applicant that acknowledges that the applicant is subject to the debt collection requirements under ch. 427 with respect to payday loans.
2. The division may not disclose any information received under subd. 1. a. or b. to any person except as follows:
a. The division may disclose information under subd. 1. a. or b. to the department of revenue for the sole purpose of requesting certifications under s. 73.0301.
b. The division may disclose information under subd. 1. a. to the department of workforce development in accordance with a memorandum of understanding under s. 49.857.
3. If an applicant who is an individual does not have a social security number, the applicant, as a condition of applying for a license, shall submit a statement made or subscribed under oath or affirmation to the division that the applicant does not have a social security number. The form of the statement shall be prescribed by the department of workforce development. Any license issued in reliance upon a false statement submitted by an applicant is invalid.
(b) At the time of making application, an applicant for a license shall pay to the division a nonrefundable $300 fee for investigating the application and a $500 annual license fee. If the cost of the investigation exceeds $300, the applicant shall upon demand of the division pay to the division the amount by which the cost of the investigation exceeds the nonrefundable fee.
(c) The division shall require any applicant or licensee to file and maintain in force a bond in a sum not to exceed $5,000 for each place of business at which the applicant or licensee makes payday loans to a Wisconsin resident. The bond shall be in a form prescribed by and acceptable to the division.
(5) Licenses. (a) Upon the filing of an application under sub. (4) and the payment of the required fees, the division shall investigate the relevant facts. Except as provided in par. (b), if the division finds that the character and general fitness and the financial responsibility of the applicant, and the members thereof if the applicant is a partnership, limited liability company, or association, and the officers and directors thereof if the applicant is a corporation, warrant the belief that the business will be operated in compliance with this section, the division shall issue a license to the applicant. If the division does not make such finding, the division shall deny the application.
(b) The division may not issue a license to an applicant if any of the following applies:
1. The applicant fails to provide any information required under sub. (4) (a).
2. The department of revenue certifies under s. 73.0301 that the applicant is liable for delinquent taxes.
3. The applicant fails to comply, after appropriate notice, with a subpoena or warrant issued by the department of workforce development or a county child support agency under s. 59.53 (5) and related to paternity or child support proceedings.
4. The applicant is delinquent in making court-ordered payments of child or family support, maintenance, birth expenses, medical expenses, or other expenses related to the support of a child or former spouse, as provided in a memorandum of understanding entered into under s. 49.857.
(c) A license shall remain in force and effect until suspended or revoked in accordance with this section or surrendered by the licensee, and a licensee shall, on or before each December 10, pay to the division the annual license fee for the next succeeding calendar year.
(d) A license is not assignable and permits operation under it only at or from the place of business specified in the license.
(e) A licensee shall conspicuously post a license at the place of business where the licensee makes payday loans, or if conducting business through the Internet, on the licensee's Web site so that the license is easily viewed by a consumer.
(6) Relocation; other business. (a) Whenever a licensee changes the address of its place of business to another location within the same city, village, or town, the licensee shall give written notice thereof, in a form and manner prescribed by the division, to the division within 10 business days of the relocation and the division shall replace the original license with an amended license showing the new address. No change in the place of business of a licensee to a different city, village, or town is permitted under the same license.
(b) 1. Except as provided in subd. 2., a licensee may conduct, and permit others to conduct, at the place of business specified in its license, one or more of the following businesses not subject to this section:
a. A currency exchange under s. 218.05.
b. A seller of checks business under ch. 217.
c. A loan business under s. 138.09.
d. A sales finance company under ss. 218.0101 to 218.0163.
2. A licensee may not sell merchandise or conduct other business at the place of business specified in the license unless written authorization is granted to the licensee by the division.
(7) Records; reports. (a) Except as provided in par. (b), a licensee shall keep such books and records in the licensee's place of business that, in the opinion of the division, will enable the division to determine compliance with this section. A licensee shall preserve the records of final entry used in such business for a period of at least 2 years after the making of any loan recorded therein.
(b) A licensee may keep the books and records specified in par. (a) at a single location inside or outside of this state if the books and records are kept at a place of business licensed under this section. A licensee shall organize the books and records by the place of business where the records originated.
(c) A licensee shall keep the books and records affecting loans made pursuant to this section separate and distinct from the records of any other business of the licensee.
(d) A licensee shall make an annual report to the division for each calendar year on or before March 15 of the following year. The report shall include business transacted by the licensee under this section and shall give all reasonable and relevant information that the division may require, including the information required for the division's reports under par. (e). The reports shall be made in the form and manner prescribed by the division.
(e) The division shall submit an annual report to the appropriate standing committees of the legislature in the manner provided under s. 13.172 (3) that includes all of the following:
1. The number of payday loans made by all licensees during the preceding year.
2. The average principal amount for all payday loans made during the preceding year.
3. The average interest, fees, and other charges for all payday loans made during the preceding year.
4. Based on subd. 3., the average annual percentage rate for all payday loans made during the preceding year.
5. The number of payday loans made during the preceding year that were paid in full on the maturity date.
6. The number of payday loans made during the preceding year that resulted in repayment under sub. (11g)
(a) .
