2023 Wisconsin Act 267

267,5 Section 5. 138.09 (1a) of the statutes is renumbered 138.09 (1c) (a).

267,6 Section 6. 138.09 (1c) (a) 3., 4., 5. and 6. of the statutes are created to read:

138.09 (1c) (a) 3. An individual or entity who, in connection with a securitization, private placement, collateral financing, or other type of investment or financing transaction, lends against or purchases consumer loans or any portion of the outstanding balances of consumer loans, if the following apply:

a. The consumer loans are serviced by a licensee under this section, either directly or through a contracted party.

b. The books and records for the consumer loans are maintained by a licensee under this section.

4. Special purpose vehicles.

5. Collection agencies licensed under s. 218.04.

6. Payment processors.

267,7 Section 7 . 138.09 (1c) (b) of the statutes is created to read:

138.09 (1c) (b) This section applies to any person who takes an assignment for sale, in whole or in part, of a consumer loan with a finance charge in excess of 18 percent per year, without regard to whether the loan was originally made by an entity listed under par. (a) 1.

267,8 Section 8 . 138.09 (1d) of the statutes is renumbered 138.09 (1g) (intro.) and amended to read:

138.09 (1g) (intro.) In this section, “ division":

(c) “Division” means the division of banking.

267,9 Section 9 . 138.09 (1g) (a), (b), (d), (e), (f), (g), (h) and (i) of the statutes are created to read:

138.09 (1g) (a) “Business” includes any of the following activities:

1. To make a consumer loan that has a finance charge in excess of 18 percent per year. A person makes a consumer loan within the meaning of this section if the person is named as the lender in the consumer loan agreement.

2. To take an assignment, in whole or in part, of a consumer loan in which a customer is being assessed a finance charge in excess of 18 percent per year.

3. Except as provided in sub. (3) (cm), to directly collect payments from, or enforce rights against, a customer relating to a consumer loan in which a customer is being assessed a finance charge in excess of 18 percent per year.

(b) “Consumer loan” means a loan made by any person to a customer that is payable in installments or for which a finance charge is or may be imposed, and includes transactions pursuant to an open-end credit plan, as defined in s. 421.301 (27), other than a seller credit card, as defined in s. 421.301 (41).

(d) “Licensee," except in sub. (3) (e) 1. g., means a person licensed under this section.

(e) “Nationwide multistate licensing system and registry” has the meaning given in s. 224.35 (1g) (b).

(f) “Payment processor” means a person who facilitates the purchase of, or payment of a bill for, a good or service through a clearance and settlement system by agreement with the licensee. Payment processor does not include a collection agency, as defined in s. 218.04 (1) (a), a debt collector, as defined in s. 427.103 (3), or any person who directly performs any of the activities set forth in par. (a).

(g) Except in sub. (9) (a), “service” or “servicing” means collecting or receiving payments of principal, interest, and other amounts on consumer loans and undertaking other tasks related to the administration of consumer loans, including negotiating a modification or extension of consumer loans, under the direction and control of the licensee.

(h) “Special purpose vehicle” means an entity that, in connection with a securitization, private placement, collateral financing, or other type of investment or financing transaction, is administered by a duly chartered financial institution under a management agreement for the purpose of purchasing, making loans against, or pooling receivables, general intangibles, and other financial assets, including consumer loans or the outstanding balances of consumer loans.

(i) “Unique identifier” has the meaning given in s. 224.35 (1g) (e).

267,10 Section 10. 138.09 (1m) (a) of the statutes is renumbered 138.09 (1m) (a) 1. and amended to read:

138.09 (1m) (a) 1. Before any person may do business under this section, charge the interest authorized by sub. (7), or assess a finance charge on a consumer loan in excess of 18 percent per year, that person shall first obtain a license from the division.

2. Applications for a license shall be in writing and upon forms provided for this purpose made in the form and manner prescribed by the division.

3. 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.

267,11 Section 11 . 138.09 (1m) (b) 1. (intro.) of the statutes is amended to read:

138.09 (1m) (b) 1. (intro.) Except as provided in par. (c), an application under par. (a) 2. for a license shall contain the following:

267,12 Section 12 . 138.09 (1m) (b) 2. c. of the statutes is created to read:

138.09 (1m) (b) 2. c. The division may disclose information to the nationwide multistate licensing system and registry as provided in s. 224.35.

267,13 Section 13 . 138.09 (1m) (d) and (e) of the statutes are created to read:

138.09 (1m) (d) The division shall utilize the nationwide multistate licensing system and registry, and the provisions of s. 224.35 shall apply, with respect to applicants and licensees under this section.

(e) An applicant or licensee under this section shall register with, and maintain a valid unique identifier issued by, the nationwide multistate licensing system and registry.

267,14 Section 14. 138.09 (2) of the statutes is amended to read:

138.09 (2) The division may also require the applicant to file with the division, and to maintain in force, a bond in which the applicant shall be the obligor, in a sum not to exceed $5,000 with one or more corporate sureties licensed to do business in Wisconsin, whose liability as such sureties shall not exceed the sum of $5,000 in the aggregate, to be approved by the division and filed in a form and manner acceptable to the division, and such bond shall run to the state of Wisconsin for the use of the state and of any person or persons who may have a cause of action against the obligor of the bond under the provisions of this section. Such bonds shall be conditioned that the obligor will conform to and abide by each and every provision of this section, and will pay to the state or to any person or persons any and all moneys that may become due or owing to the state or to such person or persons from the obligor under and by virtue of the provisions of this chapter.

267,15 Section 15. 138.09 (3) (b) of the statutes is repealed and recreated to read:

138.09 (3) (b) A license may be renewed or reinstated as provided in s. 224.35 (7). A license that is not renewed or reinstated by the end of the reinstatement period provided in s. 224.35 (7) shall be deemed to have expired on December 31 of the year immediately preceding the reinstatement period, unless the initial license date is between November 1 and December 31, in which instance the initial license term shall run through December 31 of the following year.

267,16 Section 16. 138.09 (3) (c) of the statutes is amended to read:

138.09 (3) (c) Such A license shall not be assignable and shall permit operation under it only at or from the location specified in the license at which location all loans shall be consummated, but this provision shall not prevent the licensee from making loans under this section which are not initiated or consummated by face to face contact away from the licensed location if permitted by the division in writing or by rule or at an auction sale conducted or clerked by a licensee.

267,17 Section 17. 138.09 (3) (cm) of the statutes is created to read:

138.09 (3) (cm) Notwithstanding par. (c), a licensee may contract with a person that is not licensed under this section to service a consumer loan on behalf of the licensee. The licensee is responsible for violations of this section committed by the contracted party with respect to the servicing of that loan, except where the contracted party holds a license issued by the division that would subject it to regulatory discipline for violations of this section. The licensee's responsibility for the contracted party, as set forth in this paragraph, does not create a private right of action against the licensee.

267,18 Section 18. 138.09 (3) (d) of the statutes is amended to read:

138.09 (3) (d) A separate license shall be required for each place of business maintained by the licensee. Whenever a licensee shall change the address of its place of business to another location within the same city, village or town the licensee shall at once give written notice thereof to the division, which shall replace the original license with an amended license showing the new address, provided the location meets with the requirements of par. (e) or to the nationwide multistate licensing system and registry, as directed by the division, in a form and manner acceptable to the division. No change in the place of business of a licensee to a different city, village or town shall be permitted under the same license.

267,19 Section 19 . 138.09 (3) (e) 1. a. and f. of the statutes are amended to read:

138.09 (3) (e) 1. a. A business engaged in making loans for business or agricultural purposes or exceeding $25,000 in principal amount, except that all such loans having terms of 49 months or more are subject to sub. (7) (gm) 2. or 4 .

f. A seller of checks money transmitter business under ch. 217.

267,20 Section 20. 138.09 (3) (e) 3. of the statutes is created to read:

138.09 (3) (e) 3. 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.

267,21 Section 21. 138.09 (3) (f) of the statutes is amended to read:

138.09 (3) (f) Every Each 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 the provisions of this section and shall give all reasonable and relevant information that the division may require. The reports shall be made in the form and manner prescribed by the division. 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 and submit financial statements as provided in s. 224.35 (8).

267,22 Section 22. 138.09 (3) (g) of the statutes is created to read:

138.09 (3) (g) Each licensee shall keep current and accurate all material information on file with the division and the nationwide multistate licensing system and registry as provided in s. 224.35 (6).

267,23 Section 23. 138.09 (4) (a) 4. of the statutes is created to read:

138.09 (4) (a) 4. The licensee has made a material misstatement, or knowingly omitted a material fact, in an application for a license or in information furnished to the division or the nationwide multistate licensing system and registry.

267,24 Section 24 . 138.09 (4) (e) of the statutes is created to read:

138.09 (4) (e) The division may report any enforcement action, any violation of this section or of an administrative rule or order, or other relevant information to the nationwide multistate licensing system and registry. Except as provided in s. 224.35 (4) (b) and (c), these reports to the nationwide multistate licensing system and registry shall be confidential and are not subject to public copying or inspection under s. 19.35 (1).

267,25 Section 25 . 138.09 (6) of the statutes is amended to read:

138.09 (6) (a) Except as provided in par. (b), the The licensee shall keep such books and records in the licensee's place of business at a licensed location, or accessible from a licensed location, as in the opinion of the division will enable the division to determine whether the provisions of this chapter are being observed. Every such licensee shall preserve the records of final entry used in such business, including cards used in the card system, if any, 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 location licensed under this section. If any books and records are not located within this state, the licensee, upon request of the division, shall promptly deliver such information to any location within this state specified by the division. The licensee shall organize the books and records by the place of business licensed location where the records originated and shall keep the books and records separate from other records for business conducted at that location. Actual costs incurred by the division to examine books and records maintained outside of this state shall be paid by the licensee.

267,26 Section 26 . 138.09 (7) (b), (bm) and (bn) of the statutes are repealed.

267,27 Section 27 . 138.09 (7) (c) 2. and 4. of the statutes are amended to read:

138.09 (7) (c) 2. For the purpose of computing interest under this section, whether at the maximum rate or less, a day shall be considered one-thirtieth of a month when such computation is made for a fraction of a month. Loan contracts providing for installments payable at monthly intervals may provide for a first period between the date of the contract and the first installment due date of not more than 45 days and not less than 15 days. Where the first period is greater or lesser than one month, interest may be charged only for each day in the first period, at a rate not to exceed one-thirtieth of the interest which would be applicable to a first installment period of one month, but such first period may be considered a monthly interval for purposes of determining rebates. Where the first period is greater than one month, any additional interest charge shall be earned and may be added to and collected at the time of the first installment payment.

4. If 2 installments or parts thereof of a precomputed loan are not paid on or before the 10th day after their scheduled or deferred due dates, a licensee may elect to convert the loan from a precomputed loan to one in which the interest is computed on unpaid balances actually outstanding. In this event the licensee shall make a rebate pursuant to the provisions on rebate upon prepayment as of the due date of an unpaid installment, and thereafter may charge interest from the due date as provided in subd. 3. or by par. (b) 2. and no further delinquency or deferral charges shall be made. The rate of interest may equal but not exceed the annual percentage rate of finance charge which was disclosed to the borrower when the loan was made. The rate of interest shall be computed on actual unpaid balances of the contract as reduced by the rebate for the time that such balances are actually outstanding from the due date as of which the rebate was made until the contract is fully paid.

267,28 Section 28 . 138.09 (7) (e) 2. of the statutes is repealed.

267,29 Section 29 . 138.09 (7) (e) 3. of the statutes is amended to read:

138.09 (7) (e) 3. Notwithstanding subds. subd. 1. and 2., delinquency charges on precomputed consumer loans shall be governed by s. 422.203.

267,30 Section 30 . 138.09 (7) (g) (intro.) of the statutes is amended to read:

138.09 (7) (g) (intro.) Except as provided in par. (gm), upon Upon prepayment in full by cash, renewal, refinancing or otherwise, the borrower shall be entitled to a rebate of the unearned interest as provided in this paragraph. If the combined rebate of interest and credit insurance premiums otherwise required is less than $1, no rebate need be made. The refunds shall be determined as follows:

267,31 Section 31 . 138.09 (7) (gm) 1. and 2. of the statutes are repealed.

267,31m Section 31m. 138.09 (7) (i) (intro.), 1. and 2. of the statutes are amended to read:

138.09 (7) (i) (intro.) In addition to interest, the licensee may charge all of the following:

1. The additional charges allowed in s. 422.202 whether or not the loan is a consumer loan;.

2. An amount sufficient to cover the fee for filing the termination statement required by s. 409.513 on loans secured by merchandise other than a motor vehicle, a manufactured home, or a boat; and.

267,31o Section 31o. 138.09 (7) (i) 4. of the statutes is created to read:

138.09 (7) (i) 4. A nonrefundable prepaid finance charge on a consumer loan, which is earned by the licensee when charged, subject to the following:

a. If the amount financed is $500 or less, the prepaid finance charge may not exceed 10 percent of the amount financed or $50, whichever is less.

b. If the amount financed is more than $500 but does not exceed $1,000, the prepaid finance charge may not exceed 7.5 percent of the amount financed or $75, whichever is less.

c. If the amount financed exceeds $1,000, the prepaid finance charge may not exceed 5 percent of the amount financed or $175, whichever is less.

d. Notwithstanding subd. 4. a. to c., a prepaid finance charge assessed on a consumer loan that is secured primarily by an interest in real property, in a mobile home, as defined in s. 101.91 (10), or in a manufactured home, as defined in s. 101.91 (2), including a refinancing or loan consolidation, may not exceed 2 percent of the amount financed.

e. If a licensee charges a prepaid finance charge on a consumer loan in which the amount financed does not exceed $1,000 that is prepaid from the proceeds of a new loan made by the same licensee within 4 months after the prior loan, then the licensee shall reduce any prepaid finance charge on the new loan by the amount of the prepaid finance charge on the prior loan.

f. If a licensee charges a prepaid finance charge on a consumer loan in which the amount financed exceeds $1,000 that is prepaid from the proceeds of a new loan made by the same licensee within 6 months after the prior loan, then the licensee shall reduce any prepaid finance charge on the new loan by the amount of the prepaid finance charge on the prior loan.

267,32 Section 32. 138.09 (7) (k) of the statutes is amended to read:

138.09 (7) (k) All consumer loans as defined in s. 421.301 (12) shall be governed by chs. 421 to 427, but to the extent that chs. 421 to 427 are inconsistent with this section, this section shall govern.

267,33 Section 33. 138.12 (1) (cm) and (dm) of the statutes are created to read:

138.12 (1) (cm) “Nationwide multistate licensing system and registry” has the meaning given in s. 224.35 (1g) (b).

(dm) “Unique identifier” has the meaning given in s. 224.35 (1g) (e).