AB745-ASA1,1,7 1An Act to create 36.11 (56), 38.04 (32), 38.12 (14), 165.25 (4) (aw) and 224.50 of
2the statutes; relating to: prohibiting institutions of higher education from
3engaging in certain activity regarding student credit cards, requiring such
4institutions to provide financial literacy information to students, creating
5requirements for credit cards issued to underage customers, providing an
6exemption from emergency rule procedures, granting rule-making authority,
7and providing a penalty.
Analysis by the Legislative Reference Bureau
This substitute amendment requires the Department of Financial Institutions
(DFI) to promulgate rules prohibiting credit card issuers, other than federal or state
credit unions, from doing the following: 1) offering a student at an institution of
higher education (institution) any tangible item to induce the student to apply for a
credit card or participate in an open-end credit plan offered by the issuer; or 2)
engaging in marketing of a credit card involving the physical presence of a
representative of the issuer on the campus of an institution, except for marketing
that takes place solely within a branch office of a financial institution. Under the
substitute amendment, "institution of higher education" has the same meaning as

under a federal law dealing with similar issues as the substitute amendment, which
includes public universities, private nonprofit universities, postsecondary
proprietary schools, and postsecondary vocational schools.
The substitute amendment also requires DFI to promulgate rules prohibiting
an institution of higher education, or department or other division of such an
institution, from receiving any payment or compensation for credit card marketing
activity on a campus of the institution that is directed at the institution's students.
The substitute amendment defines "campus" as the buildings, facilities, and grounds
under the control of an institution that are primarily related to the institution's
operation and related services and activities. Before promulgating any of the
foregoing rules, the substitute amendment requires DFI to consult with the Board
of Regents of the University of Wisconsin (UW) System, the Technical College System
Board, the Educational Approval Board, and the Wisconsin Association of
Independent Colleges and Universities. The substitute amendment also prohibits
the UW System and technical colleges from selling to or otherwise providing a credit
card issuer the names, postal addresses, or electronic mail addresses of students, or
engaging in any marketing on behalf of a credit card issuer that is directed at
students. The substitute amendment defines "student" as an individual enrolled on
a full-time or part-time basis. The substitute amendment also provides that it does
not prohibit the UW System or technical colleges from engaging in marketing
directed at alumni, nor does it prohibit the maintenance or operation of financial
institution branch offices or automated teller machines on UW System or technical
college campuses.
In addition, the substitute amendment requires each institution of higher
education to provide information about financial literacy to its students on its
Internet Web site and, if the institution offers an on-campus orientation program to
new students, to provide the information to students during the orientation. Also,
the substitute amendment requires an institution of higher education to require
undergraduate students who are 21 or younger to complete once during the course
of the their undergraduate studies a financial literacy tutorial established under
rules promulgated by DFI. Before promulgating the rules, DFI must consult with
same persons with which it must consult for the rules described above.
The substitute amendment also creates requirements for extending credit to
individuals who are less than 21 years old. Under the substitute amendment, a
credit card may not be issued to, or an open-end credit plan established by or on
behalf of, such an individual unless one of the following options is satisfied: 1) the
application for the card or plan is cosigned by a parent, legal guardian, spouse, or
other individual, who is 21 or older, has the means to repay debts, and indicates that
he or she is jointly liable for debts incurred before the applicant turns 21; or 2) the
applicant submits financial information indicating an independent means to repay
debts. The substitute amendment requires DFI to promulgate rules for satisfying
the second option. The rules must be consistent with regulations that the Board of
Governors of the Federal Reserve System is required to promulgate under federal
law. Also, if a cosigner described in the first option is jointly liable for credit card debt
incurred by an individual who is not 21 years old, the substitute amendment

prohibits credit increases unless the cosigner approves of the increase in writing and
assumes joint liability for the increase.
Finally, except for the prohibitions regarding student information and credit
card marketing that apply to the UW System and the technical colleges, the
substitute amendment provides that a person who violates the substitute
amendment or a rule promulgated by DFI under the substitute amendment is
subject to a civil forfeiture of up to $5,000.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB745-ASA1, s. 1 1Section 1. 36.11 (56) of the statutes is created to read:
AB745-ASA1,3,22 36.11 (56) Student credit cards. (a) In this subsection:
AB745-ASA1,3,33 1. "Credit card issuer" has the meaning given in s. 224.50 (1) (c).
AB745-ASA1,3,54 2. "Student" means an individual who is enrolled on a full-time or part-time
5basis in the system.
AB745-ASA1,3,76 (b) The board may not do any of the following, and shall ensure that each
7institution and college campus does not do any of the following:
AB745-ASA1,3,98 1. Sell or otherwise provide to a credit card issuer the names, postal addresses,
9or electronic mail addresses of students.
AB745-ASA1,3,1110 2. Engage in any marketing on behalf of a credit card issuer that is directed at
11students.
AB745-ASA1,3,1412 (c) Notwithstanding s. 19.35 (1) (i), and only for the purpose of complying with
13with par. (b) 1., a person acting on behalf of the board may ascertain whether a person
14making a request under s. 19.35 (1) is a credit card issuer.
AB745-ASA1,3,1615 (d) This subsection does not prohibit the board or an institution or college
16campus from doing any of the following:
AB745-ASA1,4,3
11. Allowing a financial institution, as defined in s. 710.05 (1) (c), to maintain
2or operate a branch office or automated teller machine on the campus of an
3institution or college campus.
AB745-ASA1,4,44 2. Engaging in marketing activity directed at alumni.
AB745-ASA1, s. 2 5Section 2. 38.04 (32) of the statutes is created to read:
AB745-ASA1,4,66 38.04 (32) Student credit cards. (a) In this subsection:
AB745-ASA1,4,77 1. "Credit card issuer" has the meaning given in s. 224.50 (1) (c).
AB745-ASA1,4,98 2. "Student" means an individual who is enrolled on a full-time or part-time
9basis in a district.
AB745-ASA1,4,1010 (b) The board may not do any of the following:
AB745-ASA1,4,1211 1. Sell or otherwise provide to a credit card issuer the names, postal addresses,
12or electronic mail addresses of students.
AB745-ASA1,4,1413 2. Engage in any marketing on behalf of a credit card issuer that is directed at
14students.
AB745-ASA1,4,1715 (c) Notwithstanding s. 19.35 (1) (i), and only for the purpose of complying with
16with par. (b) 1., a person acting on behalf of the board may ascertain whether a person
17making a request under s. 19.35 (1) is a credit card issuer.
AB745-ASA1,4,1818 (d) This subsection does not prohibit the board from doing any of the following:
AB745-ASA1,4,2019 1. Allowing a financial institution, as defined in s. 710.05 (1) (c), to maintain
20or operate a branch office or automated teller machine on a college campus.
AB745-ASA1,4,2121 2. Engaging in marketing activity directed at alumni.
AB745-ASA1, s. 3 22Section 3. 38.12 (14) of the statutes is created to read:
AB745-ASA1,4,2323 38.12 (14) Student credit cards. (a) In this subsection:
AB745-ASA1,4,2424 1. "Credit card issuer" has the meaning given in s. 224.50 (1) (c).
AB745-ASA1,4,2525 2. "Student" has the meaning given in s. 38.04 (32) (a) 2.
AB745-ASA1,4,26
1(b) Each district board may not do any of the following:
AB745-ASA1,5,32 1. Sell or otherwise provide to a credit card issuer the names, postal addresses,
3or electronic mail addresses of students.
AB745-ASA1,5,54 2. Engage in any marketing on behalf of a credit card issuer that is directed at
5students.
AB745-ASA1,5,86 (c) Notwithstanding s. 19.35 (1) (i), and only for the purpose of complying with
7with par. (b) 1., a person acting on behalf of a district board may ascertain whether
8a person making a request under s. 19.35 (1) is a credit card issuer.
AB745-ASA1,5,109 (d) This subsection does not prohibit a district board from doing any of the
10following:
AB745-ASA1,5,1211 1. Allowing a financial institution, as defined in s. 710.05 (1) (c), to maintain
12or operate a branch office or automated teller machine on a college campus.
AB745-ASA1,5,1313 2. Engaging in marketing activity directed at alumni.
AB745-ASA1, s. 4 14Section 4. 165.25 (4) (aw) of the statutes is created to read:
AB745-ASA1,5,1815 165.25 (4) (aw) The department of justice shall furnish all legal services
16required by the department of financial institutions relating to the enforcement of
17s. 224.50, together with any other services as are necessarily connected to the legal
18services.
AB745-ASA1, s. 5 19Section 5. 224.50 of the statutes is created to read:
AB745-ASA1,5,21 20224.50 Credit card protections for young customers. (1) Definitions.
21In this section:
AB745-ASA1,5,2422 (a) "Campus" means buildings, facilities, and grounds under the control of an
23institution of higher education that are primarily related to the operation of the
24institution and its related services and activities.
AB745-ASA1,5,2525 (b) "Credit card" has the meaning given in s. 421.301 (15).
AB745-ASA1,6,3
1(c) "Credit card issuer" means any person, other than a federal or state
2chartered credit union, who issues a credit card, or the agent of such a person with
3respect to such card.
AB745-ASA1,6,44 (dm) "Customer" has the meaning given in s. 421.301 (17).
AB745-ASA1,6,75 (e) "Institution of higher education" means an institution of higher education,
6as defined in 15 USC 1650 (a) (3), but not including an institution that is not located
7in this state.
AB745-ASA1,6,88 (f) "Open-end credit plan" has the meaning given in s. 421.301 (27) (a).
AB745-ASA1,6,109 (g) "Student" means an individual who is enrolled on a full-time or part-time
10basis in an institution of higher education.
AB745-ASA1,6,14 11(2) Extensions of credit to underage customers. (a) No credit card may be
12issued to, or open-end credit plan established by or on behalf of, a customer who has
13not attained the age of 21, unless the customer has submitted a written application
14to the credit card issuer that meets the requirements of par. (b).
AB745-ASA1,6,1715 (b) An application to open a credit card account by a customer who has not
16attained the age of 21 as of the date of submission of the application shall require one
17of the following:
AB745-ASA1,6,2218 1. The signature of a cosigner, including the parent, legal guardian, spouse, or
19any other individual, who has attained the age of 21 having a means to repay debts
20incurred by the customer in connection with the account, indicating joint liability for
21debts incurred by the customer in connection with the account before the customer
22has attained the age of 21.
AB745-ASA1,6,2523 2. Submission by the customer of financial information, including through an
24application, indicating an independent means of repaying any obligation arising
25from the proposed extension of credit in connection with the account.
AB745-ASA1,7,4
1(c) The department shall promulgate rules providing standards that, if met,
2would satisfy the requirements of par. (b) 2. The rules shall be consistent with the
3regulations of the Board of Governors of the Federal Reserve System under 15 USC
41637
(c) (8) (C).
AB745-ASA1,7,105 (d) No increase may be made in the amount of credit authorized to be extended
6under a credit card account for which a parent, legal guardian, or spouse of the
7customer, or any other individual has assumed joint liability for debts incurred by
8the customer in connection with the account before the customer attains the age of
921, unless that parent, guardian, or spouse approves in writing, and assumes joint
10liability for, such increase.
AB745-ASA1,7,13 11(3) Certain marketing and compensation prohibited. (a) The department
12shall promulgate rules prohibiting a credit card issuer from doing any of the
13following:
AB745-ASA1,7,1614 1. Offering to a student at an institution of higher education any tangible item
15to induce the student to apply for or participate in an open-end credit plan offered
16by the credit card issuer.
AB745-ASA1,7,2217 2. Engaging in any marketing of a credit card directed at the students of an
18institution of higher education that involves the physical presence of an individual
19representing the credit card issuer on the campus of the institution. This subdivision
20does not apply to any marketing that occurs solely within the branch office of a
21financial institution, as defined in s. 710.05 (1) (c), that is located on the campus of
22an institution of higher education.
AB745-ASA1,8,223 (b) The department shall promulgate rules that prohibit an institution of
24higher education or a department or other division of such an institution from
25receiving any direct or indirect payment or compensation, monetary or otherwise, for

1credit card marketing activity on a campus of the institution that is directed at the
2institution's students.
AB745-ASA1,8,63 (c) Before promulgating rules under pars. (a) and (b), the department shall
4consult with the Board of Regents of the University of Wisconsin System, the
5technical college system board, the educational approval board, and the Wisconsin
6Association of Independent Colleges and Universities.
AB745-ASA1,8,11 7(4) Financial literacy. (a) Each institution of higher education shall provide
8to students on its Internet Web site information about financial literacy. If an
9institution of higher education offers an on-campus orientation program to new
10students, the institution shall also provide the information to students during the
11course of the orientation.
AB745-ASA1,8,1412 (b) 1. Each institution of higher education shall require each undergraduate
13student who is 21 years or younger to complete once during the course of the student's
14undergraduate studies a financial literacy tutorial established under subd. 2.
AB745-ASA1,8,2015 2. The department shall promulgate rules establishing a financial literacy
16tutorial. Before promulgating the rules, the department shall consult with persons
17whom the department determines have an interest in the rules, including the Board
18of Regents of the University of Wisconsin System, the technical college system board,
19the educational approval board, the Wisconsin Association of Independent Colleges
20and Universities, and persons representing the interests of credit card issuers.
AB745-ASA1,8,2321 3. The rules promulgated under subd. 2. shall provide that the rules first apply
22to undergraduate students enrolled at an institution of higher education in the
23semester, quarter, or term beginning after the effective date of the rules.
AB745-ASA1,8,25 24(5) Penalty. Any person who violates this section or a rule promulgated under
25this section shall be required to forfeit not more than $5,000.
AB745-ASA1, s. 6
1Section 6. Nonstatutory provisions.
AB745-ASA1,9,82 (1) Effect on certain contracts. If any of the following is subject to a contract
3that is in effect on the effective date of this subsection, and that contains provisions
4that are inconsistent with sections 36.11 (56) (b), 38.04 (32), or 38.12 (14) (b) of the
5statutes, as created by this act, then, notwithstanding sections 36.11 (56) (b), 38.04
6(32), or 38.12 (14) (b) of the statutes, as created by this act, the following may perform
7its obligations, and exercise its rights, under that contract until the contract expires,
8is extended, modified, or renewed, whichever occurs first:
AB745-ASA1,9,99 (a) The Board of Regents of the University of Wisconsin System.
AB745-ASA1,9,1010 (b) The technical college system board.
AB745-ASA1,9,1111 (c) A district board, as defined in section 38.01 (6) of the statutes.
AB745-ASA1,9,2012 (2) Emergency rules. Using the procedure under section 227.24 of the statutes,
13the department of financial institutions may promulgate the rules required under
14section 224.50 (2) (c) of the statutes, as created by this act, for the period before the
15permanent rules become effective, but not to exceed the period authorized under
16section 227.24 (1) (c) and (2) of the statutes. Notwithstanding section 227.24 (1) (a),
17(2) (b), and (3) of the statutes, the department is not required to provide evidence that
18promulgating a rule under this subsection as an emergency rule is necessary for the
19preservation of the public peace, health, safety, or welfare and is not required to
20provide a finding of emergency for the rules promulgated under this subsection.
AB745-ASA1, s. 7 21Section 7. Initial applicability.
AB745-ASA1,9,2422 (1) The treatment of section 224.50 (2) of the statutes first applies to credit
23cards issued and open-end credit plans established on the effective date of this
24subsection.
AB745-ASA1, s. 8 25Section 8. Effective date.
AB745-ASA1,9,26
1(1) This act takes effect on the first day of the 4th month beginning after
2publication.
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