LRB-1211/1
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1995 - 1996 LEGISLATURE
December 13, 1995 - Introduced by Senator Adelman. Referred to Committee on
Education and Financial Institutions.
SB450,1,2
1An Act to create 186.46, 214.597, 215.39 and 224.19 of the statutes;
relating
2to: customer service charges imposed by a financial institution.
Analysis by the Legislative Reference Bureau
This bill permits a court to reduce or eliminate a service charge (for example,
a nonsufficient funds charge or a transaction charge) that a financial institution
imposes on a customer if the court finds that the service charge is unconscionable.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB450, s. 1
3Section
1. 186.46 of the statutes is created to read:
SB450,1,5
4186.46 Unconscionable service charges. (1) Definition. In this section,
5"financial institution" has the meaning given in s. 705.01 (3).
SB450,1,10
6(2) Unconscionability. If a court as a matter of law finds that a service charge
7imposed by a financial institution on a customer is unconscionable, the court shall,
8in addition to the remedies authorized under sub. (4), either refuse to enforce the
9service charge against the customer, or so limit the application of any unconscionable
10aspect as to avoid an unconscionable result.
SB450,2,3
1(3) Factors. Without limiting the scope of sub. (2), the court may consider,
2among other things, any of the following as pertinent to the issue of
3unconscionability:
SB450,2,44
(a) Costs incurred by the financial institution in providing a service.
SB450,2,55
(b) Maintenance of the safety and soundness of the financial institution.
SB450,2,86
(c) That there exists a gross disparity between the price of a service and its
7value as measured by the price at which similar services are readily obtainable by
8other customers, or by other tests of true value.
SB450,2,129
(d) That the practice may enable a financial institution to take advantage of
10the inability of customers reasonably to protect their interests by reason of physical
11or mental infirmities, illiteracy or inability to understand the language of the
12agreement, ignorance or lack of education or similar factors.
SB450,2,1313
(e) That the terms of the transaction require a customer to waive legal rights.
SB450,2,1614
(f) That the terms of the transaction require a customer to unreasonably
15jeopardize money or property beyond the money or property immediately at issue in
16the transaction.
SB450,2,1917
(g) That the natural effect of the practice would reasonably cause or aid in
18causing a customer to misunderstand the true nature of the transaction or the
19customer's rights and duties under the transaction.
SB450,2,2220
(h) That the writing purporting to evidence the obligation of the customer in
21the transaction contains terms or provisions or authorizes practices prohibited by
22law.
SB450,2,2423
(i) Definitions of unconscionability in statutes, rules, regulations, rulings and
24decisions of legislative, administrative or judicial bodies.
SB450,3,3
1(4) Remedies. (a) A financial institution that violates this section is liable to
2the customer in an amount equal to 3 times the actual damages sustained as a result
3of the violation.
SB450,3,54
(b) A customer entitled to relief under par. (a) is also entitled to recover costs,
5disbursements and reasonable attorney fees, notwithstanding s. 814.04 (1).
SB450, s. 2
6Section
2. 214.597 of the statutes is created to read:
SB450,3,8
7214.597 Unconscionable service charges. (1) Definition. In this section,
8"financial institution" has the meaning given in s. 705.01 (3).
SB450,3,13
9(2) Unconscionability. If a court as a matter of law finds that a service charge
10imposed by a financial institution on a customer is unconscionable, the court shall,
11in addition to the remedies authorized under sub. (4), either refuse to enforce the
12service charge against the customer, or so limit the application of any unconscionable
13aspect as to avoid an unconscionable result.
SB450,3,16
14(3) Factors. Without limiting the scope of sub. (2), the court may consider,
15among other things, any of the following as pertinent to the issue of
16unconscionability:
SB450,3,1717
(a) Costs incurred by the financial institution in providing a service.
SB450,3,1818
(b) Maintenance of the safety and soundness of the financial institution.
SB450,3,2119
(c) That there exists a gross disparity between the price of a service and its
20value as measured by the price at which similar services are readily obtainable by
21other customers, or by other tests of true value.
SB450,3,2522
(d) That the practice may enable a financial institution to take advantage of
23the inability of customers reasonably to protect their interests by reason of physical
24or mental infirmities, illiteracy or inability to understand the language of the
25agreement, ignorance or lack of education or similar factors.
SB450,4,1
1(e) That the terms of the transaction require a customer to waive legal rights.
SB450,4,42
(f) That the terms of the transaction require a customer to unreasonably
3jeopardize money or property beyond the money or property immediately at issue in
4the transaction.
SB450,4,75
(g) That the natural effect of the practice would reasonably cause or aid in
6causing a customer to misunderstand the true nature of the transaction or the
7customer's rights and duties under the transaction.
SB450,4,108
(h) That the writing purporting to evidence the obligation of the customer in
9the transaction contains terms or provisions or authorizes practices prohibited by
10law.
SB450,4,1211
(i) Definitions of unconscionability in statutes, rules, regulations, rulings and
12decisions of legislative, administrative or judicial bodies.
SB450,4,15
13(4) Remedies. (a) A financial institution that violates this section is liable to
14the customer in an amount equal to 3 times the actual damages sustained as a result
15of the violation.
SB450,4,1716
(b) A customer entitled to relief under par. (a) is also entitled to recover costs,
17disbursements and reasonable attorney fees, notwithstanding s. 814.04 (1).
SB450, s. 3
18Section
3. 215.39 of the statutes is created to read:
SB450,4,20
19215.39 Unconscionable service charges. (1) Definition. In this section,
20"financial institution" has the meaning given in s. 705.01 (3).
SB450,4,25
21(2) Unconscionability. If a court as a matter of law finds that a service charge
22imposed by a financial institution on a customer is unconscionable, the court shall,
23in addition to the remedies authorized under sub. (4), either refuse to enforce the
24service charge against the customer, or so limit the application of any unconscionable
25aspect as to avoid an unconscionable result.
SB450,5,3
1(3) Factors. Without limiting the scope of sub. (2), the court may consider,
2among other things, any of the following as pertinent to the issue of
3unconscionability:
SB450,5,44
(a) Costs incurred by the financial institution in providing a service.
SB450,5,55
(b) Maintenance of the safety and soundness of the financial institution.
SB450,5,86
(c) That there exists a gross disparity between the price of a service and its
7value as measured by the price at which similar services are readily obtainable by
8other customers, or by other tests of true value.
SB450,5,129
(d) That the practice may enable a financial institution to take advantage of
10the inability of customers reasonably to protect their interests by reason of physical
11or mental infirmities, illiteracy or inability to understand the language of the
12agreement, ignorance or lack of education or similar factors.
SB450,5,1313
(e) That the terms of the transaction require a customer to waive legal rights.
