SB589,23,21 16422.208 Right to prepay. Subject to s. 422.209 and, with respect to a motor
17vehicle consumer lease, s. 429.207
, the customer may prepay in full or in any part,
18at any time without penalty, the unpaid balance of any consumer credit transaction
19other than a transaction secured by a first lien mortgage or equivalent security
20interest on real estate with an original term of 10 years or more and on which the
21annual percentage rate disclosed pursuant to subch. III is 10% or less.
SB589, s. 68 22Section 68. 422.303 (3) (intro.) of the statutes is amended to read:
SB589,24,223 422.303 (3) (intro.) Except as provided in sub. subs. (3m) and (4), every writing
24evidencing the customer's obligation to pay under a consumer credit transaction,
25other than one pursuant to an open-end credit plan, shall contain immediately above

1or adjacent to the place for the signature of the customer, a clear, conspicuous,
2printed or typewritten notice in substantially the following language:
SB589, s. 69 3Section 69. 422.303 (3m) of the statutes is created to read:
SB589,24,74 422.303 (3m) Except as provided in sub. (4), every writing evidencing the
5customer's obligation to pay under a motor vehicle consumer lease shall contain
6immediately above or adjacent to the place for the signature of the customer, a clear,
7conspicuous, printed or typewritten notice in substantially the following language:
SB589,24,88 NOTICE TO LESSEE
SB589,24,129 (a) THIS IS A MOTOR VEHICLE CONSUMER LEASE. YOU HAVE NO
10OWNERSHIP RIGHTS IN THE VEHICLE UNLESS THIS LEASE CONTAINS A
11PURCHASE OPTION AND YOU EXERCISE YOUR OPTION TO PURCHASE THE
12VEHICLE.
SB589,24,1413 (b) DO NOT SIGN THIS LEASE BEFORE YOU READ IT, INCLUDING THE
14WRITING ON THE REVERSE SIDE.
SB589,24,1515 (c) DO NOT SIGN THIS IF IT CONTAINS ANY BLANK SPACES.
SB589,24,1716 (d) EARLY TERMINATION OF THIS LEASE MAY REQUIRE YOU TO PAY
17A SUBSTANTIAL AMOUNT.
SB589,24,1918 (e) YOU ARE ENTITLED TO A COMPLETED COPY OF THIS LEASE WHEN
19YOU SIGN IT.
SB589, s. 70 20Section 70. 422.413 (1) of the statutes is amended to read:
SB589,24,2521 422.413 (1) Except as provided in subs. (2) and (2g), no term of a writing
22evidencing a consumer credit transaction may provide for any charges as a result of
23default by the customer other than reasonable expenses incurred in the disposition
24of collateral or goods subject to a motor vehicle consumer lease and such other
25charges as are specifically authorized by chs. 421 to 427 and 429.
SB589, s. 71
1Section 71. 422.417 (2) of the statutes is amended to read:
SB589,25,72 422.417 (2) With respect to a consumer lease, except as otherwise provided in
3s. 429.205 with respect to a motor vehicle consumer lease,
a lessor may not take a
4security interest in any property of owned or leased by the customer other than the
5leased goods to secure the lessor's obligations under the lease. This subsection does
6not prohibit a security interest in a cash security deposit for a consumer lease of
7motor vehicles or agricultural equipment.
SB589, s. 72 8Section 72. 424.201 (1) and (2) of the statutes are amended to read:
SB589,25,119 424.201 (1) Insurance issued as an isolated transaction on the part of the
10insurer not related to an agreement or plan for insuring customers of the creditor;
11or
SB589,25,13 12(2) Insurance indemnifying the creditor against loss due to the customer's
13default.; or
SB589, s. 73 14Section 73. 424.201 (3) of the statutes is created to read:
SB589,25,1715 424.201 (3) With respect to a motor vehicle consumer lease, a lessor's waiver
16of its contractual right to hold the lessee liable for any or all of the gap amount, as
17defined in s. 429.104 (12), if the waiver is granted without a separate charge.
SB589, s. 74 18Section 74. 425.106 (1) (intro.) of the statutes is amended to read:
SB589,25,2419 425.106 (1) (intro.) Except to the extent that the merchant has a valid security
20interest which is permitted by chs. 421 to 427 and 429 or has a lien under ch. 779 in
21such property, or where the transaction is for medical or legal services and there has
22been no finance charge actually imposed, the following property of the customer shall
23be exempt from levy, execution, sale, and other similar process in satisfaction of a
24judgment for an obligation arising from a consumer credit transaction:
SB589, s. 75 25Section 75. 425.107 (4) of the statutes is amended to read:
SB589,26,4
1425.107 (4) Any charge or practice expressly permitted by chs. 421 to 427 and
2429
is not in itself unconscionable but even though a practice or charge is authorized
3by chs. 421 to 427 and 429, the totality of a creditor's conduct may show that such
4practice or charge is part of an unconscionable course of conduct.
SB589, s. 76 5Section 76. Chapter 429 of the statutes is created to read:
SB589,26,86 Chapter 429
7 motor vehicle
8 consumer leases
SB589,26,109 Subchapter i
10 general provisions
SB589,26,12 11429.101 Title. This chapter may be cited as the Wisconsin motor vehicle
12consumer lease act.
SB589,26,17 13429.102 Applicable law. (1) Unless superseded by the particular provisions
14of this chapter, s. 218.01 and chs. 411 and 421 to 427 and the principles of law and
15equity, including the law relative to capacity to contract, principal and agent,
16estoppel, fraud, misrepresentation, duress, coercion, mistake, bankruptcy, or other
17validating or invalidating cause supplement this chapter.
SB589,26,21 18(2) Unless superseded by the particular provisions of this chapter, parties to
19a motor vehicle consumer lease have all of the obligations, duties, rights and
20remedies provided in s. 218.01 and chs. 411 and 421 to 427 that apply to the
21transaction.
SB589,26,25 22429.103 Construction against implied repeal. This chapter being a
23general act intended as a unified coverage of its subject matter, no part of this chapter
24shall be construed to be impliedly repealed by subsequent legislation if such
25construction can reasonably be avoided.
SB589,27,1
1429.104 Definitions. In this chapter:
SB589,27,3 2(1) "Adjusted capitalized cost" means the amount computed by subtracting
3from capitalized cost any capitalized cost reduction.
SB589,27,6 4(2) "Average periodic depreciation" means the adjusted capitalized cost, after
5first subtracting the residual value, divided by the number of lease-payment periods
6or, for a single-payment lease, the number of months in the term of the lease.
SB589,27,9 7(3) "Average periodic lease charge" means the lease charge for the originally
8scheduled term of the consumer lease divided by the number of lease-payment
9periods or, for a single-payment lease, the number of months in the term of the lease.
SB589,27,10 10(4) "Base lease payment" means an amount determined as follows:
SB589,27,1311 (a) With respect to a single-payment lease, the product of the number of
12months in the term of the lease multiplied by the sum of the average periodic lease
13charge and the average periodic depreciation.
SB589,27,1514 (b) With respect to a lease other than a single-payment lease, the sum of the
15average periodic lease charge and the average periodic depreciation.
SB589,28,4 16(5) "Capitalized cost" means all costs capitalized in the consumer lease that,
17after subtracting the capitalized cost reduction, amortizes to the residual value of the
18depreciation portion of the periodic lease payments over the unexpired term of the
19lease or, for a single-payment lease, the single payment. These costs may include
20taxes; fees for registration, license, acquisition, administration and assignment;
21other fees; and charges for insurance, for a waiver of the contractual obligation to pay
22the gap amount, for accessories and their installation, for other services and benefits
23incidental to the consumer lease, and for delivering, servicing, repairing or
24improving the vehicle. With respect to a vehicle or other property traded in
25connection with a consumer lease, the term includes the outstanding unpaid balance

1of the amount financed under a consumer loan, as defined in s. 421.301 (12), or a
2retail instalment contract, as defined in s. 218.01 (1) (t), or the unpaid balance of any
3early termination costs under a lease or other obligation of the lessee. The term does
4not include any lease charge.
SB589,28,9 5(6) "Capitalized cost reduction" means the sum, at the time of inception of the
6consumer lease, of any payments made by cash, check, rebates or the like that
7constitute a downpayment made by the lessee and the amount credited the lessor for
8any trade-in. The term does not include any base lease payments due at the
9inception of the consumer lease.
SB589,28,12 10(7) "Conspicuous" means that the term or clause is so written as to be
11distinguished from other terms or clauses by type size or in some other manner. The
12term includes any writing in at least 10-point boldface type.
SB589,28,19 13(9) "Consumer lease" or "lease" means a lease entered into in this state that
14transfers the right of possession and use by a natural person of a vehicle primarily
15for a personal, family, household or agricultural purpose, for a period of time
16exceeding 4 months, if the total lease obligation, excluding any option to purchase
17or otherwise become owner of the vehicle at the expiration of the consumer lease,
18does not exceed $25,000. The term does not include a credit sale, as defined under
1912 CFR 226.2 (a) (16).
SB589,28,21 20(10) "Early termination" means termination of a consumer lease before the
21termination date set forth in the consumer lease.
SB589,28,23 22(11) "Federal consumer leasing act" means the federal consumer leasing act,
2315 USC 1667 et seq., and regulations issued under that act.
SB589,29,8 24(12) "Gap amount" means the difference between the amount specified in the
25consumer lease to be paid to the lessor by the lessee in the event of total loss or

1destruction of the leased vehicle prior to expiration of the lease by theft, physical
2damage, or other occurrence specified in the lease, and the actual cash value or
3portion thereof received by the lessor from insurance proceeds or from any other
4person on account of the total loss or destruction of the vehicle. The term does not
5include any deductible amount applicable to any insurance policy maintained by the
6lessee, any past-due payments owed by the lessee at the time of receipt by the lessor
7of the actual cash value or portion thereof from insurance proceeds or from any other
8person, or any other amount due under the lease resulting from default by the lessee.
SB589,29,11 9(13) "Gap protection" means a provision in a consumer lease under which the
10lessor agrees, for a charge, to waive the gap amount or provide that another person
11shall be liable for the gap amount.
SB589,29,14 12(14) "Group credit insurance" means group credit life insurance, group credit
13accident insurance, group credit accident and health insurance, group disability
14insurance or group credit unemployment insurance.
SB589,29,18 15(15) "Holder" means, with respect to a consumer lease, the lessor and, upon
16assignment of the lease, the assignee for the period of assignment. The term does
17not include a pledgee under the consumer lease or the owner or beneficiary of an
18interest in a trust that owns consumer leases.
SB589,29,21 19(16) "Lease charge" means the sum of all charges, calculated by a lessor on any
20basis, payable by the lessee for the privilege of making the scheduled lease payments
21under a consumer lease. The term does not include capitalized cost.
SB589,29,23 22(17) "Lessee" means a natural person who leases a vehicle from a lessor under
23a consumer lease.
SB589,29,25 24(18) "Lessor" means a person regularly engaged in the business of leasing or
25selling vehicles who leases a vehicle to a lessee under a consumer lease.
SB589,30,1
1(19) "Motor vehicle" has the meaning given in s. 218.01 (1) (m).
SB589,30,3 2(20) "Periodic" means weekly, monthly, quarterly or any other period of time
3specified in a consumer lease.
SB589,30,7 4(22) "Realized value" means, with respect to a leased vehicle that has been
5appraised under s. 429.206, the fair market value of the vehicle or an amount agreed
6upon between the lessor and the lessee and, with respect to any other leased vehicle,
7means the greatest of the following:
SB589,30,108 (a) The price obtained by the holder for disposition of the vehicle, after
9subtracting all actual and reasonable expenses incurred by the lessor in connection
10with disposition of the vehicle.
SB589,30,1211 (b) Insurance proceeds received by the holder in the event of the total loss or
12destruction of the vehicle.
SB589,30,1413 (c) The highest bona fide offer received by the holder for disposition of the
14vehicle.
SB589,30,21 15(23) "Renegotiation" means the replacement of an existing consumer lease by
16a new consumer lease between the same parties, including an assignee of the lessor.
17The term does not include a deferral or extension of any periodic lease payments or
18portions thereof not exceeding 6 months in the aggregate, a replacement of a
19consumer lease involving a court proceeding or the settlement of a dispute, or any
20other action that does not constitute a renegotiation under the federal consumer
21leasing act.
SB589,30,23 22(24) "Residual value" means the estimated value of the leased vehicle at the
23expiration of the lease.
SB589,30,25 24(25) "Single-payment lease" means a consumer lease that requires only one
25payment, to be paid at the time of commencement of the lease.
SB589,31,3
1Subchapter II
2 Disclosures; limitations on
3 agreements and practices
SB589,31,7 4429.201 Prelease availability of consumer lease application form. A
5lessor shall, upon request of a prospective lessee, make readily available a blank
6sample of its current consumer lease application form for examination by the
7prospective lessee before execution of the consumer lease.
SB589,31,18 8429.202 Advance payment or trade-in; refund or return. (1) If a
9prospective lessee has made an advance payment or surrendered possession of a
10vehicle to a prospective lessor as a trade-in pending the execution of a consumer
11lease, the prospective lessee shall have the right, if the application for the consumer
12lease is not approved, to receive a prompt refund of the advance payment or, if
13applicable, to have the trade-in vehicle returned to him or her as promptly as
14possible. If a prospective lessor takes possession of a trade-in vehicle under this
15subsection, the prospective lessor may not sell, offer for sale, lease, transfer or
16otherwise dispose of the vehicle in any manner until execution of the consumer lease
17or, except for return of the vehicle to the prospective lessee, disapproval of the
18consumer lease application.
SB589,31,23 19(2) This section does not apply to the sale of a vehicle by a prospective lessee
20to a prospective lessor under a separate contract of sale if the contract of sale is
21executed prior to execution of the consumer lease between the parties, gives the date
22of sale and is signed by both parties. Any contract of sale under this subsection shall
23provide for all of the following:
SB589,32,3
1(a) That the contract price establishes the value of the vehicle for purposes of
2determining the capitalized cost reduction or, if the parties fail to execute a consumer
3lease, the amount due the prospective lessee for the vehicle.
SB589,32,74 (b) That the prospective lessee agrees to leave the contract price on deposit with
5the prospective lessor pending the execution of a consumer lease between the parties
6with respect to a vehicle to be ordered from a manufacturer, including a vehicle not
7yet in production as of the date of sale.
SB589,32,118 (c) That the prospective lessee shall be entitled to payment of the contract price
9from the prospective lessor no later than 75 days after the date of sale, unless the
10parties have executed a consumer lease or the prospective lessee has already
11received such payment.
SB589,32,13 12429.203 Requirements of a consumer lease. (1) A consumer lease shall
13be in writing and signed by the lessor and the lessee.
SB589,32,17 14(2) Except as otherwise provided in this subsection, the printed portion of a
15consumer lease, other than instructions for its completion, shall be in at least 8-point
16type. The consumer lease shall contain all of the following printed in a clear and
17conspicuous manner:
SB589,32,1918 (a) At the top of the consumer lease, the words "MOTOR VEHICLE LEASE
19AGREEMENT" in at least 10-point type.
SB589,32,2420 (b) 1. Except as provided in subd. 2., if no liability insurance for bodily injury
21or property damage is provided for under the consumer lease, a notice in
22substantially the following language in bold-faced capital letters of not less than
2310-point type: "NO LIABILITY INSURANCE FOR BODILY INJURY OR
24PROPERTY DAMAGE IS INCLUDED IN THIS AGREEMENT."
SB589,33,3
12. The notice required under subd. 1. may be provided on a separate document
2delivered to the prospective lessee not later than the time of execution of the
3consumer lease.
SB589,33,4 4(3) The consumer lease shall contain all of the following disclosures:
SB589,33,85 (a) The capitalized cost, using the term "capitalized cost", and an explanation
6of the term in substantially the following language: "Capitalized cost is the
7agreed-upon amount determined at the inception of the consumer lease for all items
8and services included in the lease."
SB589,33,99 (b) Any capitalized cost reduction, using the term "capitalized cost reduction".
SB589,33,1510 (c) The adjusted capitalized cost, using the term "adjusted capitalized cost",
11and an explanation of the term, as applicable, in substantially the following
12language: "The adjusted capitalized cost is the agreed-upon amount that serves as
13the basis for determining the base lease payment. If you are not in default on the
14consumer lease, this amount (plus any applicable early termination charges)
15determines your maximum early termination obligation."
SB589,33,1616 (d) The residual value of the vehicle, using the term "residual value".
SB589,33,1917 (e) The standards to be applied by the holder in determining the excess wear
18and damage to the vehicle for which the lessee shall be held liable, subject to s.
19429.208. These standards shall comply with the federal consumer leasing act.
SB589,33,2020 (f) Any disclosure required under s. 422.303 (3m).
SB589,33,2121 (g) Any other disclosure required by the federal consumer leasing act.
SB589,34,2 22(4) The consumer lease shall contain the names of the lessor and the lessee; the
23place of business of the lessor; the place of business or residence of the lessee, as
24specified by the lessee; and a detailed description of the vehicle, including the year,

1make, model and, if known, serial or identification number or other identifying
2marks.
SB589,34,6 3(5) The lessor shall deliver to the lessee a completed copy of the consumer lease
4signed by both parties. Any acknowledgement of delivery of a copy of the consumer
5lease by the lessee shall be conspicuous and appear directly above the space reserved
6for the signature of the lessee.
SB589,34,10 7(6) (a) Any policy of bodily injury and property damage liability insurance with
8respect to operation of the leased vehicle for which a charge is included in the
9consumer lease shall be issued by an insurer authorized to transact business in this
10state.
SB589,34,1811 (b) The lessee shall have the right of purchasing a policy of bodily injury and
12property damage liability insurance with respect to operation of the leased vehicle
13from an insurance agent or broker selected by the lessee, if the insurer selected to
14issue the policy is acceptable to the lessor. If a lessee purchases an insurance policy
15under this paragraph, the lessor may include a charge for an applicable insurance
16premium in the consumer lease and, if such charge is included in the consumer lease,
17has no obligation to send or cause to be sent to the lessee a copy of the applicable
18insurance policy.
SB589,35,319 (c) If any liability insurance policy or other insurance on the vehicle is canceled,
20a refund of any insurance premium paid for the insurance that is received by the
21holder from the insurer shall be refunded to the lessee or credited, together with that
22portion of the lease charge applicable to such refund, to the lessee's outstanding
23obligations under the consumer lease, including to any remaining lease payments or,
24at the option of the holder, to the existing obligations of the lessee upon expiration,
25termination or cancellation of the consumer lease. A refund or credit under this

1paragraph is not required if the amount of the refund or credit would be less than $1
2or is applied toward the purchase of similar liability insurance protecting the
3interests of the lessee or holder.
SB589,35,12 4(7) A holder may purchase or sell, or otherwise acquire or transfer, an interest
5in a consumer lease or a vehicle subject to a consumer lease, on such terms and
6conditions as may be mutually agreed upon by the parties to the sale, transfer or
7acquisition. No filing of the sale, transfer or acquisition, or any requirement that the
8holder be deprived of any payments due with respect to the consumer lease or, if
9subject to replevin or otherwise returned to the holder, the vehicle, shall be necessary
10to the validity of any written bill of sale or other instrument of transfer of the interest
11in a consumer lease as against creditors, subsequent purchasers, pledgees,
12encumbrancers, mortgagees, successors or assigns.
SB589,35,16 13(8) (a) Upon written request from a lessee, the holder shall give or forward to
14the lessee a written statement that specifies, without regard to the value of the leased
15vehicle, the projected obligation that the lessee will incur in the event of early
16termination of the consumer lease.
SB589,35,2217 (b) No charge may be imposed or collected for the preparation of one statement
18under par. (a) in a 12-month period. A holder may impose and collect a reasonable
19charge, not exceeding $20 per statement, for the preparation of a 2nd or subsequent
20statement under par. (a) in a 12-month period, if the charge has been disclosed to the
21lessee either orally or in writing prior to preparation of a statement under this
22paragraph.
SB589,35,24 23(9) A holder is not required to pay interest on any security deposit under the
24consumer lease.
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