LRB-1730/1
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1997 - 1998 LEGISLATURE
April 28, 1997 - Introduced by Representatives Hoven, Kaufert, Meyer, Plale,
Vrakas, Skindrud, La Fave
and Ward, cosponsored by Senators Shibilski,
Wineke, Zien, Fitzgerald, C. Potter, Rude
and Welch. Referred to Committee
on Financial Institutions.
AB329,1,10 1An Act to repeal 422.201 (12), 422.203 (4) (b), 422.402 (1) (c), 422.402 (1m) (c),
2422.413 (2), 422.417 (1) (e), 424.208 (1) (b), 424.301 (1) (b) 4., 425.114 and
3425.206 (1) (d); to consolidate, renumber and amend 424.208 (1) (intro.) and
4(a); to amend 421.203 (1), 421.301 (17), 422.201 (8), 422.203 (4) (a), 422.203 (4)
5(c), 422.207 (1), 422.209 (2) (b) 1., 422.209 (2) (b) 2., 422.411 (1), 422.412,
6422.413 (1), 422.417 (1) (c), 422.417 (1) (d), 422.417 (2), 422.418 (2), 422.421 (6)
7(a), 422.501 (3), 423.201, 425.103 (2) (a), 425.206 (1) (b), 425.206 (1) (c), 425.207
8(2), 425.208 (1) (intro.) and 425.208 (1) (cm); and to create 421.202 (10) of the
9statutes; relating to: excluding agricultural transactions from the Wisconsin
10consumer act.
Analysis by the Legislative Reference Bureau
Under current law, the Wisconsin consumer act (WCA) generally applies to all
consumer transactions made in the state, unless a specific exclusion applies.
Current law contains a number of exclusions, including an exclusion for consumer
credit transactions in which the amount financed exceeds $25,000 and other
consumer transactions in which the cash price exceeds $25,000. The bill amends the

WCA to also exclude any transaction that is for an agricultural purpose. A
transaction is for an agricultural purpose if its purpose is related to the production,
harvest, exhibition, marketing, transportation, processing or manufacture of
agricultural products by certain persons who cultivate, plant, propagate or nurture
those agricultural products.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB329, s. 1 1Section 1. 421.202 (10) of the statutes is created to read:
AB329,2,22 421.202 (10) Transactions that are primarily for an agricultural purpose.
AB329, s. 2 3Section 2. 421.203 (1) of the statutes is amended to read:
AB329,2,84 421.203 (1) Consumer credit transactions, not governed by ch. 428, which are
5made, insured or guaranteed by the federal government or any agency thereof, or by
6any federal instrumentality chartered under the federal farm credit act of 1971 (P.L.
792-181; 85 stats. 583; 12 USC 2001 et seq.),
or by the department of veteran's affairs
8shall be subject to only those provisions set forth in sub. (2).
AB329, s. 3 9Section 3. 421.301 (17) of the statutes is amended to read:
AB329,2,1510 421.301 (17) "Customer" means a person other than an organization (s.
11421.301 (28)) who seeks or acquires real or personal property, services, money or
12credit for personal, family, or household or agricultural purposes. A person other
13than a customer may agree to be governed by chs. 421 to 427 with respect to all
14aspects of a transaction and in such event such person shall be deemed a customer
15for all purposes of chs. 421 to 427 with respect to such transaction.
AB329, s. 4 16Section 4. 422.201 (8) of the statutes is amended to read:
AB329,3,517 422.201 (8) That portion of the finance charge consisting of an amount equal
18to a discount of 5% or less of the stated price which is offered to induce payment in

1full within a stated period of time in connection with a sale for agricultural purposes
2or
a sale of particular goods and services for which credit is not otherwise available
3from the merchant shall not be included in the finance charge for the purpose of
4determining the maximum rate of finance charge under sub. (2) or (3) with respect
5to a customer who does not pay in full within such time.
AB329, s. 5 6Section 5. 422.201 (12) of the statutes is repealed.
AB329, s. 6 7Section 6. 422.203 (4) (a) of the statutes is amended to read:
AB329,3,158 422.203 (4) (a) With respect to a consumer credit transaction other than one
9primarily for an agricultural purpose
, interest after the final scheduled maturity
10date may not exceed the greater of either 12% per year or the annual rate of finance
11charge assessed on that transaction if the transaction is entered into on or after April
126, 1980 and prior to November 1, 1981, and may not exceed the maximum rate
13permitted by s. 138.05 (1) (a), if the transaction is entered into prior to April 6, 1980,
14but if such interest is charged no delinquency charge may be taken on the final
15scheduled instalment.
AB329, s. 7 16Section 7. 422.203 (4) (b) of the statutes is repealed.
AB329, s. 8 17Section 8. 422.203 (4) (c) of the statutes is amended to read:
AB329,3,2318 422.203 (4) (c) With respect to a consumer credit transaction other than one
19primarily for an agricultural purpose
, interest after the final scheduled maturity
20date shall not exceed the greater of either 12% per year or the annual rate of finance
21charge assessed on that transaction if the transaction is entered into on or after
22November 1, 1981, but if interest is charged no delinquency charge may be taken on
23the final scheduled instalment.
AB329, s. 9 24Section 9. 422.207 (1) of the statutes is amended to read:
AB329,4,13
1422.207 (1) With respect to a consumer credit transaction the parties may, to
2the extent not prohibited by chs. 421 to 427 and 429, agree that the customer will
3perform certain duties with respect to preserving or insuring collateral or goods
4subject to a motor vehicle consumer lease, if such duties are reasonable in relation
5to the risk of loss of or damage to the collateral or goods. If the customer fails to so
6perform the creditor may, if authorized by the agreement, pay for the performance
7of such duties on behalf of the customer. The amount paid may be added to the
8unpaid balance of the customer's obligation, if, in the absence of performance, the
9merchant has made all expenditures on behalf of the customer in good faith and in
10a commercially reasonable manner and except in the case of a transaction for an
11agricultural purpose where the collateral is perishable and threatens to decline
12speedily in value,
the merchant has given the customer written notice of the
13nonperformance and reasonable opportunity after such notice to so perform.
AB329, s. 10 14Section 10. 422.209 (2) (b) 1. of the statutes is amended to read:
AB329,4,2415 422.209 (2) (b) 1. The portion of the finance charge which is allocable to all
16unexpired payment periods as scheduled or deferred. A payment period is unexpired
17if prepayment is made within 15 days after the payment's due date. The unearned
18finance charge is the finance charge which, assuming all payments are made as
19scheduled or deferred, would be earned for each unexpired payment period by
20applying to unpaid balances of principal, according to the actuarial method, the
21annual percentage rate disclosed to the customer under subch. III or, in the case of
22a transaction for an agricultural purpose, the annual percentage rate based on the
23finance charge
. The creditor may decrease the annual interest rate to the next
24multiple of 0.25%.
AB329, s. 11 25Section 11. 422.209 (2) (b) 2. of the statutes is amended to read:
AB329,5,5
1422.209 (2) (b) 2. The finance charge less the amount determined by applying
2the annual percentage rate disclosed to the customer under subch. III or, in the case
3of a transaction for an agricultural purpose, the annual percentage rate based on the
4finance charge
, according to the actuarial method, to the unpaid balances for the
5actual time those balances were unpaid up to the date of prepayment.
AB329, s. 12 6Section 12. 422.402 (1) (c) of the statutes is repealed
AB329, s. 13 7Section 13. 422.402 (1m) (c) of the statutes is repealed.
AB329, s. 14 8Section 14. 422.411 (1) of the statutes is amended to read:
AB329,5,139 422.411 (1) Except as provided in subs. (2) and (2m), with respect to a consumer
10credit transaction no term of a writing may provide for the payment by the customer
11of attorney fees. Notwithstanding subs. (2) and (2m), a consumer credit transaction
12may not provide for the payment by the customer of attorney fees if the transaction
13is for an agricultural purpose.
AB329, s. 15 14Section 15. 422.412 of the statutes is amended to read:
AB329,5,19 15422.412 Restriction on liability in consumer lease. In a consumer lease
16other than one for an agricultural purpose, the obligation of a customer upon
17expiration of the lease may not exceed the average payment allocable to a monthly
18period under the lease. This limitation does not apply to charges for damages to the
19leased property occasioned by other than normal use or for other default.
AB329, s. 16 20Section 16. 422.413 (1) of the statutes is amended to read:
AB329,5,2521 422.413 (1) Except as provided in subs. (2) and sub. (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.
AB329, s. 17
1Section 17. 422.413 (2) of the statutes is repealed.
AB329, s. 18 2Section 18. 422.417 (1) (c) of the statutes is amended to read:
AB329,6,53 422.417 (1) (c) Real property to which the property sold is affixed, or which is
4maintained, repaired or improved as a result of the sale of the property or services,
5if the obligation secured is $1,000 or more; and
AB329, s. 19 6Section 19. 422.417 (1) (d) of the statutes is amended to read:
AB329,6,117 422.417 (1) (d) Goods of the consumer which were the subject of a prior
8transaction with the seller which is consolidated (s. 422.206) with the consumer
9credit sale, or if the consumer credit sale is made pursuant to an open-end credit
10plan, goods previously purchased by the consumer pursuant to the plan, subject
11however to s. 422.418; and.
AB329, s. 20 12Section 20. 422.417 (1) (e) of the statutes is repealed.
AB329, s. 21 13Section 21. 422.417 (2) of the statutes is amended to read:
AB329,6,1914 422.417 (2) With respect to a consumer lease, except as otherwise provided in
15s. 429.205 with respect to a motor vehicle consumer lease, a lessor may not take a
16security interest in any property owned or leased by the customer other than the
17leased goods to secure the lessor's obligations under the lease. This subsection does
18not prohibit a security interest in a cash security deposit for a consumer lease of
19motor vehicles or agricultural equipment.
AB329, s. 22 20Section 22. 422.418 (2) of the statutes is amended to read:
AB329,7,521 422.418 (2) For the purpose of determining the extent to which a consolidated
22obligation is secured after a consolidation of consumer sales other than sales
23primarily for an agricultural purpose
, and after a consolidation of consumer loans in
24which one or more of the loans consolidated is secured by a purchase money security
25interest in property of the type described in s. 422.417 (3) (a), payments received by

1the creditor after a consolidation agreement are deemed to have been first applied
2to the payment of obligations arising from the transactions first made. To the extent
3that obligations are paid pursuant to this section, security interests in items of
4property terminate as the obligation originally incurred with respect to each item is
5paid.
AB329, s. 23 6Section 23. 422.421 (6) (a) of the statutes is amended to read:
AB329,7,127 422.421 (6) (a) Except as provided in s. 422.201 (12), for For any variable rate
8transaction, other than one pursuant to an open-end credit plan, entered into before
9November 1, 1984, the maximum rate of finance charge for any payment period may
10not exceed the limit set forth in s. 422.201 (2) (bm) as determined on the earlier of
11the first day of the payment period or the day notice is given under sub. (5) for the
12payment period.
AB329, s. 24 13Section 24. 422.501 (3) of the statutes is amended to read:
AB329,7,1614 422.501 (3) "Extension of credit" means the right to defer payment of debt or
15to incur debt and defer its payment, that is offered or granted for debt that is incurred
16primarily for personal, family, or household or agricultural purposes.
AB329, s. 25 17Section 25. 423.201 of the statutes is amended to read:
AB329,8,4 18423.201 Definition. "Consumer approval transaction" means a consumer
19transaction other than a sale or lease or listing for sale of real property, or a sale of
20goods at auction, the sale or lease of goods for an agricultural purpose or a loan made
21to finance the sale of goods at auction for an agricultural purpose
1) which is initiated
22by face-to-face solicitation away from a regular place of business of the merchant
23or by mail or telephone solicitation directed to the particular customer and 2) which
24is consummated or in which the customer's offer to contract or other writing
25evidencing the transaction is received by the merchant away from a regular place of

1business of the merchant and involves the extension of credit or is a cash transaction
2in which the amount the customer pays exceeds $25. "Consumer approval
3transaction" shall in no event include a catalog sale which is not accompanied by any
4other solicitation or a consumer loan conducted and consummated entirely by mail.
AB329, s. 26 5Section 26. 424.208 (1) (intro.) and (a) of the statutes are consolidated,
6renumbered 424.208 (1) and amended to read:
AB329,8,117 424.208 (1) The initial amount of credit life insurance shall not exceed the total
8amount repayable under the contract of indebtedness however the indebtedness may
9be repayable, but: (a) In in cases where an indebtedness is repayable in
10substantially equal instalments, the amount of insurance shall at no time exceed the
11scheduled or actual amount of unpaid indebtedness, whichever is greater ; and.
AB329, s. 27 12Section 27. 424.208 (1) (b) of the statutes is repealed.
AB329, s. 28 13Section 28. 424.301 (1) (b) 4. of the statutes is repealed.
AB329, s. 29 14Section 29. 425.103 (2) (a) of the statutes is amended to read:
AB329,9,515 425.103 (2) (a) With respect to a transaction other than one pursuant to an
16open-end plan; if the interval between scheduled payments is 2 months or less, to
17have outstanding an amount exceeding one full payment which has remained unpaid
18for more than 10 days after the scheduled or deferred due dates, or the failure to pay
19the first payment or the last payment, within 40 days of its scheduled or deferred due
20date; if the interval between scheduled payments is more than 2 months, to have all
21or any part of one scheduled payment unpaid for more than 60 days after its
22scheduled or deferred due date; or, if the transaction is scheduled to be repaid in a
23single payment, to have all or any part of the payment unpaid for more than 40 days
24after its scheduled or deferred due date; or in the case of a transaction for an
25agricultural purpose, the failure to pay the first or the only instalment when due or

1to pay any other instalment within 40 days of its original or deferred due date
. For
2purposes of this paragraph the amount outstanding shall not include any
3delinquency or deferral charges and shall be computed by applying each payment
4first to the instalment most delinquent and then to subsequent instalments in the
5order they come due;
AB329, s. 30 6Section 30. 425.114 of the statutes is repealed.
AB329, s. 31 7Section 31. 425.206 (1) (b) of the statutes is amended to read:
AB329,9,108 425.206 (1) (b) Judgment for the merchant has been entered in a proceeding
9for recovery of collateral or leased goods under s. 425.205, or for possession of the
10collateral or leased goods under s. 425.203 (2); or
AB329, s. 32 11Section 32. 425.206 (1) (c) of the statutes is amended to read:
AB329,9,1312 425.206 (1) (c) The merchant has taken possession of collateral or leased goods
13pursuant to s. 425.207 (2); or.
AB329, s. 33 14Section 33. 425.206 (1) (d) of the statutes is repealed.
AB329, s. 34 15Section 34. 425.207 (2) of the statutes is amended to read:
AB329,9,2516 425.207 (2) A merchant who reasonably believes that a customer has
17abandoned collateral or goods subject to a consumer lease may take possession of
18such collateral or leased goods and preserve it. However, the customer may recover
19such collateral or leased goods upon request unless at the time of request the
20customer has surrendered the collateral or leased goods, or judgment for the
21merchant has been entered in a proceeding for recovery of collateral or leased goods
22under s. 425.205 or in a judgment described in s. 425.203 (2). A merchant taking
23possession of collateral or leased goods pursuant to this section shall promptly send
24notification to the customer's last-known address of such action and of the
25customer's right to recover such collateral or leased goods under this section. If the

1collateral or leased goods are recovered by the customer pursuant to this section, it
2shall be returned to the customer at the location where the merchant took possession
3of such collateral or leased goods pursuant to this section or, at the option of the
4merchant, at such other location designated by the customer; and any expense
5incurred by the merchant in taking possession of, holding and returning the
6collateral or leased goods to the customer shall be borne by the merchant. If after
7taking possession of collateral or leased goods pursuant to this subsection, the
8merchant perfects the right to possession through a surrender by the customer or a
9judgment under s. 425.203 (2) or 425.205, the customer is liable for the expenses set
10forth in s. 409.504 (1). In determining such expenses, leased goods shall be
11considered collateral under s. 409.504 (1). However, a customer is not liable for
12expenses of holding the collateral or leased goods from the time the merchant takes
13possession until the merchant perfects the right to possession in the manner
14provided in this subsection. This subsection shall not apply to collateral recovered
15in accordance with s. 425.114.
AB329, s. 35 16Section 35. 425.208 (1) (intro.) of the statutes is amended to read:
AB329,10,2117 425.208 (1) (intro.) For a period of 15 days following exercise by the creditor of
18nonjudicial enforcement rights (s. 425.206) or issuance of process (s. 425.205) with
19regard to the collateral, the customer shall, except in a transaction for an
20agricultural purpose if otherwise agreed in writing after default,
be entitled to
21redeem the goods by tendering:
AB329, s. 36 22Section 36. 425.208 (1) (cm) of the statutes is amended to read:
AB329,11,3
1425.208 (1) (cm) If a writing evidencing the consumer credit transaction so
2provides, expenses the creditor is entitled to recover under s. 422.413 (2) and (2g) (a)
3and (b); plus
AB329,11,44 (End)
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