The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB587, s. 1 1Section 1. Subchapter XI of chapter 218 [precedes 218.60] of the statutes is
2created to read:
AB587,7,33 chapter 218
AB587,7,44 Subchapter XI
AB587,7,55 rental-purchase companies
AB587,7,6 6218.60 Definitions. In this subchapter:
AB587,7,8 7(1) "Division" means the division of banking in the department of financial
8institutions.
AB587,7,9 9(2) "Rental-purchase agreement" has the meaning given in s. 421.301 (37u).
AB587,7,10 10(3) "Rental-purchase company" has the meaning given in s. 421.301 (37v).
AB587,7,12 11218.61 License required. No person may operate as a rental-purchase
12company without a valid license issued by the division under this subchapter.
AB587,7,17 13218.62 Application for license; fees; bond. (1) Application. (a) An
14application for a license under this subchapter shall be made to the division, in
15writing, in the form prescribed by the division. In addition to any other information
16that may be required by the division, an application for a license under this
17subchapter shall include all of the following:
AB587,7,1818 1. If the applicant is an individual, the applicant's social security number.
AB587,8,2
12. If the applicant is not an individual, the applicant's federal employer
2identification number.
AB587,8,43 (b) The division may not disclose any information received under par. (a) 1. or
42. to any person except as follows:
AB587,8,65 1. The division may disclose the information to the department of revenue for
6the sole purpose of requesting certifications under s. 73.0301.
AB587,8,97 2. The division may disclose the information to the department of workforce
8development in accordance with a memorandum of understanding entered into
9under s. 49.857.
AB587,8,12 10(2) Application fees. At the time of applying to the division for a license under
11this subchapter, the applicant shall pay any applicable fee specified by the division
12by rule.
AB587,8,15 13(3) Bond. The division may require an applicant or licensee to file with the
14division and maintain in force a bond, in a form prescribed by and acceptable to the
15division, and in an amount determined by the division.
AB587,8,24 16218.63 Issuance or denial of license. (1) Investigation. Upon the filing of
17an application under s. 218.62 (1) and the payment of any applicable fee, the division
18shall perform an investigation. Except as provided in sub. (3), if the division finds
19that the character, general fitness, and financial responsibility of the applicant; the
20members of the applicant, if the applicant is a partnership, limited liability company,
21or association; and the officers and directors of the applicant, if the applicant is a
22corporation warrant the belief that the business will be operated in compliance with
23any provision of chs. 421 to 427 relating to rental-purchase agreements, the division
24shall issue a license to the applicant.
AB587,9,6
1(2) Denial; notice; hearing. Except as provided in sub. (3), the division may
2deny an application made under s. 218.62 (1) by providing written notice to the
3applicant stating the grounds for the denial. Except as provided in sub. (3), a person
4whose application is denied may request a hearing under s. 227.44 within 30 days
5after the date of denial. The division may appoint a hearing examiner under s. 227.46
6to conduct the hearing.
AB587,9,8 7(3) Denial; child or family support or tax delinquency. The division may not
8issue a license under this chapter if any of the following applies:
AB587,9,109 (a) The applicant fails to provide the information required under s. 218.62 (1)
10(a).
AB587,9,1511 (b) The department of revenue certifies under s. 73.0301 that the applicant is
12liable for delinquent taxes. An applicant for whom a license is not issued under this
13paragraph for delinquent taxes is entitled to a notice under s. 73.0301 (2) (b) 1. b. and
14a hearing under s. 73.0301 (5) (a) but is not entitled to any other notice or hearing
15under this section.
AB587,9,2516 (c) The applicant fails to comply, after appropriate notice, with a subpoena or
17warrant issued by the department of workforce development or a county child
18support agency under s. 59.53 (5) and related to paternity or child support
19proceedings or is delinquent in making court-ordered payments of child or family
20support, maintenance, birth expenses, medical expenses, or other expenses related
21to the support of a child or former spouse, as provided in a memorandum of
22understanding entered into under s. 49.857. An applicant whose application is
23denied under this paragraph for delinquent payments is entitled to a notice and
24hearing under s. 49.857, but is not entitled to any other notice or hearing under this
25section.
AB587,10,4
1218.64 Licenses; other business. (1) Licensed locations. A license issued
2under this subchapter shall specify the location at which the licensee is permitted
3to conduct business. A separate license shall be required for each place of business
4maintained by the licensee.
AB587,10,5 5(2) Assignment. A license issued under this subchapter is not assignable.
AB587,10,7 6(3) Posting. A licensee shall post its license in a conspicuous place at the
7location specified in the license.
AB587,10,12 8(4) Term of license; fee. Every license shall remain in force until suspended
9or revoked in accordance with this subchapter or surrendered by the licensee. Every
10licensee shall, on or before June 1 of each year, pay to the division an annual license
11fee specified by the division by rule and, if required by the division, provide a rider
12or endorsement to increase the amount of any bond required under s. 218.62 (3).
AB587,10,17 13(5) Other business prohibited. No licensee may conduct business as a
14rental-purchase company within any office, room, or place of business in which any
15other business is solicited or engaged in, unless the licensee is authorized to do so,
16in writing, by the division. For the purpose of this subsection, the division may not
17unreasonably withhold any such authorization.
AB587,10,21 18218.65 Revocation, suspension, and restriction of license. (1)
19Discretionary suspension or revocation. The division may issue an order
20suspending or revoking a license issued under this subchapter if the division finds
21that any of the following applies:
AB587,10,2422 (a) The licensee has violated any provision of chs. 421 to 427 relating to
23rental-purchase agreements, any rules promulgated under any such provision, or
24any lawful order of the division under s. 218.68 (1).
AB587,11,3
1(b) A fact or condition exists that, if it had existed at the time of the original
2application for the license, would have warranted the division's refusing to issue the
3license.
AB587,11,54 (c) The licensee has made a material misstatement in an application for a
5license or in any information furnished to the division.
AB587,11,76 (d) The licensee has failed to pay the annual license fee required under s. 218.64
7(4) or has failed to maintain in effect any bond required under s. 218.62 (3).
AB587,11,108 (e) The licensee has failed to provide any additional information, data, or
9records required by the division, within the time period prescribed under s. 218.66
10(2).
AB587,11,1311 (f) The licensee has failed to pay any penalties due under s. 425.312, 425.401,
12or 426.301 within 30 days after receiving notice, by certified mail, that the penalties
13are due.
AB587,11,25 14(2) Mandatory restriction or suspension; child or family support. The
15division shall restrict or suspend a license issued under this subchapter if the
16division finds that the licensee is an individual who fails to comply, after appropriate
17notice, with a subpoena or warrant issued by the department of workforce
18development or a county child support agency under s. 59.53 (5) and related to
19paternity or child support proceedings or who is delinquent in making court-ordered
20payments of child or family support, maintenance, birth expenses, medical expenses,
21or other expenses related to the support of a child or former spouse, as provided in
22a memorandum of understanding entered into under s. 49.857. A licensee whose
23license is restricted or suspended under this subsection is entitled to a notice and
24hearing only as provided in a memorandum of understanding entered into under s.
2549.857 and is not entitled to any other notice or hearing under this section.
AB587,12,6
1(3) Mandatory revocation; delinquent taxes. The division shall revoke a
2license issued under this subchapter if the department of revenue certifies under s.
373.0301 that the licensee is liable for delinquent taxes. A licensee whose license is
4revoked under this subsection for delinquent taxes is entitled to a notice under s.
573.0301 (2) (b) 1. b. and a hearing under s. 73.0301 (5) (a) but is not entitled to any
6other notice or hearing under this section.
AB587,12,14 7(4) Revocation and suspension procedure. Except as provided in subs. (2) and
8(3), no license shall be revoked or suspended except after a hearing under this
9subchapter. A complaint stating the grounds for suspension or revocation together
10with a notice of hearing shall be delivered to the licensee at least 5 days in advance
11of the hearing. In the event the licensee cannot be found, the complaint and notice
12of hearing may be left at the place of business stated in the license and this shall be
13considered the equivalent of delivering the notice of hearing and complaint to the
14licensee.
AB587,12,22 15218.66 Modification of license. (1) Change in place of business. No
16licensee may change its place of business to another location without the prior
17approval of the division, which approval shall not be unreasonably withheld. A
18licensee shall provide the division with at least 15 days' prior written notice of a
19proposed change under this section and shall pay any applicable fees specified by the
20division by rule. Upon approval by the division of the new location, the division shall
21issue an amended license, specifying the date on which the amended license is issued
22and the new location.
AB587,13,7 23(2) Other changes. Except as provided in sub. (1), a licensee shall notify the
24division of any material change to the information provided in the licensee's original
25application for a license under this subchapter or provided in a previous notice of

1change filed by the licensee with the division under this subsection. A licensee shall
2provide the notice required under this subsection within 10 days after the change.
3The licensee shall provide any additional information, data, and records about the
4change to the division within 20 days after the division requests the information,
5data, or records. The division shall determine the cost of investigating and
6processing the change. The licensee shall pay the division's cost within 30 days after
7the division demands payment.
AB587,13,11 8(3) Division approval of other changes. Any change that is subject to the
9notice requirement under sub. (2) is subject to the approval of the division. In
10reviewing the change, the division shall apply the same criteria as the criteria for
11approval of an original license application.
AB587,13,16 12218.67 Annual report; records. (1) Annual report. On or before March 31
13of each year, a licensee shall file a report with the division giving such reasonable and
14relevant information as the division may require concerning the business and
15operations conducted by the licensee. The licensee shall make the report in the form
16prescribed by the division.
AB587,13,21 17(2) Books and records. A licensee shall keep such books and records in the
18licensed location as, in the opinion of the division, will enable the division to enforce
19any provision of chs. 421 to 427 relating to rental-purchase agreements. Every
20licensee shall preserve its records of a rental-purchase agreement for at least 2 years
21after making any final entry with respect to the rental-purchase agreement.
AB587,13,25 22218.68 Powers and duties of division; administration. (1) Orders. The
23division may issue any general order or special order in execution of or
24supplementary to any provision in chs. 421 to 427 relating to rental-purchase
25agreements, but any such order may not conflict with any such provision.
AB587,14,15
1(2) Investigations and examinations. For the purpose of discovering violations
2of any provision in chs. 421 to 427 relating to rental-purchase agreements, the
3division may investigate or examine the business of a licensee transacted under any
4provision of chs. 421 to 427 relating to rental-purchase agreements. The place of
5business, books of accounts, papers, records, safes, and vaults of the licensee shall
6be open to the division for the purpose of an investigation or examination, and the
7division has authority to examine under oath all persons whose testimony is required
8for an investigation or examination. The division shall determine the cost of an
9investigation or examination. The licensee shall pay the cost of an investigation or
10examination. The licensee shall pay the cost of any hearing held for the purpose of
11this subsection, including witness fees, unless the division or a court finds that the
12licensee has not violated any provision of chs. 421 to 427 relating to rental-purchase
13agreements. The licensee shall pay all costs owing under this subsection within 30
14days after the division demands payment. The state may maintain an action for the
15recovery of any costs owing under this subsection.
AB587,14,19 16(3) Verified complaint; mandatory investigation. If 5 or more persons file a
17verified complaint with the division alleging that a rental-purchase company has
18engaged in an act that is subject to action by the division, the division shall
19immediately commence an investigation pursuant to sub. (2).
AB587,14,21 20(4) Rules. The division may promulgate rules for the administration of any
21provision in this subchapter relating to rental-purchase agreements.
AB587,14,24 22(5) Testimonial powers and powers to secure evidence. The division has the
23same power to conduct hearings, take testimony, and secure evidence as is provided
24to the division in ss. 217.17 and 217.18.
AB587,15,5
1(6) Enforcement. The division may investigate any provision in chs. 421 to 427
2relating to rental-purchase agreements or any lawful orders issued under sub. (1)
3to determine if any such provision or lawful order is being violated. The division may
4report any such violations to the attorney general or the district attorney of the
5proper county for prosecution.
AB587, s. 2 6Section 2. 220.02 (2) (b) of the statutes is amended to read:
AB587,15,107 220.02 (2) (b) The lending of money under s. 138.09 or those relating to finance
8companies, motor vehicle dealers, adjustment service companies, community
9currency exchanges, rental-purchase companies, and collection agencies under ch.
10218.
AB587, s. 3 11Section 3. 220.02 (3) of the statutes is amended to read:
AB587,15,2012 220.02 (3) It is the intent of sub. (2) to give the division jurisdiction to enforce
13and carry out all laws relating to banks or banking in this state, including those
14relating to state banks, savings banks, savings and loan associations, and trust
15company banks, and also all laws relating to small loan companies or other loan
16companies or agencies, finance companies, motor vehicle dealers, adjustment service
17companies, community currency exchanges, rental-purchase companies, and
18collection agencies and those relating to sellers of checks under ch. 217, whether
19doing business as corporations, individuals, or otherwise, but to exclude laws
20relating to credit unions.
AB587, s. 4 21Section 4. 409.109 (4) (n) of the statutes is created to read:
AB587,15,2322 409.109 (4) (n) The transfer of an interest under a rental-purchase agreement,
23as defined in s. 421.301 (37u).
AB587, s. 5 24Section 5. 421.301 (7) (intro.) of the statutes is amended to read:
AB587,16,3
1421.301 (7) (intro.) "Cash price" means in chs. 421 to 427, other than subch. VI
2of ch. 422,
the price at which property or services are offered, in the ordinary course
3of business, for sale for cash, and may include:
AB587, s. 6 4Section 6. 421.301 (9) of the statutes is amended to read:
AB587,16,145 421.301 (9) "Consumer credit sale" means a sale of goods, services or an
6interest in land to a customer on credit where the debt is payable in installments or
7a finance charge is imposed and includes any agreement in the form of a bailment
8of goods or lease of goods or real property if the bailee or lessee pays or agrees to pay
9as compensation for use a sum substantially equivalent to or in excess of the
10aggregate value of the goods or real property involved and it is agreed that the bailee
11or lessee will become, or for no other or a nominal consideration has the option to
12become, the owner of the goods or real property upon full compliance with the terms
13of the agreement. "Consumer credit sale" does not include a rental-purchase
14agreement.
AB587, s. 7 15Section 7. 421.301 (10) of the statutes is amended to read:
AB587,16,2316 421.301 (10) "Consumer credit transaction" means a consumer transaction
17between a merchant and a customer in which real or personal property, services or
18money is acquired on credit and the customer's obligation is payable in installments
19or for which credit a finance charge is or may be imposed, whether such transaction
20is pursuant to an open-end credit plan or is a transaction involving other than
21open-end credit. The term includes consumer credit sales, consumer loans,
22consumer leases and transactions pursuant to open-end credit plans. "Consumer
23credit transaction" does not include a rental-purchase agreement.
AB587, s. 8 24Section 8. 421.301 (11) of the statutes is amended to read:
AB587,17,3
1421.301 (11) "Consumer lease" means a lease of goods which a merchant makes
2to a customer for a term exceeding 4 months, but does not include a rental-purchase
3agreement
.
AB587, s. 9 4Section 9. 421.301 (12) of the statutes is amended to read:
AB587,17,95 421.301 (12) "Consumer loan" means a loan made by a lender to a customer
6which is payable in installments or for which a finance charge is or may be imposed,
7and includes transactions pursuant to an open-end credit plan other than a seller
8credit card, but does not include a transaction relating to a rental-purchase
9agreement
.
AB587, s. 10 10Section 10. 421.301 (20) (intro.) of the statutes is amended to read:
AB587,17,1911 421.301 (20) (intro.) "Finance charge" means the sum of all charges, payable
12directly or indirectly by the customer as an incident to or as a condition of the
13extension of credit, whether paid or payable by the customer, the creditor or any other
14person on behalf of the customer to the creditor or to a 3rd party unless the creditor
15had no notice or knowledge of the charges paid or payable to the 3rd party. The term
16does not include any charge with respect to a motor vehicle consumer lease or to a
17rental-purchase agreement
. The term includes the following types of charges to the
18extent they are not permitted additional charges under s. 422.202, delinquency
19charges under s. 422.203 or deferral charges under s. 422.204:
AB587, s. 11 20Section 11. 421.301 (21) of the statutes is amended to read:
AB587,17,2421 421.301 (21) "Goods" has the meaning given in s. 409.102 (1) (ks) and includes
22goods not in existence at the time the transaction is entered into and goods which are
23or are to become fixtures, but does not include any goods under a rental-purchase
24agreement
.
AB587, s. 12 25Section 12. 421.301 (34) of the statutes is amended to read:
AB587,18,2
1421.301 (34) "Personal property" includes but is not limited to goods, and does
2not include rental property
.
AB587, s. 13 3Section 13. 421.301 (37t) of the statutes is created to read:
AB587,18,64 421.301 (37t) "Rental property" means property rented under a
5rental-purchase agreement but does not include any motor vehicle, as defined in s.
6340.01 (35).
AB587, s. 14 7Section 14. 421.301 (37u) of the statutes is created to read:
AB587,18,108 421.301 (37u) "Rental-purchase agreement" means an agreement between a
9rental-purchase company and a lessee for the use of rental property if all of the
10following apply:
AB587,18,1211 (a) The rental property is to be used primarily for personal, family, or household
12purposes.
AB587,18,1413 (b) The agreement has an initial term of 4 months or less and is automatically
14renewable with each payment after the initial term.
AB587,18,1615 (c) The agreement does not obligate or require the lessee to renew the
16agreement beyond the initial term.
AB587,18,1817 (d) The agreement permits, but does not obligate, the lessee to acquire
18ownership of the rental property.
AB587, s. 15 19Section 15. 421.301 (37v) of the statutes is created to read:
AB587,18,2220 421.301 (37v) "Rental-purchase company" means a person engaged in the
21business of entering into rental-purchase agreements in this state or acquiring or
22servicing rental-purchase agreements that are entered into in this state.
AB587, s. 16 23Section 16. 421.301 (40) of the statutes is amended to read:
AB587,19,324 421.301 (40) "Security interest" means a real property mortgage, deed of trust,
25seller's interest in real estate under a land contract, any interest in property which

1secures payment or performance of an obligation under ch. 409 or any other
2consensual or confessed lien whether or not recorded, but does not include an interest
3in any property relating to a rental-purchase agreement
.
AB587, s. 17 4Section 17. 422.102 of the statutes is repealed and recreated to read:
AB587,19,5 5422.102 Scope. (1) Subchapters I to V apply to consumer credit transactions.
AB587,19,6 6(2) Subchapter VI applies to rental-purchase agreements.
AB587, s. 18 7Section 18. Subchapter VI of chapter 422 [precedes 422.601] of the statutes
8is created to read:
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