AB218: Bill Text

AB218,16,24 d. The insurance is payable to the applicant, the individuals who have agreements with the applicant, and this state, as their interests may appear.

AB218,17,2 e. The insurance is not subject to cancellation by the applicant without the approval of the division.

AB218,17,6 6. Disclose the total amount of money received by the applicant pursuant to plans during the preceding 12 months from or on behalf of individuals who reside in this state and the total amount of money distributed to creditors of those individuals during that period.

AB218,17,9 7. Disclose, to the best of the applicant's knowledge, the gross amount of money accumulated during the preceding 12 months pursuant to plans by or on behalf of individuals who reside in this state and with whom the applicant has agreements.

AB218,17,11 8. Provide any other information that the division reasonably requires to perform the division's duties under this subsection.

AB218,17,14 (c) Except for the information required by sub. (6) (g), (n), and (q) and the addresses required by sub. (6) (d), the division shall make the information in an application for renewal of licensure as a provider available to the public.

AB218,17,17 (d) If a licensed provider files a timely and complete application for renewal of licensure, the license remains effective until the division, in a record, notifies the applicant of a denial and states the reasons for the denial.

AB218,18,2 (e) If the division denies an application for renewal of licensure as a provider, the applicant, within 30 days after receiving notice of the denial, may appeal and request a hearing pursuant to subch. III of ch. 227. Subject to sub. (33), while the appeal is pending the applicant shall continue to provide debt-management services to individuals with whom it has agreements. If the denial is affirmed, subject to the division's order and sub. (33), the applicant shall continue to provide debt-management services to individuals with whom it has agreements until, with the approval of the division, it transfers the agreements to another licensed provider or returns to the individuals all unexpended money that is under the applicant's control.

AB218,18,10 (12) License or registration in another state. If a provider holds a license or certificate of registration in another state authorizing it to provide debt-management services, the provider may submit a copy of that license or certificate and the application for it instead of an application in the form prescribed by sub. (5) (a), (6), or (11) (b). The division shall accept the application and the license or certificate from the other state as an application for licensure as a provider or for renewal of licensure as a provider, as appropriate, in this state if all of the following apply:

AB218,18,13 (a) The application in the other state contains information substantially similar to or more comprehensive than that required in an application submitted in this state.

AB218,18,15 (b) The applicant provides the information required by sub. (6) (a), (c), (j), (L), and (m).

AB218,18,18 (c) The applicant, verified under oath or affirmation, certifies that the information contained in the application is current or, to the extent it is not current, supplements the application to make the information current.

AB218,18,21 (13) Bond required. (a) A provider that is required to be licensed under this section shall file a surety bond with the division, which must satisfy all of the following:

AB218,18,23 1. Be in effect during the period of licensure and for 2 years after the provider ceases providing debt-management services to individuals in this state.

AB218,19,3 2. Run to this state for the benefit of this state and of individuals who reside in this state when they agree to receive debt-management services from the provider, as their interests may appear.

AB218,19,5 (b) Subject to adjustment of the dollar amount pursuant to sub. (31) (f), a surety bond filed pursuant to par. (a) must satisfy all of the following:

AB218,19,9 1. Be in the amount of $50,000 or other larger or smaller amount that the division determines is warranted by the financial condition and business experience of the provider, the history of the provider in performing debt-management services, the risk to individuals, and any other factor the division considers appropriate.

AB218,19,12 2. Be issued by a bonding, surety, or insurance company authorized to do business in this state and rated at least "A" by a nationally recognized rating organization.

AB218,19,14 3. Have payment conditioned upon noncompliance of the provider or its agent with this section.

AB218,19,21 (c) If the principal amount of a surety bond is reduced by payment of a claim or a judgment, the provider shall immediately notify the division and, within 30 days after notice by the division, file a new or additional surety bond in an amount set by the division. The amount of the new or additional bond must be at least the amount of the bond immediately before payment of the claim or judgment. If for any reason a surety terminates a bond, the provider shall immediately file a new surety bond in the amount of $50,000 or other amount determined pursuant to par. (b).

AB218,19,23 (d) The division or an individual may obtain satisfaction out of the surety bond procured pursuant to this subsection if any of the following apply:

AB218,19,25 1. The division assesses expenses under sub. (31) (b) 1., issues a final order under sub. (32) (a) 2., or recovers a final judgment under sub. (32) (a) 4. or 5. or (d).

AB218,20,2 2. An individual recovers a final judgment pursuant to sub. (34) (a), (b), or (c) 1., 2., or 4.

AB218,20,6 (e) If claims against a surety bond exceed or are reasonably expected to exceed the amount of the bond, the division, on the initiative of the division or on petition of the surety, shall, unless the proceeds are adequate to pay all costs, judgments, and claims, distribute the proceeds in the following order:

AB218,20,8 1. To satisfaction of a final order or judgment under sub. (32) (a) 2., 4., or 5. or (d).

AB218,20,10 2. To final judgments recovered by individuals pursuant to sub. (34) (a), (b), or (c) 1., 2., or 4., pro rata.

AB218,20,12 3. To claims of individuals established to the satisfaction of the division, pro rata.

AB218,20,14 4. If a final order or judgment is issued under sub. (32) (a), to the expenses charged pursuant to sub. (31) (b) 1.

AB218,20,16 (14) Requirement of good faith. A provider shall act in good faith in all matters under this section.

AB218,20,20 (15) Customer service. A provider that is required to be licensed under this section shall maintain a toll-free communication system, staffed at a level that reasonably permits an individual to speak to a certified counselor or customer-service representative, as appropriate, during ordinary business hours.

AB218,20,25 (16) Prerequisites for providing debt-management services. (a) Before providing debt-management services, a licensed provider shall give the individual an itemized list of goods and services and the charges for each. The list must be clear and conspicuous, be in a record the individual may keep whether or not the individual assents to an agreement, and describe all of the following:

AB218,21,2 1. The goods and services the provider offers free of additional charge if the individual enters into an agreement.

AB218,21,4 2. The good and services the provider offers for a charge if the individual does not enter into an agreement.

AB218,21,6 3. The good and services the provider offers for a charge if the individual enters into an agreement, using the following terminology, as applicable, and format:

AB218,21,7 Set-up fee        .................................................................................

AB218,21,8            dollar amount of fee

AB218,21,9 Monthly service fee    .................................................................................

AB218,21,10            dollar amount of fee or method of determining amount

AB218,21,11 Settlement fee      .................................................................................

AB218,21,12            dollar amount of fee or method of determining amount

AB218,21,13 Goods and services in addition to those provided in connection with a plan:

AB218,21,14 .....................       .................................................................................

AB218,21,15   (item)      dollar amount or method of determining amount

AB218,21,16 .....................       .................................................................................

AB218,21,17   (item)      dollar amount or method of determining amount

AB218,21,19 (b) A provider may not furnish debt-management services unless the provider, through the services of a certified counselor, has satisfied all of the following:

AB218,21,21 1. The provider provides the individual with reasonable education about the management of personal finance.

AB218,21,22 2. The provider has prepared a financial analysis.

AB218,21,24 3. If the individual is to make regular, periodic payments, the provider has satisfied all of the following:

AB218,21,25 a. The provider has prepared a plan for the individual.

AB218,22,4 b. The provider has made a determination, based on the provider's analysis of the information provided by the individual and otherwise available to it, that the plan is suitable for the individual and the individual will be able to meet the payment obligations under the plan.

AB218,22,7 c. The provider believes that each creditor of the individual listed as a participating creditor in the plan will accept payment of the individual's debts as provided in the plan.

AB218,22,9 (c) Before an individual assents to an agreement to engage in a plan, a provider shall do all of the following:

AB218,22,12 1. Provide the individual with a copy of the analysis and plan required by par. (b) in a record that identifies the provider and that the individual may keep whether or not the individual assents to the agreement.

AB218,22,15 2. Inform the individual of the availability, at the individual's option, of assistance by a toll-free communication system or in person to discuss the financial analysis and plan required by par. (b).

AB218,22,18 3. With respect to all creditors identified by the individual or otherwise known by the provider to be creditors of the individual, provide the individual with a list of all of the following:

AB218,22,20 a. Creditors that the provider expects to participate in the plan and grant concessions.

AB218,22,22 b. Creditors that the provider expects to participate in the plan but not grant concessions.

AB218,22,23 c. Creditors that the provider expects not to participate in the plan.

AB218,22,24 d. All other creditors.

AB218,23,4 (d) Before an individual assents to an agreement to engage in a plan, the provider shall inform the individual, in a record that contains nothing else, that is given separately, and that the individual may keep whether or not the individual assents to the agreement, of all of the following:

AB218,23,5 1. The name and business address of the provider.

AB218,23,7 2. That plans are not suitable for all individuals and the individual may ask the provider about other ways, including bankruptcy, to deal with indebtedness.

AB218,23,9 3. That establishment of a plan may adversely affect the individual's credit rating or credit scores.

AB218,23,11 4. That nonpayment of debt may lead creditors to increase finance and other charges or undertake collection activity, including litigation.

AB218,23,13 5. Unless it is not true, that the provider may receive compensation from the creditors of the individual.

AB218,23,16 6. That, unless the individual is insolvent, if a creditor settles for less than the full amount of the debt, the plan may result in the creation of taxable income to the individual, even though the individual does not receive any money.

AB218,23,20 (e) If a provider may receive payments from an individual's creditors and the plan contemplates that the individual's creditors will reduce finance charges or fees for late payment, default, or delinquency, the provider may comply with par. (d) by providing the following disclosure, surrounded by black lines:

AB218,23,21 IMPORTANT INFORMATION FOR YOU TO CONSIDER

AB218,23,24 (1) Debt-management plans are not right for all individuals, and you may ask us to provide information about other ways, including bankruptcy, to deal with your debts.

AB218,23,25 (2) Using a debt-management plan may hurt your credit rating or credit scores.

AB218,24,1 (3) We may receive compensation for our services from your creditors.

AB218,24,2      ..................................................................................

AB218,24,3        Name and business address of provider

AB218,24,7 (f) If a provider will not receive payments from an individual's creditors and the plan contemplates that the individual's creditors will reduce finance charges or fees for late payment, default, or delinquency, a provider may comply with par. (d) by providing the following disclosure, surrounded by black lines:

AB218,24,8 IMPORTANT INFORMATION FOR YOU TO CONSIDER

AB218,24,11 (1) Debt-management plans are not right for all individuals, and you may ask us to provide information about other ways, including bankruptcy, to deal with your debts.

AB218,24,12 (2) Using a debt-management plan may hurt your credit rating or credit scores.

AB218,24,13      ..................................................................................

AB218,24,14        Name and business address of provider

AB218,24,17 (g) If a plan contemplates that creditors will settle debts for less than the full principal amount of debt owed, a provider may comply with par. (d) by providing the following disclosure, surrounded by black lines:

AB218,24,18 IMPORTANT INFORMATION FOR YOU TO CONSIDER

AB218,24,20 (1) Our program is not right for all individuals, and you may ask us to provide information about bankruptcy and other ways to deal with your debts.

AB218,24,21 (2) Nonpayment of your debts under our program may:

AB218,24,22 • hurt your credit rating or credit scores;

AB218,24,23 • lead your creditors to increase finance and other charges; and

AB218,24,24 • lead your creditors to undertake activity, including lawsuits, to collect the

AB218,24,25 debts.

AB218,25,2 (3) Reduction of debt under our program may result in taxable income to you, even though you will not actually receive any money.