AB218: Bill Text

AB218,36,19 1. Any money of the individual held in trust for the benefit of the individual.

AB218,36,21 2. Sixty-five percent of any portion of the set-up fee received pursuant to sub. (22) (d) 2. which has not been credited against settlement fees.

AB218,37,2 (26) Periodic reports and retention of records. (a) A provider shall provide the accounting required by par. (b) upon cancellation or termination of an agreement. Before cancellation or termination of any agreement, a provider shall also provide the accounting required by par. (b) at least once each month and within 5 business days after a request by an individual, but the provider need not comply with more than one request in any calendar month.

AB218,37,4 (b) A provider, in a record, shall provide each individual for whom it has established a plan an accounting of all of the following information:

AB218,37,5 1. The amount of money received from the individual since the last report.

AB218,37,8 2. The amounts and dates of disbursement made on the individual's behalf, or by the individual upon the direction of the provider, since the last report to each creditor listed in the plan.

AB218,37,9 3. The amounts deducted from the amount received from the individual.

AB218,37,10 4. The amount held in reserve.

AB218,37,13 5. If, since the last report, a creditor has agreed to accept as payment in full an amount less than the principal amount of the debt owed by the individual, all of the following:

AB218,37,14 a. The total amount and terms of the settlement.

AB218,37,15 b. The amount of the debt when the individual assented to the plan.

AB218,37,16 c. The amount of the debt when the creditor agreed to the settlement.

AB218,37,17 d. The calculation of a settlement fee.

AB218,37,22 (c) A provider shall maintain records for each individual for whom it provides debt-management services for 5 years after the final payment made by the individual and produce a copy of them to the individual within a reasonable time after a request for them. The provider may use electronic or other means of storage of the records.

AB218,37,24 (27) Prohibited acts and practices. (a) A provider may not, directly or indirectly, do any of the following:

AB218,37,25 1. Misappropriate or misapply money held in trust.

AB218,38,3 2. Settle a debt on behalf of an individual for more than 50 percent of the principal amount of the debt owed a creditor, unless the individual assents to the settlement after the creditor has assented.

AB218,38,6 3. Take a power of attorney that authorizes it to settle a debt, unless the power of attorney expressly limits the provider's authority to settle debts for not more than 50 percent of the principal amount of the debt owed a creditor.

AB218,38,8 4. Exercise or attempt to exercise a power of attorney after an individual has terminated an agreement.

AB218,38,13 5. Initiate a transfer from an individual's account at a financial institution or with another person unless the transfer is a return of money to the individual or unless the transfer is before termination of an agreement, properly authorized by the agreement and this section, and for payment to one or more creditors pursuant to a plan or payment of a fee.

AB218,38,15 6. Offer a gift or bonus, premium, reward, or other compensation to an individual for executing an agreement.

AB218,38,20 7. Offer, pay, or give a gift or bonus, premium, reward, or other compensation to a person for referring a prospective customer, if the person making the referral has a financial interest in the outcome of debt-management services provided to the customer, unless neither the provider nor the person making the referral communicates to the prospective customer the identity of the source of the referral.

AB218,38,22 8. Receive a bonus, commission, or other benefit for referring an individual to a person.

AB218,39,2 9. Structure a plan in a manner that would result in a negative amortization of any of an individual's debts, unless a creditor that is owed a negatively amortizing debt agrees to refund or waive the finance charge upon payment of the principal amount of the debt.

AB218,39,4 10. Compensate its employees on the basis of a formula that incorporates the number of individuals the employee induces to enter into agreements.

AB218,39,8 11. Settle a debt or lead an individual to believe that a payment to a creditor is in settlement of a debt to the creditor unless, at the time of settlement, the individual receives a certification by the creditor that the payment is in full settlement of the debt.

AB218,39,9 12. Make a representation of any of the following:

AB218,39,10 a. That the provider will furnish money to pay bills or prevent attachments.

AB218,39,12 b. That payment of a certain amount will permit satisfaction of a certain amount or range of indebtedness.

AB218,39,14 c. That participation in a plan will or may prevent litigation, garnishment, attachment, repossession, foreclosure, eviction, or loss of employment.

AB218,39,16 13. Misrepresent that it is authorized or competent to furnish legal advice or perform legal services.

AB218,39,20 14. Represent that it is a not-for-profit entity unless it is organized and properly operating as a not-for-profit under the law of the state in which it was formed or that it is a tax-exempt entity unless it has received certification of tax-exempt status from the Internal Revenue Service.

AB218,39,22 15. Take a confession of judgment or power of attorney to confess judgment against an individual.

AB218,39,24 16. Employ an unfair, unconscionable, or deceptive act or practice, including the knowing omission of any material information.

AB218,40,2 (b) If a provider furnishes debt-management services to an individual, the provider may not, directly or indirectly, do any of the following:

AB218,40,3 1. Purchase a debt or obligation of the individual.

AB218,40,4 2. Receive from or on behalf of the individual any of the following:

AB218,40,6 a. A promissory note or other negotiable instrument other than a check or a demand draft.

AB218,40,7 b. A post-dated check or demand draft.

AB218,40,9 3. Lend money or provide credit to the individual, except as a deferral of a settlement fee at no additional expense to the individual.

AB218,40,11 4. Obtain a mortgage or other security interest from any person in connection with the services provided to the individual.

AB218,40,14 5. Except as permitted by federal law, disclose the identity or identifying information of the individual or the identity of the individual's creditors, except to any of the following:

AB218,40,15 a. The division, upon proper demand.

AB218,40,17 b. A creditor of the individual, to the extent necessary to secure the cooperation of the creditor in a plan.

AB218,40,18 c. The extent necessary to administer the plan.

AB218,40,20 6. Except as otherwise provided in sub. (22) (f), provide the individual less than the full benefit of a compromise of a debt arranged by the provider.

AB218,40,24 7. Charge the individual for or provide credit or other insurance, coupons for goods or services, membership in a club, access to computers or the Internet, or any other matter not directly related to debt-management services or educational services concerning personal finance.

AB218,41,3 8. Furnish legal advice or perform legal services, unless the person furnishing that advice to or performing those services for the individual is licensed to practice law.

AB218,41,4 (c) This section does not authorize any person to engage in the practice of law.

AB218,41,9 (d) A provider may not receive a gift or bonus, premium, reward, or other compensation, directly or indirectly, for advising, arranging, or assisting an individual in connection with obtaining, an extension of credit or other service from a lender or service provider, except for educational or counseling services required in connection with a government-sponsored program.

AB218,41,15 (e) Unless a person supplies goods, services, or facilities generally and supplies them to the provider at a cost no greater than the cost the person generally charges to others, a provider may not purchase goods, services, or facilities from the person if an employee or a person that the provider should reasonably know is an affiliate of the provider owns more than 10 percent of the person or is an employee or affiliate of the person.

AB218,41,20 (28) Notice of litigation. No later than 30 days after a provider has been served with notice of a civil action for violation of this section by or on behalf of an individual who resides in this state at either the time of an agreement or the time the notice is served, the provider shall notify the division in a record that it has been sued.

AB218,41,23 (29) Advertising. A provider that advertises debt-management services shall disclose, in an easily comprehensible manner, the information specified in sub. (16) (d) 3. and 4.

AB218,42,2 (30) Liability for the conduct of other persons. If a provider delegates any of its duties or obligations under an agreement or this section to another person, including an independent contractor, the provider is liable for conduct of the person which, if done by the provider, would violate the agreement or this section.

AB218,42,6 (31) Powers of division. (a) The division may act on its own initiative or in response to complaints and may receive complaints, take action to obtain voluntary compliance with this section, refer cases to the attorney general, and seek or provide remedies as provided in this section.

AB218,42,13 (b) The division may investigate and examine, in this state or elsewhere, by subpoena or otherwise, the activities, books, accounts, and records of a person that provides or offers to provide debt-management services, or a person to which a provider has delegated its obligations under an agreement or this section, to determine compliance with this section. Information that identifies individuals who have agreements with the provider shall not be disclosed to the public. In connection with the investigation, the division may do any of the following:

AB218,42,15 1. Charge the person the reasonable costs necessarily incurred to conduct the examination.

AB218,42,17 2. Require or permit a person to file a statement, verified under oath or affirmation, as to all the facts and circumstances of a matter to be investigated.

AB218,42,21 3. Seek a court order authorizing seizure from a financial institution at which the person maintains a trust account required by sub. (21), any or all money, books, records, accounts, and other property of the provider that is in the control of the financial institution and relates to individuals who reside in this state.

AB218,42,23 (c) The division may adopt rules to implement the provisions of this section in accordance with subch. II of ch. 227.

AB218,43,2 (d) The division may enter into cooperative arrangements with any other federal or state agency having authority over providers and may exchange with any of those agencies information about a provider, including information obtained during an examination of the provider.

AB218,43,4 (e) The division, by rule, shall establish reasonable fees to be paid by providers for the expense of administering this section.

AB218,43,13 (f) The division, by rule, shall adopt dollar amounts instead of those specified in subs. (2), (5), (9), (13), (22), (32), and (34) to reflect inflation, as measured by the United States bureau of labor statistics consumer price index for all urban consumers or, if that index is not available, another index adopted by rule by the division. The division shall adopt a base year and adjust the dollar amounts, effective on July 1 of each year, if the change in the index from the base year, as of December 31 of the preceding year, is at least 10 percent. The dollar amount must be rounded to the nearest $100, except that the amounts in sub. (22) must be rounded to the nearest dollar.

AB218,43,15 (g) The division shall notify licensed providers of any change in dollar amounts made pursuant to par. (f) and make that information available to the public.

AB218,43,17 (32) Administrative remedies. (a) The division may enforce this section and rules adopted under this section by taking one or more of the following actions:

AB218,43,19 1. Ordering a provider or a director, employee, or other agent of a provider to cease and desist from any violations.

AB218,43,22 2. Ordering a provider or a person that has caused a violation to correct the violation, including making restitution of money or property to a person aggrieved by a violation.

AB218,43,25 3. Subject to adjustment of the dollar amount pursuant to sub. (31) (f), recovering in a civil action from a provider or a person that has caused a violation a forfeiture not exceeding $10,000 for each violation.

AB218,44,1 4. Prosecuting a civil action to do any of the following:

AB218,44,2 a. Enforce an order.

AB218,44,3 b. Obtain restitution or an injunction or other equitable relief, or both.

AB218,44,4 5. Intervening in an action brought under sub. (34).

AB218,44,8 (b) Subject to adjustment of the dollar amount pursuant to sub. (31) (f), if a person violates or knowingly authorizes, directs, or aids in the violation of a final order issued under par. (a) 1. or 2., the division may recover in a civil action a forfeiture not exceeding $20,000 for each violation.

AB218,44,9 (c) The division may maintain an action to enforce this section.

AB218,44,12 (d) The division may recover the reasonable costs of enforcing the section under pars. (a) to (c), including attorney's fees based on the hours reasonably expended and the hourly rates for attorneys of comparable experience in the community.

AB218,44,17 (e) In determining the amount of a civil penalty to impose under par. (a) or (b), a court shall consider the seriousness of the violation, the good faith of the violator, any previous violations by the violator, the deleterious effect of the violation on the public, the net worth of the violator, and any other factor the court considers relevant to the determination of the civil penalty.

AB218,44,19 (33) Suspension, revocation, or nonrenewal of license. (a) In this subsection, "insolvent" means any of the following:

AB218,44,21 1. Having generally ceased to pay debts in the ordinary course of business other than as a result of a good-faith dispute.

AB218,44,22 2. Being unable to pay debts as they become due.

AB218,44,24 3. Being insolvent within the meaning of the federal bankruptcy law, 11 USC 101 to 1532.

AB218,45,2 (b) The division may suspend, revoke, or deny renewal of a provider's license if any of the following apply:

AB218,45,4 1. A fact or condition exists that, if it had existed when the licensee applied for licensure as a provider, would have been a reason for denying licensure.

AB218,45,6 2. The provider has committed a material violation of this section or a rule or order of the division under this section.

AB218,45,7 3. The provider is insolvent.

AB218,45,11 4. The provider or an employee, affiliate, or agent of the provider has refused to permit the division to make an examination authorized by this section, failed to comply with sub. (31) (b) 2. within 15 days after request, or made a material misrepresentation or omission in complying with sub. (31) (b) 2.

AB218,45,13 5. The provider has not responded within a reasonable time and in an appropriate manner to communications from the division.

AB218,45,15 6. The provider fails to pay any fee required under this section or to maintain in effect the surety bond required under sub. (13).

AB218,45,18 (c) In accordance with s. 73.0301, the division shall revoke a license if the department of revenue has certified under s. 73.0301 that the licensee is liable for delinquent taxes.

AB218,46,2 (d) In accordance with a memorandum of understanding entered into under s. 49.857, the division shall restrict or suspend a license if the licensee is an individual who fails to comply, after appropriate notice, with a subpoena or warrant issued by the department of workforce development or a county child support agency under s. 59.53 (5) and related to paternity or child support proceedings or who is delinquent in making court-ordered payments of child or family support, maintenance, birth expenses, medical expenses or other expenses related to the support of a child or former spouse.