SB530, s. 11 7Section 11. 138.10 (15) of the statutes is amended to read:
SB530,8,98 138.10 (15) Exception. This section does not apply to any person that is
9licensed under s. 138.09 or 138.14.
SB530, s. 12 10Section 12. 138.14 of the statutes is created to read:
SB530,8,11 11138.14 Consumer small loans. (1) Definitions. In this section:
SB530,8,1412 (a) "Affiliate" means, with respect to a person, another person who owns or
13controls, is owned or controlled by, or is under common ownership or control with,
14such person. In this paragraph "control" means any of the following:
SB530,8,1715 1. For a corporation, direct or indirect ownership of, or the right to control, 10
16percent or more of the voting shares of the corporation, or the ability of a person to
17elect a majority of the directors or otherwise effect a change in policy.
SB530,8,1918 2. For any entity other than a corporation, the ability to change the active or
19passive principals of the organization.
SB530,8,2020 (b) "Check" has the meaning given in s. 403.104 (6).
SB530,8,2321 (c) "Consumer small loan" means an unsecured consumer loan, including an
22indebtedness evidenced by a promissory note or an agreement to defer presenting a
23check or debiting a consumer's bank account for a fee.
SB530,8,2424 (d) "Database" means the statewide database described in sub. (14).
SB530,9,3
1(e) "Database provider" means a 3rd-party provider with whom the
2department contracts to operate the database or, if the division elects to operate the
3database, the division.
SB530,9,44 (f) "Department" means the department of financial institutions.
SB530,9,55 (g) "Division" means the division of banking.
SB530,9,66 (h) "General order" means an order that is not a special order.
SB530,9,87 (i) "Licensee" means a person holding a license issued by the division under sub.
8(5).
SB530,9,109 (j) "Maturity date" means the date specified when originating a consumer small
10loan on which the loan is required to be paid in full.
SB530,9,1111 (k) "Special order" means an order against a person.
SB530,9,18 12(2) License required. A person may not originate or service a consumer small
13loan involving a Wisconsin resident without first having obtained from the division
14a license under sub. (5) for each place of business at which the person originates or
15services consumer small loans involving Wisconsin residents. Such a license is
16required for, and this section applies to, all consumer small loans made to a
17Wisconsin resident, regardless of whether the loan is made by face-to-face contact,
18mail, telephone, Internet, or any other means.
SB530,9,20 19(3) Exemptions. This section does not apply to banks, savings banks, savings
20and loan associations, trust companies, credit unions, or any of their affiliates.
SB530,9,23 21(4) Applications; fees; bond. (a) 1. Application for licenses under sub. (5) shall
22be made to the division in writing in the form and manner prescribed by the division
23and shall include all of the following:
SB530,9,2524 a. Except as provided in subd. 3., if the applicant is an individual, the
25applicant's social security number.
SB530,10,2
1b. If the applicant is not an individual, the applicant's federal employer
2identification number.
SB530,10,43 2. The division may not disclose any information received under subd. 1. a. or
4b. to any person except as follows:
SB530,10,75 a. The division may disclose information under subd. 1. a. or b. to the
6department of revenue for the sole purpose of requesting certifications under s.
773.0301.
SB530,10,108 b. The division may disclose information under subd. 1. a. to the department
9of workforce development in accordance with a memorandum of understanding
10under s. 49.857.
SB530,10,1611 3. If an applicant who is an individual does not have a social security number,
12the applicant, as a condition of applying for a license, shall submit a statement made
13or subscribed under oath or affirmation to the division that the applicant does not
14have a social security number. The form of the statement shall be prescribed by the
15department of workforce development. Any license issued in reliance upon a false
16statement submitted by an applicant is invalid.
SB530,10,2117 (b) At the time of making application, an applicant for a license shall pay to the
18division a nonrefundable $300 fee for investigating the application and a $500
19annual license fee. If the cost of the investigation exceeds $300, the applicant shall
20upon demand of the division pay to the division the amount by which the cost of the
21investigation exceeds the nonrefundable fee.
SB530,10,2522 (c) The division shall require any applicant or licensee to file and maintain in
23force a bond in a sum not to exceed $5,000 for each place of business at which the
24applicant or licensee makes consumer small loans to a Wisconsin resident. The bond
25shall be in a form prescribed by and acceptable to the division.
SB530,11,9
1(5) Licenses. (a) Upon the filing of an application under sub. (4) and the
2payment of the required fees, the division shall investigate the relevant facts. Except
3as provided in par. (b), if the division finds that the character and general fitness and
4the financial responsibility of the applicant, and the members thereof if the applicant
5is a partnership, limited liability company, or association, and the officers and
6directors thereof if the applicant is a corporation, warrant the belief that the business
7will be operated in compliance with this section, the division shall issue a license to
8the applicant. If the division does not make such finding, the division shall deny the
9application.
SB530,11,1110 (b) The division may not issue a license to an applicant if any of the following
11applies:
SB530,11,1212 1. The applicant fails to provide any information required under sub. (4) (a).
SB530,11,1413 2. The department of revenue certifies under s. 73.0301 that the applicant is
14liable for delinquent taxes.
SB530,11,1815 3. The applicant fails to comply, after appropriate notice, with a subpoena or
16warrant issued by the department of workforce development or a county child
17support agency under s. 59.53 (5) and related to paternity or child support
18proceedings.
SB530,11,2219 4. The applicant is delinquent in making court-ordered payments of child or
20family support, maintenance, birth expenses, medical expenses, or other expenses
21related to the support of a child or former spouse, as provided in a memorandum of
22understanding entered into under s. 49.857.
SB530,12,223 (c) A license shall remain in force and effect until suspended or revoked in
24accordance with this section or surrendered by the licensee, and a licensee shall, on

1or before each December 10, pay to the division the annual license fee for the next
2succeeding calendar year.
SB530,12,43 (d) A license is not assignable and permits operation under it only at or from
4the place of business specified in the license.
SB530,12,75 (e) A licensee shall conspicuously post a license at the place of business where
6the licensee makes consumer small loans, or if conducting business through the
7Internet, on the licensee's Web site so that the license is easily viewed by a consumer.
SB530,12,14 8(6) Relocation; other business. (a) Whenever a licensee changes the address
9of its place of business to another location within the same city, village, or town, the
10licensee shall give written notice thereof, in a form and manner prescribed by the
11division, to the division within 10 business days of the relocation and the division
12shall replace the original license with an amended license showing the new address.
13No change in the place of business of a licensee to a different city, village, or town is
14permitted under the same license.
SB530,12,1715 (b) 1. Except as provided in subd. 2., a licensee may conduct, and permit others
16to conduct, at the place of business specified in its license, one or more of the following
17businesses not subject to this section:
SB530,12,1818 a. A currency exchange under s. 218.05.
SB530,12,1919 b. A seller of checks business under ch. 217.
SB530,12,2020 c. A loan business under s. 138.09.
SB530,12,2121 d. A sales finance company under ss. 218.0101 to 218.0163.
SB530,12,2422 2. A licensee may not sell merchandise or conduct other business at the place
23of business specified in the license unless written authorization is granted to the
24licensee by the division.
SB530,13,5
1(7) Records; reports. (a) Except as provided in par. (b), a licensee shall keep
2such books and records in the licensee's place of business that, in the opinion of the
3division, will enable the division to determine compliance with this section. A
4licensee shall preserve the records of final entry used in such business for a period
5of at least 2 years after the making of any loan recorded therein.
SB530,13,96 (b) A licensee may keep the books and records specified in par. (a) at a single
7location inside or outside of this state if the books and records are kept at a place of
8business licensed under this section. A licensee shall organize the books and records
9by the place of business where the records originated.
SB530,13,1210 (c) A licensee shall keep the books and records affecting loans made pursuant
11to this section separate and distinct from the records of any other business of the
12licensee.
SB530,13,1713 (d) A licensee shall make an annual report to the division for each calendar year
14on or before March 15 of the following year. The report shall include business
15transacted by the licensee under this section and shall give all reasonable and
16relevant information that the division may require. The reports shall be made in the
17form and manner prescribed by the division.
SB530,13,19 18(8) Powers of the division. (a) The division may issue any general or special
19order in execution of or supplementary to this section.
SB530,13,2220 (b) The division may promulgate such rules as it considers necessary for the
21administration of this section, including rules establishing database transaction fees
22and other fees considered reasonable and necessary by the division.
SB530,13,2423 (c) The division shall have the same power to conduct hearings, take testimony,
24and secure evidence as is provided in ss. 217.17 and 217.18.
SB530,14,8
1(d) The division for the purpose of discovering violations of this section may
2investigate the business of a licensee transacted under this section, and shall
3investigate convictions reported to the division by any district attorney for violation
4by a licensee of this section. The place of business, books of account, papers, records,
5safes, and vaults of a licensee shall be open to inspection and examination by the
6division for the purpose of such investigation and the division may examine under
7oath all persons whose testimony the division may require relative to such
8investigation.
SB530,14,139 (e) The cost of any investigation, examination, or hearing, including witness
10fees or any other expenses, conducted by the division under this section involving a
11licensee shall be paid by the licensee within 30 days after demand therefore by the
12division, and the state may maintain an action for the recovery of such costs and
13expenses.
SB530,14,1514 (f) Actual costs incurred by the division to examine books and records
15maintained outside of this state shall be paid by the licensee.
SB530,14,17 16(9) Revocation and suspension of licenses. (a) The division may suspend or
17revoke any license issued under this section if the division finds any of the following:
SB530,14,1918 1. That the licensee has violated any provision of this section, any rule
19promulgated thereunder, or any lawful order of the division made thereunder.
SB530,14,2020 2. That the licensee has violated any of the provisions of chs. 421 to 427.
SB530,14,2321 3. That any fact or condition exists which, if it had existed at the time of the
22original application for such license, would have warranted the division in refusing
23to issue such license.
SB530,14,2524 4. That the licensee made a material misstatement in an application for a
25license or in information furnished to the division.
SB530,15,2
15. That the licensee has failed to pay the annual license fee or to maintain in
2effect the bond required under sub. (4) (c).
SB530,15,143 (b) The division shall restrict or suspend a license issued under this section if
4the division finds that the licensee is an individual who fails to comply, after
5appropriate notice, with a subpoena or warrant issued by the department of
6workforce development or a county child support agency under s. 59.53 (5) and
7related to paternity or child support proceedings or who is delinquent in making
8court-ordered payments of child or family support, maintenance, birth expenses,
9medical expenses, or other expenses related to the support of a child or former
10spouse, as provided in a memorandum of understanding entered into under s.
1149.857. A licensee whose license is restricted or suspended under this paragraph is
12entitled to a notice and hearing only as provided in a memorandum of understanding
13entered into under s. 49.857 and is not entitled to any other notice or hearing under
14this section.
SB530,15,2015 (c) The division shall revoke a license issued under this section if the
16department of revenue certifies under s. 73.0301 that the licensee is liable for
17delinquent taxes. A licensee whose license is revoked under this paragraph for
18delinquent taxes is entitled to a notice under s. 73.0301 (2) (b) 1. b. and a hearing
19under s. 73.0301 (5) (a) but is not entitled to any other notice or hearing under this
20section.
SB530,16,221 (d) Except as provided in pars. (b) and (c), no license shall be revoked or
22suspended except after a hearing under this section. A complaint stating the
23grounds for suspension or revocation together with a notice of hearing shall be
24delivered to the licensee at least 5 days in advance of the hearing. In the event the
25licensee cannot be found, complaint and notice of hearing may be left at the place of

1business stated in the license,which shall be considered the equivalent of delivering
2the notice of hearing and complaint to the licensee.
SB530,16,5 3(10) Interest and fees. (a) Interest. 1. This section imposes no limit on the
4interest that a licensee may charge before the maturity date of a consumer small
5loan.
SB530,16,166 2. If a consumer small loan is not paid in full on or before the maturity date,
7a licensee may charge, after the maturity date, interest at a rate not exceeding 2.75
8percent per month, except that if a licensee makes a subsequent consumer small loan
9to the borrower under sub. (12) (a), and the borrower does not pay the subsequent
10loan in full on or before the maturity date of the subsequent loan, the licensee may
11charge, after the maturity date of the subsequent loan, interest at a rate not
12exceeding 2.75 percent per month on the subsequent loan and the licensee may not
13charge any interest under this subdivision on the prior loan. Interest earned under
14this subdivision shall be calculated at the rate of one-thirtieth of the monthly rate
15charged for each calendar day that the balance of the loan is outstanding. Interest
16cannot be assessed on any interest earned under this subdivision.
SB530,16,1817 (b) Fees. 1. A licensee may not assess a borrower any fee or charge for database
18access or usage.
SB530,16,2219 2. A licensee may charge a fee not to exceed $15 for each check presented for
20payment to the licensee which is returned unsatisfied because the drawer does not
21have an account with the drawee, does not have sufficient funds in his or her account,
22or does not have sufficient credit with the drawee.
SB530,16,24 23(11) Prepayment. (a) A customer may pay a consumer small loan in whole or
24in part prior to the maturity date of the loan.
SB530,17,5
1(b) Upon prepayment in full, a refund of the unearned portion of any interest
2assessed by the licensee must be allowed. The amount of such refund shall not be
3less than the difference between the interest charged and the interest earned at the
4agreed rate computed upon the unpaid principal balance of the loan from time to time
5outstanding prior to repayment in full.
SB530,17,14 6(12) Prohibitions. (a) A borrower may repay a consumer small loan with the
7proceeds of a subsequent consumer small loan made by the same or another licensee
8or an affiliate of the same or another licensee, but if the borrower does so, the
9borrower may not repay the subsequent consumer small loan with the proceeds of
10another consumer small loan made by the same or another licensee or an affiliate of
11the same or another licensee. A repayment of a subsequent consumer small loan and
12the origination of a new consumer small loan from the same or another licensee or
13an affiliate of the same or another licensee within a 24-hour period shall be
14considered proof of violation of the prohibition under this paragraph.
SB530,17,1715 (b) No licensee may make a consumer small loan to a borrower that results in
16the borrower having an outstanding aggregate liability of more than $900 to all
17licensees who have made consumer small loans to the borrower.
SB530,17,2218 (c) No licensee may make a consumer small loan to a borrower if the licensee
19determines, knows, or should have known, that the social security number the
20borrower provided to the licensee is invalid, was issued within a period of time
21specified by the division preceding the date of the inquiry, or is issued to a deceased
22individual.
SB530,17,2423 (d) No licensee may take a note, promise to pay, or any other instrument, in
24which blanks are left to be filled in after the consumer small loan has been made.
SB530,18,6
1(e) No licensee may advertise, print, display, publish, distribute, or broadcast,
2or cause to be printed, displayed, published, distributed, or broadcast, in any
3manner, any statement with regard to the rates, terms, or conditions of a consumer
4small loan that is false or calculated to deceive. With respect to matters specifically
5governed by s. 423.301, compliance with such section satisfies the requirements of
6this paragraph.
SB530,18,127 (f) If a check held by a licensee as a result of a consumer small loan is returned
8to the licensee from a payor financial institution due to insufficient funds, a closed
9account, or a stop payment order, the licensee may bring an action to collect the
10amount of the check, but may not threaten or pursue criminal action against a debtor
11as a result of the debtor's check being returned unpaid or the debtor's consumer small
12loan not being paid.
SB530,18,15 13(13) Other provisions. (a) All consumer small loans shall be governed by chs.
14421 to 427, but to the extent that chs. 421 to 427 are inconsistent with this section,
15this section shall govern.
SB530,18,2216 (b) A licensee shall deliver to the borrower, at the time a consumer small loan
17is made, a statement in the English and Spanish languages including all the
18disclosures required by the federal Consumer Credit Protection Act. The statement
19shall disclose that the borrower may prepay the borrower's loan in whole or in part
20and that if the loan is prepaid in full the borrower will receive a refund of interest
21as provided by this section. The statement shall also clearly and conspicuously
22indicate the percentage per year of interest charged for the consumer small loan.
SB530,18,2523 (c) A licensee shall give to the borrower a plain and complete receipt for all cash
24payments made on account of any consumer small loan at the time such payments
25are made.
SB530,19,9
1(d) No consumer small loan, wherever made, for which a greater rate or amount
2of interest than is allowed under sub. (10) (a) 2. has been contracted for or received,
3may be enforced in this state, and every person in any way participating therein in
4this state shall be subject to this section. If a licensee makes an excessive charge of
5such interest as the result of an unintentional mistake, but upon demand makes
6correction of such mistake, the loan shall be enforceable and treated as if no violation
7occurred at the agreed rate. Nothing in this paragraph shall limit any greater rights
8or remedies afforded in chs. 421 to 427 to a customer in a consumer credit
9transaction.
SB530,19,13 10(14) Database. (a) The division or a database provider shall develop,
11implement, and maintain a single statewide database that has real-time access
12through an Internet connection, is accessible at all times to licensees and the
13division, and otherwise meets the requirements of this section.
SB530,19,1714 (b) The division may operate the database or may contract with a single
153rd-party provider to operate the database. If the division contracts with a
163rd-party provider for the operation of the database, the division shall do all the
17following:
SB530,19,1918 1. Ensure that the 3rd-party provider operates the database according to the
19provisions of this section.
SB530,19,2120 2. In selecting a 3rd-party provider, consider the cost of providing the service
21and the 3rd-party provider's ability to meet all the requirements of this section.
SB530,19,2322 3. In selecting a 3rd-party provider, give strong consideration to all of the
23following:
SB530,20,3
1a. The 3rd-party provider's ability to prevent fraud, abuse, and other unlawful
2activity associated with consumer small loan transactions, and to provide additional
3tools for the administration and enforcement of this section.
SB530,20,54 b. Whether the provider is currently providing a similar service for another
5state.
SB530,20,66 (c) The database shall do all of the following:
SB530,20,117 1. Allow a licensee accessing the database to check a customer's social security
8number, or other unique identification number specified by the division, and report
9to the division or licensee if that social security number is invalid, was issued within
10a period of time specified by the division preceding the date of the inquiry, or is issued
11to a deceased individual.
SB530,20,1312 2. Allow a licensee accessing the database to determine if making a new
13consumer small loan would cause a violation of this section.
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