Under current law, the WCA includes requirements for a creditor or merchant
to satisfy to enforce rights arising from a consumer credit transaction, including
pleading requirements for a complaint filed by a creditor to enforce these rights.
Among the information that must be included in such a complaint, the creditor must:
identify the consumer credit transaction; describe any collateral sought to be
recovered; specify the facts constituting the customer's alleged default; identify the
actual or estimated amount of money that the creditor is entitled to recover and the
figures necessary for computation of this amount; and include an accurate copy of the
writings evidencing the transaction except that, for a claim arising under an
open-end credit plan, the creditor may substitute a statement that the creditor will,
upon request, provide copies of the writings evidencing the customer's obligation.
A judgment may not be entered on a complaint that fails to comply with these
pleading requirements. For a claim arising under an open-end credit plan, on
written request by the customer, the creditor must submit accurate copies to the
customer and the court of writings evidencing any transaction on which the claim is
made and judgment may not be entered for the creditor unless the creditor does so.
This bill modifies the pleading requirements in WCA cases. First, under the
bill, these pleading requirements apply to a merchant, rather than a creditor. As
defined under current law, a merchant expressly includes an assignee of or successor
to a creditor or seller on credit. Second, the bill changes the manner in which a
merchant is required to plead the amount owed by the customer. Under the bill, the
merchant must identify the actual or estimated amount of money alleged to be due
to the merchant on a date certain after the customer's default, and include a
breakdown of all charges, interest, and payments occurring after this date certain.
If the claim arises under an open-end credit plan, the amount alleged to be due on
a date certain must be reflected in a billing statement addressed to the customer.
Third, the bill specifies that, for a claim arising under an open-end credit plan in
which the merchant has not attached to the complaint copies of the writings
evidencing the customer's obligation and the customer has requested these copies,
the merchant's obligation to provide these copies is satisfied if the merchant provides
the customer and court with a copy of the last billing statement addressed to the
customer reflecting the total outstanding balance on the customer's account at the
time this billing statement was issued. The merchant may also satisfy its obligation
by attaching copies of this billing statement to the complaint. Fourth, under the bill,
the merchant's failure to comply with these requirements related to pleading and
providing copies precludes entry of default judgment, rather than judgment, for the
merchant. Fifth, under the bill, a complaint that fails to comply with these pleading
requirements is not a violation that gives rise to a penalty, civil liability, or an award

of attorney fees under the WCA unless the customer establishes by a preponderance
of the evidence that the failure to comply was willful or intentional.
Under current law provisions of the WCA, a creditor's cause of action with
respect to a customer's obligation in a consumer credit transaction does not accrue
unless there is a default by the customer. A default occurs upon the happening of
certain events, including the failure to make payments within specified times. For
an open-end credit plan, default occurs with the failure to pay when due on two
occasions within any 12-month period. If a merchant believes that a customer is in
default, the merchant may give the customer written notice of the alleged default
and, if applicable, of the customer's right to cure the default. With limited exceptions,
for 15 days after a notice of default is given to the customer, the customer may cure
the default by paying the outstanding amount due, without acceleration, plus other
charges owed. The act of curing a default restores the customer's rights as though
no default had occurred. Under one exception to the right to cure, a customer does
not have a right to cure a default if, during the preceding 12 months, the customer
twice cured defaults on the same transaction or open-end credit plan. Unless a
merchant believes a customer is in default and, if the customer has a right to cure
the default, at least 15 days have elapsed since the merchant gave the customer
notice of the default, the merchant may not do any of the following: accelerate the
maturity of a consumer credit transaction; with a limited exception, commence any
action; or demand or take possession of collateral unless it is voluntarily
surrendered.
This bill creates an exception to the general 15-day cure period for defaults on
obligations arising from consumer credit transactions. Under the bill, there is no
right to cure a default with respect to a consumer credit transaction pursuant to an
open-end credit plan involving a credit card issued by a national bank. For these
transactions, a cause of action against the customer continues to accrue only upon
default by the customer, but there is no requirement that the merchant provide the
customer a 15-day opportunity to cure the default before the merchant accelerates
the maturity of the consumer credit transaction, commences an action, or demands
or takes possession of collateral.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB717,1 1Section 1. 425.1025 of the statutes is created to read:
AB717,3,3 2425.1025 Definition. In this subchapter, "billing statement" means a
3statement issued pursuant to 15 USC 1637 (b).
AB717,2 4Section 2. 425.105 (2) of the statutes is amended to read:
AB717,4,7
1425.105 (2) Except as provided in subs. (3) and to (3m), for 15 days after such
2notice is given, a customer may cure a default under a consumer credit transaction
3by tendering the amount of all unpaid installments due at the time of the tender,
4without acceleration, plus any unpaid delinquency or deferral charges, and by
5tendering performance necessary to cure any default other than nonpayment of
6amounts due. The act of curing a default restores to the customer the customer's
7rights under the agreement as though no default had occurred.
AB717,3 8Section 3. 425.105 (3g) of the statutes is created to read:
AB717,4,119 425.105 (3g) A right to cure shall not exist with respect to a consumer credit
10transaction pursuant to an open-end credit plan involving a credit card issued by a
11national bank.
AB717,4 12Section 4. 425.109 (1) (intro.) of the statutes is amended to read:
AB717,4,1413 425.109 (1) (intro.) A complaint by a creditor merchant to enforce any cause of
14action arising from a consumer credit transaction shall include all of the following:
AB717,5 15Section 5. 425.109 (1) (b) of the statutes is amended to read:
AB717,4,1716 425.109 (1) (b) A description of the collateral or leased goods, if any, which the
17creditor merchant seeks to recover or has recovered.
AB717,6 18Section 6. 425.109 (1) (d) of the statutes is renumbered 425.109 (1) (d) 1. and
19amended to read:
AB717,5,620 425.109 (1) (d) 1. The If the consumer credit transaction is pursuant to an
21open-end credit plan, the
actual or estimated amount of U.S. dollars or of a named
22foreign currency that the creditor alleges he or she is entitled to recover and the
23figures necessary for computation of the amount, including any amount received
24from the sale of any collateral
alleged to be due to the merchant on a date certain after
25the customer's default, as reflected on a billing statement addressed to the customer,

1and a breakdown of all charges, interest, and payments, including any amount
2received from the sale of any collateral, occurring after this date certain. This
3paragraph does not require a specific itemization, but the breakdown shall identify
4separately the amount due on a date certain, the total of all charges occurring after
5this date certain, the total of all interest occurring after this date certain, and the
6total of all payments occurring after this date certain
.
AB717,7 7Section 7. 425.109 (1) (d) 2. of the statutes is created to read:
AB717,5,168 425.109 (1) (d) 2. If the consumer credit transaction is other than one pursuant
9to an open-end credit plan, the actual or estimated amount of U.S. dollars or of a
10named foreign currency alleged to be due to the merchant on a date certain after the
11customer's default, and a breakdown of all charges, interest, and payments,
12including any amount received from the sale of any collateral, occurring after this
13date certain. This paragraph does not require a specific itemization, but the
14breakdown shall identify separately the amount due on a date certain, the total of
15all charges occurring after this date certain, the total of all interest occurring after
16this date certain, and the total of all payments occurring after this date certain.
AB717,8 17Section 8. 425.109 (1) (f) of the statutes is amended to read:
AB717,5,2318 425.109 (1) (f) Except in an action to recover goods subject to a consumer lease,
19the estimated amount of U.S. dollars or of a named foreign currency of any deficiency
20claim which may be available to the creditor merchant following the disposition of
21any collateral recovered subject to the limitations of s. 425.209 or which the creditor
22merchant seeks to recover and which the creditor merchant intends to assert subject
23to the limitations of s. 425.210 if the customer fails to redeem the collateral.
AB717,9 24Section 9. 425.109 (1) (h) of the statutes is amended to read:
AB717,6,6
1425.109 (1) (h) An Subject to sub. (2) and s. 425.205 (4), an accurate copy of the
2writings, if any, evidencing the transaction, except that with respect to claims arising
3under open-end credit plans, a statement that the creditor merchant will submit
4accurate copies of the writings evidencing the customer's obligation to the court and
5the customer upon receipt of the customer's written request therefor on or before the
6return date or the date on which the customer's answer is due.
AB717,10 7Section 10. 425.109 (2) of the statutes is amended to read:
AB717,6,188 425.109 (2) Upon the written request of the customer under sub. (1) (h), the
9creditor merchant shall submit accurate copies to the court and the customer of
10writings evidencing any transaction the customer's obligation pursuant to an
11open-end credit plan upon which the creditor's merchant's claim is made and default
12judgment may not be entered for the creditor merchant unless the creditor merchant
13does so. The writings requirement under this subsection is satisfied if the merchant
14provides the customer with a copy of the last billing statement addressed to the
15customer reflecting the total outstanding balance on the customer's account at the
16time this billing statement was issued. If this billing statement is attached to the
17complaint, then the statement under sub. (1) (h) is not required to be included in the
18complaint.
AB717,11 19Section 11. 425.109 (3) of the statutes is amended to read:
AB717,6,2120 425.109 (3) A default judgment may not be entered upon a complaint which
21fails to comply with this section.
AB717,12 22Section 12. 425.109 (4) of the statutes is created to read:
AB717,7,223 425.109 (4) For purposes of subchs. III and IV, a complaint that fails to comply
24with this section does not constitute a violation of chs. 421 to 427, and shall not give

1rise to recovery of attorney fees under s. 425.308, unless the customer establishes by
2a preponderance of the evidence that the failure to comply was willful or intentional.
AB717,13 3Section 13. 425.205 (4) of the statutes is amended to read:
AB717,7,134 425.205 (4) Upon the written request of the customer under s. 425.109 (2), the
5merchant shall produce an accurate copy of writings evidencing any transactions the
6customer's obligation
pursuant to an open-end credit plan upon which the
7merchant's claim is made, and default judgment shall not be entered for the
8merchant until unless the merchant does so. The writings requirement under this
9subsection is satisfied if the merchant provides the customer with a copy of the last
10billing statement addressed to the customer reflecting the total outstanding balance
11on the customer's account at the time this billing statement was issued. If this billing
12statement is attached to the complaint, then the statement under s. 425.109 (1) (h)
13is not required to be included in the complaint.
AB717,14 14Section 14. Initial applicability.
AB717,7,1815 (1) The treatment of sections 425.1025, 425.109 (1) (intro.), (b), (f), and (h), (2),
16(3), and (4) and 425.205 (4) of the statutes, the renumbering and amendment of
17section 425.109 (1) (d) of the statutes, and the creation of section 425.109 (1) (d) 2.
18of the statutes first apply to complaints filed on the effective date of this subsection.
AB717,15 19Section 15. Effective date.
AB717,7,2420 (1) The treatment of sections 425.1025, 425.109 (1) (intro.), (b), (f), and (h), (2),
21(3), and (4) and 425.205 (4) of the statutes, the renumbering and amendment of
22section 425.109 (1) (d) of the statutes, and the creation of section 425.109 (1) (d) 2.
23of the statutes take effect on the first day of the 4th month beginning after
24publication.
AB717,7,2525 (End)
Loading...
Loading...