422.102 Annotation
Creditor's responsibilities and duties under the Wisconsin consumer act. Holbrook, Bugge, 1973 WBB No. 1.
422.102 Annotation
Real estate implications of the Wisconsin consumer act. Horton, 1973 WBB No. 1.
422.102 Annotation
The effect of the Wisconsin consumer act on farm credit. Miller, 1973 WBB No. 2.
MAXIMUM CHARGES
422.201
422.201
Finance charge for consumer credit transactions. 422.201(1)(1) With respect to a consumer credit transaction other than one pursuant to an open-end credit plan, the parties may agree to the payment by the customer of a finance charge not in excess of that permitted by
subs. (2) to
(4) [(2) to (3)].
422.201 Note
NOTE: The bracketed language indicates the correct cross-reference. Sub. (4) was repealed by
1995 Wis. Act 329. Corrective legislation is pending.
422.201(2)(a)(a) The finance charge, calculated according to the actuarial method, may not exceed the equivalent of the total of the following for a consumer credit transaction entered into on or after April 6, 1980 and prior to November 1, 1981, other than by a federally chartered or state-chartered savings and loan association:
422.201(2)(a)1.
1. Eighteen percent per year on that part of the unpaid balance of the amount financed which is $1,000 or less; and
422.201(2)(a)2.
2. Fifteen percent per year on that part of the unpaid balance of the amount financed which is more than $1,000.
422.201(2)(b)
(b) The finance charge, calculated according to the actuarial method, may not exceed the equivalent of the total of the following for a consumer credit transaction entered into prior to April 6, 1980:
422.201(2)(b)1.
1. Eighteen per cent per year on that part of the unpaid balance of the amount financed which is $500 or less; and
422.201(2)(b)2.
2. Twelve per cent per year on that part of the unpaid balance of the amount financed which is more than $500.
422.201(2)(bm)1.1. The finance charge, calculated according to the actuarial method, may not exceed the greater of the following for a consumer credit transaction entered into on or after November 1, 1981 and before November 1, 1984:
422.201(2)(bm)1.b.
b. A rate of 6% in excess of the interest rate applicable to 6-month U.S. treasury bills as determined under
subd. 2.
422.201(2)(bm)2.
2. For purposes of
subd. 1. b., the interest rate applicable to 6-month U.S. treasury bills for any month is the average annual discount interest rate determined by the last auction of the bills in the preceding month, increased to the next multiple of 0.5% if the average annual discount interest rate includes a fractional amount.
422.201(2)(bm)3.
3. Information regarding the amount of the maximum finance charge under
subd. 1. for any month shall be available at the office of the administrator.
422.201(2)(bn)
(bn) A consumer credit transaction entered into after October 31, 1984, is not subject to any maximum limit on finance charges.
422.201(3)
(3) For licensees under
s. 138.09 and under
s. 218.01, the finance charge, calculated according to those sections, may not exceed the maximums permitted in
ss. 138.09 and
218.01, respectively.
422.201(5)(a)
(a) The finance charge may be calculated on the assumption that all scheduled payments will be made when due;
422.201(5)(b)
(b) The dollar amount of finance charge shall include the prepaid finance charge excluded from the amount financed; and
422.201(5)(c)
(c) The effect of prepayment is governed by the provisions on rebate upon prepayment under
s. 422.209.
422.201(6)
(6) For the purposes of this section, the term of a consumer credit transaction other than one pursuant to an open-end credit plan commences with the date the credit is granted or, if goods are delivered, services performed or proceeds of a loan paid 10 days or more after that date, with the date of commencement of delivery or performance. Differences in lengths of months are disregarded and a day may be counted as one-thirtieth of a month.
422.201(7)
(7) Subject to classifications and differentiations the merchant may reasonably establish, the merchant may make the same finance charge on all amounts financed within a specified range. A finance charge so made does not violate
sub. (2) or
(3) as the case may be if:
422.201(7)(a)
(a) When applied to the median amount within each range, it does not exceed the maximum permitted by
sub. (2) or
(3) as the case may be; and
422.201(7)(b)
(b) When applied to the lowest amount within each range, it does not produce a rate of finance charge exceeding the rate calculated according to
par. (a) by more than 8% of the rate calculated according to
par. (a).
422.201(8)
(8) That portion of the finance charge consisting of an amount equal to a discount of 5% or less of the stated price which is offered to induce payment in full within a stated period of time in connection with a sale for agricultural purposes or a sale of particular goods and services for which credit is not otherwise available from the merchant shall not be included in the finance charge for the purpose of determining the maximum rate of finance charge under
sub. (2) or
(3) with respect to a customer who does not pay in full within such time.
422.201(9)
(9) Notwithstanding
sub. (2) or
(3), a merchant may contract for and receive a minimum finance charge with respect to a transaction other than one pursuant to an open-end credit plan, of not more than $5 when the amount financed does not exceed $75, or $7.50 when the amount financed exceeds $75.
422.201(10m)
(10m) A finance charge determined by application of a periodic rate shall be determined by applying the periodic rate to one of the following:
422.201(10m)(b)
(b) The unpaid balance of the account on the last day of the billing cycle after first deducting all payments, credits and refunds during the billing cycle.
422.201(10m)(c)
(c) The median amount within a specified range within which the unpaid balance as calculated according to
par. (a) or
(b) is included. A charge may be made under this paragraph only if the creditor, subject to classifications and differentiations the creditor may reasonably establish, makes the same charge on all balances within the specified range and if the percentage when applied to the median amount within the range does not exceed the charge resulting from applying that percentage to the lowest amount within the range by more than 8% of the charge on the median amount.
422.201(10s)
(10s) Regardless of the date that an open-end credit plan is entered into, the parties may agree to the payment by the customer of a finance charge at any periodic rate.
422.201(11)
(11) Anything to the contrary in this chapter notwithstanding, with respect to consumer credit sales and consumer loans secured by real property and insured or guaranteed by the federal government, or any agency or instrumentality thereof, this chapter shall not prohibit or limit any charges which are required by statutes, rules or regulations of such government, agency or instrumentality.
422.201(12)
(12) This section does not apply to a consumer credit transaction primarily for an agricultural purpose if the transaction occurs on or after April 6, 1980.
422.201(12m)
(12m) This section does not apply to consumer credit sales of or consumer loans secured by a first lien on or equivalent security interest in mobile homes as defined in
s. 218.10 (2), if the sales or loans are made on or after November 1, 1981.
422.201 Annotation
Scope of apparent agency may embrace making of usurious loan. Hollingsworth v. American Finance Corp. 86 W (2d) 172, 271 NW (2d) 872 (1978).
422.201 Annotation
Sale of interest-bearing note at discount will not be deemed usurious unless found to be cloak or cover for what is in reality usurious loan. Val Zimmermann Corp. v. Leffingwell, 107 W (2d) 86, 318 NW (2d) 781 (1982).
422.201 Annotation
Accord and satisfaction is not defense to claim of usury under consumer act. Clark v. Aetna Finance Corp. 115 W (2d) 581, 340 NW (2d) 747 (Ct. App. 1983).
422.202
422.202
Additional charges. 422.202(1)(1) In addition to the finance charge permitted by this subchapter, a merchant may bargain for and receive any of the following additional charges in connection with a consumer credit transaction:
422.202(1)(b)
(b) Charges or premiums for insurance against loss of or damage to property in which the creditor takes a security interest or to property leased under a motor vehicle consumer lease or against liability arising out of the ownership or use of property in which the creditor takes a security interest or of property leased under a motor vehicle consumer lease, if all of the following conditions are met:
422.202(1)(b)1.
1. A clear, conspicuous and specific statement in writing is furnished by the creditor to the customer setting forth the cost and term of the insurance if obtained from or through the merchant and stating that the customer may choose the person through which the insurance is to be obtained.
422.202(1)(b)2.
2. The creditor mails or delivers to the customer a notice of the customer's right to cancel the insurance obtained from or through the merchant in accordance with
s. 424.304.
422.202(1)(c)
(c) Charges in real property transactions as provided in
sub. (2).
422.202(1)(d)
(d) With respect to a consumer credit transaction which is other than one pursuant to an open-end credit plan and which is entered into on or after May 17, 1988, a charge not to exceed $15 for each check presented for payment to a creditor which is returned unsatisfied because the drawer does not have an account with the drawee, does not have sufficient funds in his or her account or does not have sufficient credit with the drawee.
422.202(1)(e)
(e) With respect to a motor vehicle consumer lease, any reasonable fee or charge that is conspicuously disclosed in writing to the prospective lessee before execution of the motor vehicle consumer lease, is agreed upon by the lessor and lessee and is not prohibited by
chs. 421 to
427 and
429.
422.202(2)
(2) With respect to a consumer credit transaction which involves a mobile home transaction as defined in
s. 138.056 (1) (c) or the extension of credit secured by an interest in real property, the parties may agree to the payment by the customer of the following charges in addition to the finance charge, if they will be paid to persons not related to the merchant, are reasonable in amount, bona fide and not for the purpose of circumvention or evasion of this subchapter:
422.202(2)(a)
(a) Fees or premiums for title examination, title insurance or similar purpose;
422.202(2)(b)
(b) Fees for preparation of a deed, settlement statement or other documents;
422.202(2m)(a)(a) If the attorney general determines that the charge described under
par. (b) 1. is not interest within the meaning of
12 USC 85, as interpreted by the U.S. supreme court through December 31, 1996, the attorney general shall issue an opinion which so states and shall publish the opinion in the Wisconsin administrative register no later than February 1, 1997.
422.202(2m)(b)
(b) This paragraph does not apply after January 31, 1997, unless the attorney general publishes the opinion under
par. (a) no later than that date. Except as provided in
subds. 1. to
3m., with respect to consumer credit transactions entered into under an open-end credit plan on or after November 1, 1981, the parties may agree to the payment by the customer of the following charges in addition to the finance charge:
422.202(2m)(b)1.
1. A charge not to exceed $10 in any billing cycle in which the creditor does not receive at least the minimum payment due on or before the 5th day after the payment's due date, as agreed by the parties. Any charge imposed under this subdivision may not be included in any outstanding balance for purposes of calculating any finance charge or minimum payment.
422.202(2m)(b)2.
2. A charge not to exceed 50 cents in any billing cycle in which there are at least 28 calendar days and where the balance is less than $33.34. If the charge permitted in this subdivision is imposed, no finance charge may be imposed nor may the charge permitted in
subd. 1. be imposed or collected.
422.202(2m)(b)3.
3. For each cash advance under an open-end credit plan other than by a seller credit card or an overdraft checking loan, a charge not to exceed the greater of $2 or 2% of the amount of the cash advance, up to a maximum of $5 per cash advance. In this subdivision:
422.202(2m)(b)3.a.
a. "Cash advance" means a consumer loan in which the customer receives currency or its equivalent, but does not include credit for the purchase of goods or services.
422.202(2m)(b)3.b.
b. "Overdraft checking loan" means an open-end credit plan in which loans are made only if the customer overdraws a debit account maintained with a supervised financial organization.
422.202(2m)(b)3e.
3e. A charge not to exceed $10 in any billing cycle in which, at any time during the billing cycle, the unpaid balance exceeds the credit limit, as agreed by the parties, of the open-end credit plan.
422.202(2m)(b)3m.
3m. With respect to a consumer credit transaction which is under an open-end credit plan and which is entered into on or after May 17, 1988, a charge not to exceed $15 for each check presented for payment to a creditor which is returned unsatisfied because the drawer does not have an account with the drawee, does not have sufficient funds in his or her account or does not have sufficient credit with the drawee.
422.202(2m)(b)4.
4. Other charges not constituting finance charges, as determined by rule of the administrator.
422.202(2m)(b)5.
5. This paragraph does not prohibit charges which the administrator has determined not to be finance charges prior to November 1, 1981.
422.202(2m)(c)
(c) This paragraph applies beginning on February 1, 1997, unless the attorney general has published the opinion under
par. (a) by that date. With respect to an open-end credit plan, regardless of when the plan was entered into:
422.202(2m)(c)1.
1. A creditor may charge, collect and receive other fees and charges, in addition to the finance charge authorized under
s. 422.201, that are agreed upon by the creditor and the customer. These other fees and charges may include periodic membership fees, cash advance fees, charges for exceeding a designated credit limit, charges for late payments, charges for providing copies of documents and charges for the return of a dishonored check or other payment instrument.
422.202(2s)(a)(a) A creditor may contract for and collect from the borrower, or include in the amount financed, any of the following:
422.202(2s)(a)1.
1. Charges or premiums for consumer credit insurance, as defined in
s. 424.201, consisting of consumer credit life insurance, credit accident and sickness insurance and credit unemployment insurance against loss of income of debtors resulting from either labor disputes or involuntary unemployment if all of the following conditions are met:
422.202(2s)(a)1.a.
a. The insurance coverage is not required by the creditor and that fact is clearly and conspicuously disclosed in writing to the customer.
422.202(2s)(a)1.b.
b. Any customer desiring the insurance coverage gives a specific, separately signed, affirmative written indication of the desire after receiving written disclosure of the cost and term of the insurance.
422.202(2s)(a)2.a.
a. The insurance coverage is not required by the creditor and that fact is clearly and conspicuously disclosed in writing to the customer.
422.202(2s)(a)2.b.
b. Any customer desiring the insurance coverage gives a specific, separately signed, affirmative written indication of the desire after receiving written disclosure of the cost and term of the insurance.
422.202(2s)(a)2.c.
c. The creditor mails or delivers to the customer a notice of the customer's right to cancel the insurance in accordance with
s. 424.401.
422.202(2s)(a)3.
3. Charges or fees for future service contracts or motor club service contracts if all of the following conditions are met:
422.202(2s)(a)3.a.
a. Membership is not required as a condition of the extension of credit.
422.202(2s)(a)3.b.
b. The term of the membership does not exceed one year or the creditor mails or delivers to the customer a notice of the customer's right to cancel the contract or membership in accordance with
s. 424.401.
422.202(2s)(a)4.
4. Charges or fees for mechanical breakdown, extended warranty or maintenance service contracts or insurance if purchase of the contract or insurance is not required as a condition of the extension of credit.
