2. Requires the division to develop written materials about payday loans and
the payday loan industry. A payday loan provider must provider the materials to an
applicant when making the disclosures described above.
3. Requires payday loan providers to make annual reports about their business
to the division.
4. Prohibits a payday loan provider or database contractor from selling or, with
certain exceptions, providing to any person information about customers and payday
loans made to customers.
5. Allows a customer to bring an action against a payday loan provider who
makes a payday loan that violates the bill. In such an action, the customer may
obtain an amount equal to twice the interest, fees, and charges charged for the loan,
or the actual damages, whichever is greater, as well as costs and attorney fees.
6. Provides that whoever violates the bill is subject to a criminal fine of not less
than $500 nor more than $1,000, imprisonment for not more than 6 months, or both.
7. Requires any licensed lender, upon making a loan for a term of more than
90 days, to report the loan to a credit reporting agency, which is referred to as a
consumer reporting agency under federal law.
8. Prohibits a licensed lender from requiring a schedule of payments by a
borrower under which: 1) any one payment is not equal or substantially equal to all
other payments; or 2) the intervals between any consecutive payments differ
substantially.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB447-engrossed,4,102
20.144
(1) (g)
General program operations. The amounts in the schedule for
3the general program operations of the department of financial institutions. Except
4as provided in pars. (a), (h), (i),
(j), and (u), all moneys received by the department,
5other than by the office of credit unions and the division of banking, and 88% of all
6moneys received by the department's division of banking shall be credited to this
7appropriation, but any balance at the close of a fiscal year under this appropriation
8shall lapse to the general fund. Annually, $200,000 of the amounts received under
9this appropriation account shall be transferred to the appropriation account under
10s. 20.575 (1) (g).
AB447-engrossed,5,4
120.144
(1) (j)
Payday loan database and financial literacy. All moneys received
2under s. 138.14 (8) (e), for developing and administering, or contracting for the
3development and administration of, the database under s. 138.14 (8) and for
4promoting financial literacy.
AB447-engrossed,5,76
138.09
(8) (f) When making a payday loan, as defined in s. 138.14 (1) (g), comply
7with s. 138.14 and rules promulgated under s. 138.14.
AB447-engrossed,5,109
138.09
(8) (g) Upon making a loan for a term of more than 90 days, report the
10loan to a consumer reporting agency, as defined in
15 USC 1681a (f).
AB447-engrossed,5,1512
138.09
(8) (h) Make no loan which requires a schedule of payments by a
13borrower under which any one payment is not equal or substantially equal to all
14other payments, or under which the intervals between any consecutive payments
15differ substantially.
AB447-engrossed,5,17
17138.14 Payday loan providers. (1) Definitions. In this section:
AB447-engrossed,5,1818
(a) "Applicant" means an individual who seeks to obtain a payday loan.
AB447-engrossed,5,1919
(b) "Check" has the meaning given in s. 403.104 (6).
AB447-engrossed,5,2120
(c) "Customer" means an individual who enters into a payday loan with a
21payday loan provider.
AB447-engrossed,5,2322
(d) "Division" means the division of banking in the department of financial
23institutions.
AB447-engrossed,6,3
1(e) "Financial establishment" means any organization that is authorized to do
2business under state or federal law and that holds a demand deposit, savings deposit,
3or other asset account belonging to an individual.
AB447-engrossed,6,44
(f) "Organization" has the meaning given in s. 19.42 (11).
AB447-engrossed,6,55
(g) "Payday loan" means any of the following:
AB447-engrossed,6,126
1. A transaction between an individual with an account at a financial
7establishment and another person, including a person who is not physically located
8in this state, in which the person agrees to accept from the individual one or more
9checks, to hold the check or checks for a period of time before negotiating or
10presenting the check or checks for payment, and to loan to the individual, for a term
11of 90 days or less, before negotiating or presenting the check or checks for payment,
12an amount that is agreed to by the individual.
AB447-engrossed,6,1913
2. A transaction between an individual with an account at a financial
14establishment and another person, including a person who is not physically located
15in this state, in which the person agrees to accept the individual's authorization to
16initiate one or more electronic fund transfers from the account, to wait a period of
17time before initiating the electronic fund transfer or transfers, and to loan to the
18individual, for a term of 90 days or less, before initiating the electronic fund transfer
19or transfers, an amount that is agreed to by the individual.
AB447-engrossed,6,2120
(h) "Payday loan provider" means a person who is required to be licensed under
21s. 138.09 and who makes payday loans.
AB447-engrossed,7,222
(i) "Rollover" or "rolled over" means the refinancing, renewal, amendment, or
23extension of a payday loan beyond its original date of maturity. "Rollover" or "rolled
24over" includes the consolidation of payday loans and any transaction in which a
1payday loan is repaid with the proceeds of another payday loan made by the same
2payday loan provider.
AB447-engrossed,7,5
3(2) Disclosure requirements. (a) Before any payday loan provider enters into
4a payday loan with an applicant, the payday loan provider shall do all of the
5following:
AB447-engrossed,7,86
1. Disclose to the applicant the total amount of all fees and costs, in dollars, to
7be paid by the applicant for the loan assuming that the loan is paid in full at the end
8of the loan term.
AB447-engrossed,7,109
2. Disclose to the applicant the annual percentage rate to be paid by the
10applicant on the loan assuming that the loan is paid in full at the end of the loan term.
AB447-engrossed,7,1211
3. Provide to the applicant a copy of the written informational materials
12specified in sub. (4).
AB447-engrossed,7,1413
4. Disclose to the applicant that he or she has the right to rescind the loan
14transaction as provided in sub. (6).
AB447-engrossed,7,1615
5. Disclose to the applicant the service charge that may apply under sub. (3)
16(g).
AB447-engrossed,7,1817
6. Disclose to the applicant the payment requirements that may apply under
18sub. (7) (a) if the loan is not paid in full at the end of the loan term.
AB447-engrossed,7,2019
(b) A payday loan provider shall retain, for at least 3 years after the origination
20date of any payday loan, a record of compliance with par. (a) with respect to the loan.
AB447-engrossed,7,23
21(3) Loan restrictions. (a) No payday loan provider may make a payday loan
22that exceeds, in principal amount, interest, and all other fees and charges, $600 or
2335 percent of the applicant's gross biweekly income, whichever is less.
AB447-engrossed,8,524
(b) No payday loan provider may make a payday loan to individual who is liable
25for repayment of any amount on a payday loan made by another payday loan
1provider. No payday loan provider may make a payday loan to an individual if less
2than 24 hours have elapsed since the individual repaid another payday loan in full
3or, if repayment is subject to sub. (7) (a), if less than a time period equal to the
4applicant's pay period has elapsed since the individual repaid the loan in full under
5sub. (7) (a).
AB447-engrossed,8,76
(c) No payday loan provider may require the payment of any interest on a
7payday loan that accrues after the original maturity date of the payday loan.
AB447-engrossed,8,108
(d) Except as provided in par. (g), no payday loan provider may impose any
9penalty on a customer arising from the customer's prepayment of or default or late
10payment on a payday loan, including any payment under sub. (7) (a).
AB447-engrossed,8,1311
(e) No payday loan provider may accept from a customer a check or
12authorization to initiate an electronic fund transfer if the amount of the check or
13authorization exceeds the amount specified in par. (a).
AB447-engrossed,8,1414
(f) A payday loan provider may not rollover a payday loan.
AB447-engrossed,8,2115
(g) A payday loan provider may present a customer's check for payment no
16more than once. For each customer authorization to initiate an electronic fund
17transfer from the customer's account, a payday loan provider may initiate an
18electronic fund transfer no more than once. The only charge that a payday loan
19provider may impose for dishonor of a customer's check or denial of the payday loan
20provider's instruction to execute an electronic fund transfer is a service charge that
21does not exceed $15.
AB447-engrossed,9,2
22(4) Informational materials. (a) The division shall develop written
23informational materials on payday loans and the payday loan industry. These
24informational materials shall be designed to educate individuals regarding the
1operation and potential costs of payday loans and of other options for borrowing
2funds that may be available.
AB447-engrossed,9,63
(b) The informational materials under par. (a) shall include a clear and
4conspicuous notice that a payday loan is not intended to meet long-term financial
5needs and that a payday loan applicant should use a payday loan only to provide
6funds in a financial emergency.
AB447-engrossed,9,97
(c) The informational materials under par. (a) shall include all of the following
8information, based upon aggregated information from reports submitted under sub.
9(5) for the most recent reporting period:
AB447-engrossed,9,1010
1. The average annual percentage rate for payday loans.
AB447-engrossed,9,1211
2. The percentage of customers originating payday loans who defaulted on the
12loan.
AB447-engrossed,9,1413
3. The percentage of customers originating payday loans whose payment
14method was dishonored or denied for insufficient funds.
AB447-engrossed,9,1615
4. The percentage of customers originating payday loans that resulted in
16repayment under sub. (7) (a).
AB447-engrossed,9,2017
(d) The informational materials under par. (a) shall include a summary of all
18actions that the payday loan provider may take against a payday loan customer if
19the customer defaults on the payday loan or if the customer's check or electronic fund
20transfer is dishonored or denied for insufficient funds.
AB447-engrossed,9,2221
(e) The division shall annually update the informational materials under par.
22(a), based upon the division's analysis of reports received under sub. (5).
AB447-engrossed,9,2523
(f) The division shall make copies of the informational materials under par. (a)
24available, upon request, to payday loan providers and to the public, including
25making these informational materials available on the Internet site of the
1department of financial institutions. The division may charge payday loan providers
2a reasonable fee for printed copies of informational materials supplied under this
3paragraph.
AB447-engrossed,10,16
4(5) Reporting and record keeping. (a) On or before March 15 of each year,
5every payday loan provider shall make an annual report to the division. The report
6shall cover business relating to payday loans made by the payday loan provider
7during the preceding calendar year and shall include any relevant information
8required by the division. The report shall be made upon forms prescribed by the
9division and shall be signed and verified by the oath or affirmation of the payday loan
10provider if an individual, one of the partners if a partnership, a member or manager
11if a limited liability company, or an officer of the corporation or association if a
12corporation or association. A payday loan provider may include the information
13required to be reported under this subsection in the payday loan provider's report
14under s. 138.09 (3) (f), if the information required under this subsection is stated
15separately in the report from information relating to the payday loan provider's other
16business.
AB447-engrossed,10,1817
(b) The division shall require that the report under par. (a) include, for the
18applicable reporting period, all of the following aggregated information:
AB447-engrossed,10,1919
1. The number of payday loans originated by the payday loan provider.
AB447-engrossed,10,2120
2. The average of the total amount of all fees and costs, in dollars, and the
21average loan term, for all payday loans of the payday loan provider.
AB447-engrossed,10,2322
3. Based upon the information specified in subd. 2., the average annual
23percentage rate for all payday loans of the payday loan provider.
AB447-engrossed,10,2524
4. The number of payday loans originated by the payday loan provider that
25resulted in repayment under sub. (7) (a).
AB447-engrossed,11,2
15. The number of payday loans originated by the payday loan provider that
2resulted in default on the loan by the customer.
AB447-engrossed,11,83
6. The number of payday loans originated by the payday loan provider on which
4the customer's payment method was dishonored or denied because the customer's
5check was drawn on, or the customer's authorization to initiate an electronic fund
6transfer was from, an account at a financial establishment containing insufficient
7funds when the check was presented for payment or the electronic fund transfer was
8initiated.
AB447-engrossed,11,14
9(6) Rescission. A customer may rescind a payday loan, before the close of
10business on the next day of business after the loan is made, or, if the place of business
11where the loan is made is open 24 hours, before 5 p.m. on the next day of business
12after the loan is made, by returning to the payday loan provider the proceeds of the
13payday loan. The payday loan provider may not charge the customer any fee for
14rescinding the payday loan as provided in this subsection.
AB447-engrossed,11,19
15(7) Repayment after term of loan. (a) Except as provided in par. (b), if a
16customer fails to repay a payday loan in full at the end of the loan term, the payday
17loan provider shall offer the customer the opportunity to repay the outstanding
18balance of the loan in four equal installments with due dates coinciding with the
19customer's pay period schedule.
AB447-engrossed,11,2420
(b) If a payday loan provider offers a customer the opportunity to make
21repayment under par. (a), then, during the 12-month period following the offer, no
22payday loan provider, including the payday loan provider making the offer, is
23required to offer the customer another opportunity to repay a payday loan under par.
24(a).
AB447-engrossed,12,10
1(8) Database. (a) The division shall develop and administer, or contract for the
2development and administration of, a database that provides payday loan providers
3with real-time access, through an Internet connection, to all payday loan
4information necessary for payday loan providers to comply with this section. The
5database shall assign a unique identification number for each customer that shall
6be used each time the customer enters into a payday loan transaction. A customer
7identification number may not be based on a customer's social security number. The
8database shall also assign a unique identifying transaction number for each payday
9loan transaction that is entered into the database by a payday loan provider under
10par. (b).
AB447-engrossed,12,1411
(b) At the time a payday loan provider enters into a payday loan transaction
12with a customer, the payday loan provider shall submit to the database under par.
13(a), in the form and manner prescribed by the division, information relating to the
14payday loan, including all of the following:
AB447-engrossed,12,1515
1. The customer's name and address.
AB447-engrossed,12,1616
2. The customer's identification number that is assigned by the database.
AB447-engrossed,12,1817
3. The principal amount, interest, and all other fees and charges for the payday
18loan.
AB447-engrossed,12,1919
4. The date on which the payday loan agreement is signed.
AB447-engrossed,12,2020
5. The date of maturity of the payday loan.
AB447-engrossed,12,2121
6. The customer's pay period.
AB447-engrossed,12,2422
7. Any other information required by the division by rule, except that the
23division may not require the submission of, and a payday loan provider may not
24submit, a customer's financial establishment account or routing numbers.
AB447-engrossed,13,3
1(c) At any time a payday loan provider offers a customer the opportunity to
2agree to repay a payday loan under sub. (7) (a), the payday loan provider shall submit
3the date of the offer to the database under par. (a).
AB447-engrossed,13,74
(d) At the time the outstanding balance of a payday loan is repaid in full, the
5payday loan provider shall submit to the database under par. (a), in the form and
6manner prescribed by the division, information specifying that the payday loan has
7terminated, including the date and time that the payday loan terminated.
AB447-engrossed,13,108
(e) The division shall impose on a payday loan provider a fee in an amount
9specified by rule each time the payday loan provider submits data required under
10pars. (b), (c), and (d).
AB447-engrossed,13,1311
(f) A payday loan provider may rely on the information contained in the
12database under par. (a) as accurate and is not subject to any penalty or liability due
13to its reliance on inaccurate information contained in the database.
AB447-engrossed,13,1714
(g) Information maintained in the database under par. (a) is not subject to
15inspection or copying under s. 19.35 (1) and shall remain confidential except as
16needed by payday loan providers to satisfy the requirements of this section and by
17the division to enforce this section.
AB447-engrossed,13,2118
(h) If the division contracts with a person for the development or
19administration of the database under par. (a), the division shall ensure that the
20contract requires the person to maintain the confidentiality of information contained
21in the database.
AB447-engrossed,13,2422
(i) The division shall establish procedures monitoring use of the database by
23payday loan providers, including procedures for determining compliance with par.
24(b) 2.
AB447-engrossed,14,6
1(9) Customer information. No payday loan provider or person with whom the
2division contracts for development or administration of the database under sub. (8)
3(a) may sell or provide to another person any information regarding a customer or
4a payday loan made to a customer, except that the prohibition on providing
5information does not apply to information that is provided to satisfy the
6requirements of this section or to enforce this section.
AB447-engrossed,14,13
7(10) Private cause of action. If a payday loan provider makes a payday loan
8to a customer that violates this section, the customer may bring an action against the
9payday loan provider for an amount equal to twice the interest and all other fees and
10charges charged for the loan, or the actual damages, including any incidental and
11consequential damages, sustained by the customer by reason of the violation,
12whichever is greater, and, notwithstanding s. 814.04 (1), the costs of the action,
13including reasonable attorney fees.
AB447-engrossed,14,15
14(11) Penalty. Whoever violates this section may be fined not less than $500 nor
15more than $1,000, imprisoned for not more than 6 months, or both.
AB447-engrossed,14,18
16(12) Rules. The division shall promulgate rules necessary to implement,
17administer, and enforce this section, including prescribing the form and content of
18any report required under sub. (5) and the method of filing such a report.
