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2023 - 2024 LEGISLATURE
SENATE SUBSTITUTE AMENDMENT 1,
TO SENATE BILL 832
January 18, 2024 - Offered by Senator Cabral-Guevara.
SB832-SSA1,1,5 1An Act to repeal 138.14 (1) (g); to renumber 138.14 (9m); to amend 138.14 (9g)
2(a) 3., 138.14 (10) (b) 2., 138.14 (11) (b), 138.14 (12) (b), 138.14 (12) (f) and 138.14
3(14) (m); to repeal and recreate 138.14 (1) (k); and to create 138.14 (1) (km),
4138.14 (9g) (a) 7., 138.14 (9m) (a), 138.14 (9r) (g), 138.14 (10) (c) and 138.14 (12)
5(g) and (h) of the statutes; relating to: payday loans.
Analysis by the Legislative Reference Bureau
This bill redefines a payday loan and makes other changes related to the
regulation of payday loans.
Under current law, a person other than a financial institution or its affiliate
must be licensed by the Division of Banking (division) in the Department of Financial
Institutions to originate or service a payday loan involving a Wisconsin resident. A
“payday loan" is defined as a transaction between an individual with an account at
a financial establishment and another person (payday lender) in which the payday
lender agrees to accept a check or electronic fund transfer (EFT) authorization from
the individual, to delay negotiating the check or initiating the EFT for a period of
time, and to extend a loan to the individual for a term of 90 days or less. Current law
imposes various requirements and restrictions on payday loans and licensed payday
lenders. For example, a payday lender may not make a payday loan that results in

the customer having an outstanding liability in principal, interest, and fees on all
payday loans held at the same time by the customer of more than $1,500 or 35 percent
of the customer's gross monthly income, whichever is less. A payday lender must also
provide to an applicant certain information before entering into a payday loan,
including disclosing fees and costs and the loan's annual percentage rate and
providing written materials prepared by the division.
This bill eliminates the foregoing definition of a payday loan and instead
defines a payday loan as a loan to which all of the following apply: 1) the loan's
maturity date is not more than six months after the loan's origination date; and 2)
the loan is not secured by real property or other collateral. The bill prohibits a payday
lender from making or offering to make a payday loan having a maturity date less
than 90 days after the loan's origination date.
The bill also imposes the following additional restrictions and requirements on
payday loans:
1. A payday lender may not make or offer to make a payday loan unless the loan
agreement requires the loan to be repaid in substantially equal periodic payments
over substantially equal intervals.
2. All payday loans must be precomputed, which is defined as a transaction in
which the debt is expressed as a single sum comprised of the amount financed and
the finance charge computed in advance.
3. Before entering into a payday loan, a payday lender must undertake a
reasonable underwriting process to verify the applicant's ability to repay the payday
loan. The payday lender may not make a payday loan in an amount that exceeds the
amount the applicant is capable of repaying, as determined by the payday lender's
underwriting process, or the maximum amount established under current law (as
described above), whichever is less.
4. Before entering into a payday loan, a payday lender must disclose to the
applicant, in a clear and conspicuous manner, the payment plan and the amount of
interest that will be paid over the course of the loan. The payday lender must also
disclose to the applicant the availability of a financial literacy course of no more than
three hours' duration that the bill requires the division to develop or make available
to the public.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB832-SSA1,1 1Section 1. 138.14 (1) (g) of the statutes is repealed.
SB832-SSA1,2 2Section 2. 138.14 (1) (k) of the statutes is repealed and recreated to read:
SB832-SSA1,2,33 138.14 (1) (k) “Payday loan" means a loan to which all of the following apply:
SB832-SSA1,2,54 1. The loan's maturity date is not more than 6 months after the loan's
5origination date.
SB832-SSA1,3,1
12. The loan is not secured by real property or other collateral.
SB832-SSA1,3 2Section 3. 138.14 (1) (km) of the statutes is created to read:
SB832-SSA1,3,53 138.14 (1) (km) “Precomputed” means a transaction in which the debt is
4expressed as a single sum comprised of the amount financed and the finance charge
5computed in advance.
SB832-SSA1,4 6Section 4. 138.14 (9g) (a) 3. of the statutes is amended to read:
SB832-SSA1,3,97 138.14 (9g) (a) 3. Provide to the applicant a copy of the written informational
8materials specified in sub. (9r) (a) to (f) and disclose to the applicant the availability
9of the financial literacy course under sub. (9r) (g)
.
SB832-SSA1,5 10Section 5. 138.14 (9g) (a) 7. of the statutes is created to read:
SB832-SSA1,3,1311 138.14 (9g) (a) 7. Disclose to the applicant, in a clear and conspicuous manner,
12the payment plan and the amount of interest that will be paid over the course of the
13loan.
SB832-SSA1,6 14Section 6. 138.14 (9m) of the statutes is renumbered 138.14 (9m) (b).
SB832-SSA1,7 15Section 7. 138.14 (9m) (a) of the statutes is created to read:
SB832-SSA1,3,2116 138.14 (9m) (a) Before entering into a payday loan with an applicant, the
17licensee shall undertake a reasonable underwriting process to verify the applicant's
18ability to repay the payday loan. The licensee may not make a payday loan in an
19amount that exceeds the amount the applicant is capable of repaying, including
20principal and interest, as determined by the licensee's underwriting process, or the
21amount established as provided in sub. (12) (b), whichever is less.
SB832-SSA1,8 22Section 8. 138.14 (9r) (g) of the statutes is created to read:
SB832-SSA1,3,2523 138.14 (9r) (g) The division shall develop or make available to the public a
24financial literacy course that includes material related to payday loans. The course's
25duration shall be no more than 3 hours.
SB832-SSA1,9
1Section 9. 138.14 (10) (b) 2. of the statutes is amended to read:
SB832-SSA1,4,82 138.14 (10) (b) 2. A licensee may present a customer's check for a periodic
3payment no more than once. For each customer authorization to initiate an
4electronic fund transfer from the customer's account, a licensee may initiate an
5electronic fund transfer for a periodic payment no more than once. The only charge
6that a licensee may impose for dishonor of a customer's check or denial of the
7licensee's instruction to execute an electronic fund transfer is a service charge that
8does not exceed $15.
SB832-SSA1,10 9Section 10. 138.14 (10) (c) of the statutes is created to read:
SB832-SSA1,4,1010 138.14 (10) (c) Precomputed. All payday loans shall be precomputed.
SB832-SSA1,11 11Section 11. 138.14 (11) (b) of the statutes is amended to read:
SB832-SSA1,4,1912 138.14 (11) (b) Upon prepayment in full by cash, renewal, refinancing, or
13otherwise
, a refund of the unearned portion of any interest assessed by the licensee
14finance charge must be allowed. The amount of such refund shall not be less than
15the difference between the interest charged and the interest earned at the agreed
16rate computed upon the unpaid principal balance of the loan from time to time
17outstanding prior to repayment in full
the earned finance charge shall be based on
18the ratio of the number of days the loan was outstanding to the number of days for
19which the loan was originally contracted
.
SB832-SSA1,12 20Section 12. 138.14 (12) (b) of the statutes is amended to read:
SB832-SSA1,5,221 138.14 (12) (b) No licensee may make a payday loan to a customer that results
22in the customer having an outstanding aggregate liability in principal, interest, and
23all other fees and charges, to all licensees who have made payday loans to the
24customer of more than $1,500 or 35 percent of the customer's gross monthly income,

1whichever is less. As provided in sub. (9m) (b), a licensee may rely on a consumer
2report to verify a customer's income for purposes of this paragraph.
SB832-SSA1,13 3Section 13. 138.14 (12) (f) of the statutes is amended to read:
SB832-SSA1,5,104 138.14 (12) (f) If a check held received by a licensee as a result of payment on
5a payday loan is dishonored, or an instruction to execute an electronic funds transfer
6authorized as the result of payment on a payday loan is denied, the licensee may
7bring an action to collect the amount of the check or electronic funds transfer, but
8may not threaten or pursue criminal action against a debtor as a result of the debtor's
9dishonored check or denied electronic funds transfer or the debtor's payday loan not
10being paid.
SB832-SSA1,14 11Section 14. 138.14 (12) (g) and (h) of the statutes are created to read:
SB832-SSA1,5,1312 138.14 (12) (g) No licensee may make or offer to make a payday loan for which
13the maturity date is less than 90 days after the loan's origination date.
SB832-SSA1,5,1614 (h) No licensee may make or offer to make a payday loan unless the loan
15agreement requires the loan to be repaid in substantially equal periodic payments
16over substantially equal intervals.
SB832-SSA1,15 17Section 15. 138.14 (14) (m) of the statutes is amended to read:
SB832-SSA1,5,2418 138.14 (14) (m) Before entering into a payday loan, a licensee shall submit to
19the database provider the customer's name; unique identification number that is
20assigned in a manner specified by the division; address; driver license number or
21other method of state identification; the amount of the transaction; the customer's
22check number, if applicable;
the date of the transaction; the maturity date of the loan;
23and any other information reasonably required by the division, in a format approved
24by the division.
SB832-SSA1,16 25Section 16 . Nonstatutory provisions.
SB832-SSA1,6,2
1(1) This act first applies to loans made, refinanced, or consolidated on the
2effective date of this subsection.
SB832-SSA1,17 3Section 17. Effective date.
SB832-SSA1,6,54 (1) This act takes effect on the first day of the 7th month beginning after
5publication.
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