138.06(1)(1) All instruments, contracts or securities providing a rate of interest exceeding the rate allowed in s. 138.05, 138.051 or 138.052 shall be valid and effectual to secure the repayment of the principal amount loaned in excess of $2,000; but no interest may be recovered thereon except upon bottomry and respondentia bonds and contracts. 138.06(2)(2) Any lender or agent of a lender who violates s. 138.05, 138.051 or 138.052 may be fined not less than $25 nor more than $500, or imprisoned not more than 6 months, or both. 138.06(3)(3) Any borrower who paid interest on a loan or forbearance at a rate greater than the rate allowed in s. 138.05, 138.051 or 138.052 may personally or by personal representative recover in an action against the lender or personal representative the amount of interest, principal and charges paid on such loan or forbearance but not more than $2,000 of principal, if the action is brought within the time provided by s. 893.62. 138.06(4)(4) Any borrower to whom a lender or agent of a lender fails to provide the statement required in s. 138.05 (4) with respect to a loan or forbearance may by himself or herself or his or her personal representative recover in an action against the lender or the lender’s personal representative an amount equal to all interest and charges paid upon such loan or forbearance but not less than $50 plus reasonable attorney fees incurred in such action. 138.06(5)(5) Notwithstanding subs. (1) to (4), if any violation of s. 138.05, 138.051 or 138.052 is the result of an unintentional mistake which the lender or agent of the lender corrects upon demand, such unintentional violation shall not affect the enforceability of any provision of the loan contract as so corrected nor shall such violation subject the lender or the agent of the lender to any penalty or forfeiture specified in this section. 138.06(6)(6) In connection with a sale of goods or services on credit or any forbearance arising therefrom prior to October 9, 1970, there shall be no allowance of penalties under this section for violation of s. 138.05, except as to those transactions on which an action has been reduced to a final judgment as of May 12, 1972. 138.06(7)(7) Notwithstanding sub. (6), a seller shall, with respect to a transaction described in sub. (6), refund or credit the amount of interest, to the extent it exceeds the rate permitted by s. 138.05 (1) (a), which was charged in violation of s. 138.05 and paid by a buyer since October 8, 1968, upon individual written demand therefor made on or before March 1, 1973, and signed by such buyer. A seller who fails within a reasonable time after such demand to make such refund or credit of excess interest shall be liable in an individual action in an amount equal to 3 times the amount thereof, together with reasonable attorney fees. 138.06(8)(8) This section does not apply to a loan or forbearance made on or after November 1, 1981. 138.06 AnnotationClass actions for the recovery of usurious interest charged by revolving credit plans are not precluded by (3). Mussallem v. Diners’ Club, Inc. 69 Wis. 2d 437, 230 N.W.2d 717 (1975). 138.06 AnnotationSub. (6) is constitutional. 60 Atty. Gen. 198.
138.09138.09 Licensed lenders. 138.09(1a)(1a) This section does not apply to any of the following: 138.09(1a)(a)(a) Banks, savings banks, savings and loan associations, trust companies, credit unions, or any of their affiliates. Effective date noteNOTE: Sub. (1a) (intro.), (a), (b), and (c) are renumbered to sub. (1c) (a) (intro.), 1., 2., and 7. eff. 1-1-25 by 2023 Wis. Acts 131 and 267. 138.09(1c)(a)(a) This section does not apply to any of the following: 138.09(1c)(a)1.1. Banks, savings banks, savings and loan associations, trust companies, credit unions, or any of their affiliates. 138.09(1c)(a)3.3. An individual or entity who, in connection with a securitization, private placement, collateral financing, or other type of investment or financing transaction, lends against or purchases consumer loans or any portion of the outstanding balances of consumer loans, if the following apply: 138.09(1c)(a)3.a.a. The consumer loans are serviced by a licensee under this section, either directly or through a contracted party. 138.09(1c)(a)3.b.b. The books and records for the consumer loans are maintained by a licensee under this section. 138.09(1c)(b)(b) This section applies to any person who takes an assignment for sale, in whole or in part, of a consumer loan with a finance charge in excess of 18 percent per year, without regard to whether the loan was originally made by an entity listed under par. (a) 1. 138.09(1d)(1d) In this section, “division” means the division of banking. Effective date noteNOTE: Sub. (1d) is renumbered to sub. (1g) (intro.) and amended eff. 1-1-25 by 2023 Wis. Act 267. 138.09(1g)(a)(a) “Business” includes any of the following activities: 138.09(1g)(a)1.1. To make a consumer loan that has a finance charge in excess of 18 percent per year. A person makes a consumer loan within the meaning of this section if the person is named as the lender in the consumer loan agreement. 138.09(1g)(a)2.2. To take an assignment, in whole or in part, of a consumer loan in which a customer is being assessed a finance charge in excess of 18 percent per year. 138.09(1g)(a)3.3. Except as provided in sub. (3) (cm), to directly collect payments from, or enforce rights against, a customer relating to a consumer loan in which a customer is being assessed a finance charge in excess of 18 percent per year. 138.09(1g)(b)(b) “Consumer loan” means a loan made by any person to a customer that is payable in installments or for which a finance charge is or may be imposed, and includes transactions pursuant to an open-end credit plan, as defined in s. 421.301 (27), other than a seller credit card, as defined in s. 421.301 (41). 138.09(1g)(f)(f) “Payment processor” means a person who facilitates the purchase of, or payment of a bill for, a good or service through a clearance and settlement system by agreement with the licensee. Payment processor does not include a collection agency, as defined in s. 218.04 (1) (a), a debt collector, as defined in s. 427.103 (3), or any person who directly performs any of the activities set forth in par. (a). 138.09(1g)(g)(g) Except in sub. (9) (a), “service” or “servicing” means collecting or receiving payments of principal, interest, and other amounts on consumer loans and undertaking other tasks related to the administration of consumer loans, including negotiating a modification or extension of consumer loans, under the direction and control of the licensee. 138.09(1g)(h)(h) “Special purpose vehicle” means an entity that, in connection with a securitization, private placement, collateral financing, or other type of investment or financing transaction, is administered by a duly chartered financial institution under a management agreement for the purpose of purchasing, making loans against, or pooling receivables, general intangibles, and other financial assets, including consumer loans or the outstanding balances of consumer loans. Effective date noteNOTE: Sub. (1g) is shown as affected eff. 1-1-25 by 2023 Wis. Act 267. 138.09(1m)(a)1.1. Before any person may do business under this section, that person shall first obtain a license from the division. 138.09(1m)(a)2.2. Applications for a license shall be in writing and made in the form and manner prescribed by the division. 138.09(1m)(a)3.3. An applicant at the time of making an application shall pay to the division a nonrefundable $300 fee for investigating the application and a $500 annual license fee for the period terminating on the last day of the current calendar year. If the cost of the investigation exceeds $300, the applicant shall upon demand of the division pay to the division the amount by which the cost of the investigation exceeds the nonrefundable fee. Effective date noteNOTE: Par. (a) is shown as affected eff. 1-1-25 by 2023 Wis. Act 267. Prior to 1-1-25 it reads: Effective date text(1m) (a) Before any person may do business under this section, charge the interest authorized by sub. (7), or assess a finance charge on a consumer loan in excess of 18 percent per year, that person shall first obtain a license from the division. Applications for a license shall be in writing and upon forms provided for this purpose by the division. An applicant at the time of making an application shall pay to the division a nonrefundable $300 fee for investigating the application and a $500 annual license fee for the period terminating on the last day of the current calendar year. If the cost of the investigation exceeds $300, the applicant shall upon demand of the division pay to the division the amount by which the cost of the investigation exceeds the nonrefundable fee.
138.09(1m)(b)1.1. Except as provided in par. (c), an application under par. (a) 2. for a license shall contain the following: Effective date noteNOTE: Subd. 1. (intro.) is shown as amended eff. 1-1-25 by 2023 Wis. Act 267. Prior to 1-1-25 it reads: Effective date text1. Except as provided in par. (c), an application under par. (a) for a license shall contain the following:
138.09(1m)(b)1.a.a. If the applicant is an individual, the applicant’s social security number. 138.09(1m)(b)1.b.b. If the applicant is not an individual, the applicant’s federal employer identification number. 138.09(1m)(b)2.2. The division may not disclose any information received under subd. 1. to any person except as follows: 138.09(1m)(b)2.a.a. The division may disclose information under subd. 1. to the department of revenue for the sole purpose of requesting certifications under s. 73.0301 and to the department of workforce development for the sole purpose of requesting certifications under s. 108.227. 138.09(1m)(b)2.b.b. The division may disclose information under subd. 1. a. to the department of children and families in accordance with a memorandum of understanding under s. 49.857. 138.09(1m)(b)2.c.c. The division may disclose information to the nationwide multistate licensing system and registry as provided in s. 224.35. 138.09(1m)(c)1.1. If an applicant who is an individual does not have a social security number, the applicant, as a condition of applying for or applying to renew a license, shall submit a statement made or subscribed under oath or affirmation to the division that the applicant does not have a social security number. The form of the statement shall be prescribed by the department of children and families. 138.09(1m)(c)2.2. Notwithstanding sub. (3) (b), any license issued or renewed in reliance upon a false statement submitted by an applicant under subd. 1. is invalid. 138.09(1m)(d)(d) The division shall utilize the nationwide multistate licensing system and registry, and the provisions of s. 224.35 shall apply, with respect to applicants and licensees under this section. 138.09(1m)(e)(e) An applicant or licensee under this section shall register with, and maintain a valid unique identifier issued by, the nationwide multistate licensing system and registry. 138.09(2)(2) The division may also require the applicant to file with the division, and to maintain in force, a bond in which the applicant shall be the obligor, in a sum not to exceed $5,000 with one or more corporate sureties licensed to do business in Wisconsin, whose liability as such sureties shall not exceed the sum of $5,000 in the aggregate, to be approved by the division and filed in a form and manner acceptable to the division, and such bond shall run to the state of Wisconsin for the use of the state and of any person or persons who may have a cause of action against the obligor of the bond under the provisions of this section. Such bonds shall be conditioned that the obligor will conform to and abide by each and every provision of this section, and will pay to the state or to any person or persons any and all moneys that may become due or owing to the state or to such person or persons from the obligor under and by virtue of the provisions of this chapter. Effective date noteNOTE: Sub. (2) is shown as amended eff. 1-1-25 by 2023 Wis. Act 267. Prior to 1-1-25 it reads: Effective date text(2) The division may also require the applicant to file with the division, and to maintain in force, a bond in which the applicant shall be the obligor, in a sum not to exceed $5,000 with one or more corporate sureties licensed to do business in Wisconsin, whose liability as such sureties shall not exceed the sum of $5,000 in the aggregate, to be approved by the division, and such bond shall run to the state of Wisconsin for the use of the state and of any person or persons who may have a cause of action against the obligor of the bond under the provisions of this section. Such bonds shall be conditioned that the obligor will conform to and abide by each and every provision of this section, and will pay to the state or to any person or persons any and all moneys that may become due or owing to the state or to such person or persons from the obligor under and by virtue of the provisions of this chapter.
138.09(3)(a)(a) Upon the filing of such application and the payment of such fee, the division shall investigate the relevant facts. Except as provided in par. (am), if the division shall find that the character and general fitness and the financial responsibility of the applicant, and the members thereof if the applicant is a partnership, limited liability company or association, and the officers and directors thereof if the applicant is a corporation, warrant the belief that the business will be operated in compliance with this section the division shall thereupon issue a license to said applicant to make loans in accordance with the provisions of this section. If the division shall not so find, the division shall deny such application. 138.09(3)(am)(am) The division may not issue a license under this section to an applicant if any of the following applies: 138.09(3)(am)2.2. The department of revenue certifies under s. 73.0301 that the applicant is liable for delinquent taxes or the department of workforce development certifies under s. 108.227 that the applicant is liable for delinquent unemployment insurance contributions. 138.09(3)(am)3.3. The applicant fails to comply, after appropriate notice, with a subpoena or warrant issued by the department of children and families or a county child support agency under s. 59.53 (5) and related to paternity or child support proceedings. 138.09(3)(am)4.4. The applicant is delinquent in making court-ordered payments of child or family support, maintenance, birth expenses, medical expenses or other expenses related to the support of a child or former spouse, as provided in a memorandum of understanding entered into under s. 49.857. 138.09(3)(b)(b) A license may be renewed or reinstated as provided in s. 224.35 (7). A license that is not renewed or reinstated by the end of the reinstatement period provided in s. 224.35 (7) shall be deemed to have expired on December 31 of the year immediately preceding the reinstatement period, unless the initial license date is between November 1 and December 31, in which instance the initial license term shall run through December 31 of the following year. Effective date noteNOTE: Par. (b) is shown as repealed and recreated eff. 1-1-25 by 2023 Wis. Act 267. Prior to 1-1-25 it reads: Effective date text(b) Every license shall remain in force and effect until suspended or revoked in accordance with this section or surrendered by the licensee, and every licensee shall, on or before each December 10, pay to the division the annual license fee for the next succeeding calendar year.
138.09(3)(c)(c) A license shall not be assignable and shall permit operation under it only at or from the location specified in the license, but this provision shall not prevent the licensee from making loans under this section which are not initiated or consummated by face to face contact away from the licensed location if permitted by the division in writing or by rule or at an auction sale conducted or clerked by a licensee. Effective date noteNOTE: Par. (c) is shown as amended eff. 1-1-25 by 2023 Wis. Act 267. Prior to 1-1-25 it reads: Effective date text(c) Such license shall not be assignable and shall permit operation under it only at or from the location specified in the license at which location all loans shall be consummated, but this provision shall not prevent the licensee from making loans under this section which are not initiated or consummated by face to face contact away from the licensed location if permitted by the division in writing or by rule or at an auction sale conducted or clerked by a licensee.
138.09(3)(cm)(cm) Notwithstanding par. (c), a licensee may contract with a person that is not licensed under this section to service a consumer loan on behalf of the licensee. The licensee is responsible for violations of this section committed by the contracted party with respect to the servicing of that loan, except where the contracted party holds a license issued by the division that would subject it to regulatory discipline for violations of this section. The licensee’s responsibility for the contracted party, as set forth in this paragraph, does not create a private right of action against the licensee.
