Chapter 138

138.09(7)(a)2.a. a. The amount paid to, received by or paid or payable for the account of the borrower; and

138.09(7)(a)2.b. b. To the extent that payment is deferred: the amount actually paid or to be paid by the licensee for registration, certificate of title or license fees if not included in subd. 2. a.; and additional charges permitted under this section.

138.09(7)(bp) (bp) A loan, whether precomputed or based upon the actuarial method, made after October 31, 1984, is not subject to any maximum interest rate limit.

138.09(7)(c) (c)

138.09(7)(c)1. 1. Where the interest is precomputed, the interest may be calculated on the assumption that all scheduled payments will be made when due and the effect of prepayment is governed by the provision on rebate upon prepayment. If a loan is prepaid out of the proceeds of a new loan made under this section, the principal of such new loan may include any unpaid charges on the prior loan which have accrued before the making of the new loan, unless the prior loan was precomputed in which event the principal of the new loan may include the balance remaining after making the required rebate plus any accrued charges.

138.09(7)(c)2. 2. For the purpose of computing interest under this section, a day shall be considered one-thirtieth of a month when such computation is made for a fraction of a month. Loan contracts providing for installments payable at monthly intervals may provide for a first period between the date of the contract and the first installment due date of not more than 45 days and not less than 15 days. Where the first period is greater or lesser than one month, interest may be charged only for each day in the first period, at a rate not to exceed one-thirtieth of the interest which would be applicable to a first installment period of one month, but such first period may be considered a monthly interval for purposes of determining rebates. Where the first period is greater than one month, any additional interest charge shall be earned and may be added to and collected at the time of the first installment payment.

138.09(7)(c)3. 3. In lieu of deducting the interest and charging the delinquency and deferral charges authorized in this section, a licensee may contract for and receive a rate of charge not exceeding that rate which, computed on scheduled unpaid balances of the proceeds of the loan contract, would produce an amount of charge equal to the total of the interest which may be deducted from such loan contract under this section, and such rate of charge may be computed on actual unpaid principal balances from time to time outstanding until the loan is fully paid. When such rate of charge is made in lieu of other charges, the provisions relating to refunds and delinquency charges shall not apply to such loans.

138.09(7)(c)4. 4. If 2 installments or parts thereof of a precomputed loan are not paid on or before the 10th day after their scheduled or deferred due dates, a licensee may elect to convert the loan from a precomputed loan to one in which the interest is computed on unpaid balances actually outstanding. In this event the licensee shall make a rebate pursuant to the provisions on rebate upon prepayment as of the due date of an unpaid installment, and thereafter may charge interest from the due date as provided in subd. 3. and no further delinquency or deferral charges shall be made. The rate of interest may equal but not exceed the annual percentage rate of finance charge which was disclosed to the borrower when the loan was made. The rate of interest shall be computed on actual unpaid balances of the contract as reduced by the rebate for the time that such balances are actually outstanding from the due date as of which the rebate was made until the contract is fully paid.

138.09(7)(d) (d)

138.09(7)(d)1. 1. No loan of $3,000 or less, excluding interest, scheduled to be repaid in substantially equal installments at equal periodic intervals shall provide for a scheduled repayment of principal more than 36 months and 15 days from the date of the contract if the principal exceeds $700, nor more than 24 months and 15 days from the date of the contract if the principal is $700 or less.

138.09(7)(d)2. 2. A licensee may make loans under a continuing loan agreement which provides for future or additional advances under the same instrument if at the time of each new advance of money, any existing unpaid balance is reduced by any required rebate and the resulting amount plus the additional money advanced plus interest, official fees and premiums or identifiable charges for insurance, if any, are combined, and for the purpose of the limitations of subd. 1. only, the date of the loan contract shall be deemed the date of said advance.

138.09(7)(e) (e)

138.09(7)(e)1. 1. With respect to a precomputed loan which is scheduled to be repaid in substantially equal installments, the parties may agree to a delinquency charge on any installment not paid in full on or before the 10th day after its scheduled or deferred due date, in an amount not to exceed 5 percent of the unpaid amount of the installment. The delinquency charge may be collected only once on any one installment but may be collected when due or at any time thereafter.

138.09(7)(e)3. 3. Notwithstanding subd. 1., delinquency charges on precomputed consumer loans shall be governed by s. 422.203.

138.09(7)(f) (f)

138.09(7)(f)1. 1. Subject to subds. 2. and 3., with respect to a precomputed loan, the parties before or after default may agree in writing to a deferral of all or part of any unpaid installment, and the licensee may make and collect a charge computed in the same manner as the deferral charge computed in accordance with s. 422.204 (1) to (5) whether or not the loan under this section is a consumer loan.

138.09(7)(f)2. 2. In addition to the deferral charge, the licensee may make appropriate additional charges. The amount of such charges which is not paid in cash may be added to the amount deferred for the purpose of calculating the deferral charge.

138.09(7)(f)3. 3. The parties may agree in writing at any time, including at the time of a precomputed loan that if an installment is not paid within 30 days after its due date, the licensee may grant a deferral and make charges under this section, if a notice is sent to the customer advising the customer of the amount of the deferral charge, the period of deferral and that if the installment is prepaid before maturity that a proportionate refund of the deferral charge will be given. No deferral charge may be made for a period after the date that such a lender elects to accelerate the maturity of the agreement.

138.09(7)(f)4. 4. Notwithstanding subds. 1., 2. and 3., deferral charges on precomputed consumer loans shall be governed by s. 422.204.

138.09(7)(g) (g) Upon prepayment in full by cash, renewal, refinancing or otherwise, the borrower shall be entitled to a rebate of the unearned interest as provided in this paragraph. If the combined rebate of interest and credit insurance premiums otherwise required is less than $1, no rebate need be made. The refunds shall be determined as follows:

138.09(7)(g)1. 1. On a loan where the interest is precomputed and which is repayable in substantially equal successive installments at approximately equal intervals, whether or not the precomputed loan is a consumer loan, the amount of rebate shall be computed under s. 422.209 (2) (a) except for any additional interest charge covered under subd. 3.

138.09(7)(g)2. 2. For any other loan, the amount of the rebate of interest shall not be less than the difference between the interest charged and the interest earned at the agreed rate computed upon the unpaid principal balances, exclusive of interest, of the transaction prior to payment in full.

138.09(7)(g)3. 3. If the first payment period is greater than one month and additional interest is charged as permitted under par. (c) 2., the additional interest charged for the extension of the first payment period is considered wholly earned on the first installment date and is not considered in computing rebates.

138.09(7)(gm) (gm)

138.09(7)(gm)3. 3. Upon prepayment in full of a loan of less than $5,000 which is entered into on or after August 1, 1987, and which has a term of less than 37 months, by cash, renewal, refinancing or otherwise, the borrower shall be entitled to a rebate of the unearned interest as provided in this subdivision. If the combined rebate of interest and credit insurance premiums otherwise required is less than $1, no rebate need be made. The refunds shall be determined as follows:

138.09(7)(gm)3.a. a. On a loan where the interest is precomputed and which is repayable in substantially equal successive installments at approximately equal intervals, the amount of rebate shall be computed under s. 422.209 (2) (a) except for any additional interest charge under par. (c) 2.

138.09(7)(gm)3.b. b. For any other loan, the amount of the rebate of interest may not be less than the difference between the interest charged and the interest earned at the agreed rate, computed upon the unpaid principal balance.

138.09(7)(gm)3.c. c. If the first payment period is greater than one month and additional interest is charged under par. (c) 2., the additional interest is earned on the first installment date and may not be considered in computing rebates.

138.09(7)(gm)4. 4. Upon prepayment in full of a loan of $5,000 or more or a loan of less than $5,000 if for a term of 37 months or more, entered into on or after August 1, 1987, by cash, renewal, refinancing or otherwise, the borrower shall be entitled to a rebate of the unearned interest computed under s. 422.209 (2) (b) 1. or 2. The licensee may determine whether the rebate is computed under s. 422.209 (2) (b) 1. or 2. If the combined rebate of interest and credit insurance premiums otherwise required is less than $1, no rebate need be made. If the first payment period is greater than one month and additional interest is charged under par. (c) 2., the additional interest is earned on the first installment date and may not be considered in computing rebates.

138.09(7)(h) (h) A licensee may require property insurance, and may accept, but shall not require, credit life insurance or credit accident and sickness insurance or both, if such insurance is issued in accordance with ch. 424, whether or not the loan is a consumer loan.

138.09(7)(i) (i) In addition to interest, the licensee may charge all of the following:

138.09(7)(i)1. 1. The additional charges allowed in s. 422.202 whether or not the loan is a consumer loan.

138.09(7)(i)2. 2. An amount sufficient to cover the fee for filing the termination statement required by s. 409.513 on loans secured by merchandise other than a motor vehicle, a manufactured home, or a boat.

138.09(7)(i)3. 3. On motor vehicle loans, the actual filing fee required for filing with the department of transportation under ch. 342 or, on boat loans, the filing fee required for filing with the department of natural resources under ch. 30.

138.09(7)(i)4. 4. A nonrefundable prepaid finance charge on a consumer loan, which is earned by the licensee when charged, subject to the following:

138.09(7)(i)4.a. a. If the amount financed is $500 or less, the prepaid finance charge may not exceed 10 percent of the amount financed or $50, whichever is less.

138.09(7)(i)4.b. b. If the amount financed is more than $500 but does not exceed $1,000, the prepaid finance charge may not exceed 7.5 percent of the amount financed or $75, whichever is less.

138.09(7)(i)4.c. c. If the amount financed exceeds $1,000, the prepaid finance charge may not exceed 5 percent of the amount financed or $175, whichever is less.

138.09(7)(i)4.d. d. Notwithstanding subd. 4. a. to c., a prepaid finance charge assessed on a consumer loan that is secured primarily by an interest in real property, in a mobile home, as defined in s. 101.91 (10), or in a manufactured home, as defined in s. 101.91 (2), including a refinancing or loan consolidation, may not exceed 2 percent of the amount financed.

138.09(7)(i)4.e. e. If a licensee charges a prepaid finance charge on a consumer loan in which the amount financed does not exceed $1,000 that is prepaid from the proceeds of a new loan made by the same licensee within 4 months after the prior loan, then the licensee shall reduce any prepaid finance charge on the new loan by the amount of the prepaid finance charge on the prior loan.

138.09(7)(i)4.f. f. If a licensee charges a prepaid finance charge on a consumer loan in which the amount financed exceeds $1,000 that is prepaid from the proceeds of a new loan made by the same licensee within 6 months after the prior loan, then the licensee shall reduce any prepaid finance charge on the new loan by the amount of the prepaid finance charge on the prior loan.

138.09(7)(j) (j) No licensee may divide or encourage a borrower to divide any loan for the purpose of obtaining a higher rate of finance charge than would otherwise be permitted under this section.

138.09(7)(jm) (jm)

138.09(7)(jm)1. 1. Subject to subd. 2., a licensee may charge, in addition to interest, a loan administration fee on a consumer loan, including a refinancing or loan consolidation, if all of the following conditions are met:

138.09(7)(jm)1.a. a. The loan administration fee does not exceed 2 percent of the principal in the consumer loan, refinancing or consolidation.

138.09(7)(jm)1.b. b. The loan administration fee is charged for a consumer loan that is secured primarily by an interest in real property, in a mobile home, as defined in s. 101.91 (10), or in a manufactured home, as defined in s. 101.91 (2).

138.09(7)(jm)2. 2. Notwithstanding subd. 1., if a licensee charges a loan administration fee on a consumer loan that is prepaid from the proceeds of a new loan made by the same licensee within 6 months after the prior loan, then the licensee shall reduce any loan administration fee on the new loan by the amount of the loan administration fee on the prior loan.

138.09(7)(jm)3. 3. A loan administration fee charged under this paragraph may be included in the amount financed in the consumer loan. The loan administration fee is earned by the licensee when charged and need not be refunded under par. (gm) 3. or 4. A licensee who charges a loan administration fee under this paragraph may not also retain a loan administration fee under s. 422.209 (1m) in connection with the same consumer loan transaction.

138.09(7)(k) (k) All consumer loans shall be governed by chs. 421 to 427, but to the extent that chs. 421 to 427 are inconsistent with this section, this section shall govern.

138.09(8) (8) Every licensee shall:

138.09(8)(a) (a) Deliver to the borrower, at the time a loan is made, a statement in the English language showing in clear and distinct terms the amount and date of the note and of its maturity, the nature of the security, if any, for the loan, the name and address of the borrower and of the licensee, the amount of interest, the proceeds of the loan after deducting such interest, a description of the payment schedule and the default charge. Disclosures made in accordance with the federal consumer credit protection act and regulation Z shall be deemed to comply with such disclosures. The statement shall also indicate that the borrower may prepay the borrower’s loan in whole or in part and that if the loan is prepaid in full the borrower will receive a refund of interest as provided by this section. The statement shall also indicate the percentage per year of interest charged in the transaction.

138.09(8)(b) (b) Give to the borrower a plain and complete receipt for all cash payments made on account of any such loan at the time such payments are made.

138.09(8)(c) (c) Permit payments of the loan in whole or in part prior to its maturity.

138.09(8)(d) (d) Upon repayment of the loan in full mark indelibly every obligation, other than a security agreement, signed by the borrower with the word “Paid” or “Canceled” and cancel and return any note. When there is no outstanding secured obligation such licensee shall restore any pledge, cancel and return any assignment, cancel and return any security agreement given to the licensee by the borrower and file a termination statement terminating any filed financing statement.

138.09(8)(e) (e) Take no note, promise to pay, security nor any instrument in which blanks are left to be filled in after the loan has been made except that a detailed description or inventory of the security may be filled in, with the written consent of the borrower within 10 days thereafter.

138.09(9) (9) 

138.09(9)(a) (a) No person, except as authorized by statutes, shall directly or indirectly charge, contract for or receive any interest or consideration greater than allowed in s. 138.05 upon the loan, use or forbearance of money, goods or things in action, or upon the loan, use or sale of credit. The foregoing prohibition shall apply to any person who as security for any such loan, use or forbearance of money, goods or things in action, or for any such loan, use or sale of credit, makes a pretended purchase of property from any person and permits the owner or pledgor to retain the possession thereof, or who by any device or pretense of charging for his or her services or otherwise seeks to obtain a greater compensation than is authorized by this section.

138.09(9)(b) (b) No loan made under this section, for which a greater rate or amount of interest, than is allowed by this section, has been contracted for or received, wherever made, shall be enforced in this state, and every person in any wise participating therein in this state shall be subject to this section. If a licensee makes an excessive charge as the result of an unintentional mistake, but upon demand makes correction of such mistake, the loan shall be enforceable and treated as if no violation occurred at the agreed rate. Nothing in this paragraph shall limit any greater rights or remedies afforded in chs. 421 to 427 to a customer in a consumer credit transaction.

138.09(10) (10) Any person, partnership or corporation and the several officers and employees thereof who shall violate any of the provisions of this section shall be guilty of a misdemeanor, and upon conviction thereof shall be fined not more than $500 or imprisoned for not more than 6 months or both.

138.09(11) (11) The division may employ necessary examiners or other personnel from time to time and fix their compensation.

138.09(12) (12) No person, association, partnership or corporation doing business under the authority of any law of this state or of the United States relating to banks, savings banks, trust companies, savings or building and loan associations, or credit unions shall be eligible to become a licensee under this section.

138.09 History History: 1971 c. 60, 125, 239, 307; 1973 c. 2, 243; 1975 c. 407; 1977 c. 29 s. 1654 (7) (b); 1977 c. 444; 1979 c. 110 s. 60 (13); 1979 c. 168; 1981 c. 45 ss. 11 to 16, 51; 1983 a. 36, 192, 385; 1985 a. 127; 1987 a. 27; 1989 a. 31; 1991 a. 39, 221; 1993 a. 112, 184, 368, 482, 490; 1995 a. 27, 225, 272; 1997 a. 27, 191, 237; 1999 a. 9, 31, 32, 53; 2001 a. 10, 107; 2005 a. 158, 215; 2007 a. 11, 20; 2009 a. 405; 2011 a. 32; 2013 a. 36; 2023 a. 131, 267.

138.09 Cross-reference Cross-reference: See also ch. DFI-Bkg 77, Wis. adm. code.

138.09 Annotation Installment sellers are not precluded by s. 138.09, 1973 stats., from charging precomputed interest. First National Bank of Wisconsin Rapids v. Dickinson, 103 Wis. 2d 428, 308 N.W.2d 910 (Ct. App. 1981).

138.09 Annotation A municipal ordinance that dictates where a state-licensed payday loan operation may locate its business and what hours it may operate has nothing to do with the state’s regulation of the loans themselves and its licensing of loan providers and is not preempted by state law. The Payday Loan Store of Wisconsin, Inc. v. City of Madison, 333 F. Supp. 2d (2004).

138.09 Annotation Wisconsin has a compelling interest in applying statutory regulations to banking activities on Indian reservations. 80 Atty. Gen. 337.

138.09 Annotation Get Cash Until Payday!: The Payday-Loan Problem in Wisconsin. Noyes. 2006 WLR 1628.

138.10 138.10 Pawnbrokers.

138.10(1) (1) Definitions. In this section:

138.10(1)(a) (a) “Pawnbroker” includes any person who engages in the business of lending money on the deposit or pledge of personal property, other than choses in action, securities, or written evidences of indebtedness; or purchases personal property with an expressed or implied agreement or understanding to sell it back at a subsequent time at a stipulated price.

138.10(1)(b) (b) “Pawnbroking” means the business of a pawnbroker as defined in this section.

138.10(1)(c) (c) “Pawn ticket” means the card, book, receipt or other record furnished to the pledgor at the time a loan is granted containing the terms of the contract for a loan.

138.10(1)(d) (d) “Person” includes an individual, partnership, association, business corporation, nonprofit corporation, common law trust, joint-stock company or any group of individuals however organized.

138.10(1)(e) (e) “Pledge” means an article or articles deposited with a pawnbroker as security for a loan in the course of the pawnbroker’s business as defined in par. (a).

138.10(1)(f) (f) “Pledgor” means the person who obtains a loan from a pawnbroker and delivers a pledge into the possession of a pawnbroker, unless the person discloses that he or she is or was acting for another in which case a “pledgor” means the disclosed principal.

138.10(2) (2) Maximum loan. A pawnbroker’s loan may not exceed $150.

138.10(2m) (2m) Pawnbroking by licensed lenders. The division of banking may promulgate rules regulating the conduct of pawnbroking by persons licensed under s. 138.09 or 138.14.

138.10(4) (4) Maximum interest or charges. A pawnbroker shall not charge, contract for or receive interest in excess of 3 percent per month on any loan or balance thereon and such interest shall not be increased by charging commission, discount, storage or other charge directly or indirectly, nor by compound interest; provided, however, that when the interest herein specified amounts to less than $1 per month, the minimum charge shall be $1 for the first month and 50 cents for each succeeding month during the loan period.

138.10(4m) (4m) When limit on maximum interest does not apply. Subsection (4) does not apply to a pawnbroker’s loan made after October 31, 1984 and before November 1, 1987.

138.10(5) (5) Computation of interest or charges. The interest and charges authorized by this section shall be computed at the rates specified on the actual principal balance of the loan due for the actual time which has elapsed from the date of the loan to the date of payment. For the purpose of calculation of interest and charges permitted under this section, a year shall be 12 calendar months, and a month shall be one calendar month, or any fractional part thereof. A calendar month shall be any period from a certain date in one month to the same date in the next succeeding month.

138.10(8) (8) Sale of pledge. Upon default in the payment of any loan, a pawnbroker may sell the pledge upon the conditions contained in this section.

138.10(8)(a) (a) A pawnbroker may sell a pledge at private sale for an amount not less than that agreed to by the pledgor, which amount shall be stipulated on the pawn ticket and shall not be less than 125 percent of the amount of the loan. A pledge which cannot be sold at private sale at the minimum price agreed to by the pledgor must be sold at public auction, which sale shall be conducted in the manner provided by s. 779.48 (1).

138.10(8)(b) (b) No unredeemed pledge may be sold before the expiration of 90 days after the due date of the loan unless otherwise specifically authorized in writing by the pledgor. The authority to sell an unredeemed pledge prior to the expiration of 90 days after the due date of the loan must be given by the pledgor on a date subsequent to the due date of the loan.

138.10(8)(c) (c) An unredeemed pledge must be sold within 12 months of the due date of a loan. No interest or charges permitted under this section may be collected on a loan after the expiration of 12 months of the due date of a loan, whether the loan is renewed or the loan is paid and the pledge redeemed.

138.10(9) (9) Notice of sale. A pawnbroker shall not sell any pledge unless due notice of such contemplated sale has been sent to the pledgor, by registered mail or other means authorized by rule of the division of banking, to the address most recently given by the pledgor, as shown in the pawnbroker’s records. Notice of the contemplated sale of a pledge shall be sent to the pledgor not less than 30 days prior to the date of sale. Such notice shall state total amount of principal, interest and charges due on the loan as of the date of the notice.

138.10(10) (10) Disposition of proceeds. The proceeds from the sale of a pledge shall be applied in the order specified, to the following purposes: Payment of the auctioneer’s charges if sold at public auction, or commission for selling not to exceed 5 percent if sold at private sale; payment of principal of the loan; payment of the interest on the loan permitted under this section, and payment of the charges on the loan permitted under this section; payment of postage for mailing notice to the pledgor of the contemplated sale or notice of the surplus. The surplus, if any, shall be paid to the pledgor or such other person who would have been entitled to redeem the pledge had it not been sold.

138.10(11) (11) Notice of surplus. Notice of any surplus from the sale of a pledge shall be sent to the pledgor within 10 days of the date of sale. This notice may be sent by any means authorized for a notice of sale under sub. (9).

138.10(12) (12) Reversion of surplus. If a surplus remaining from the sale of a pledge is not paid or claimed within one year from the date of sale, such surplus shall revert to the pawnbroker. The pawnbroker shall not be required to pay any interest on an unpaid surplus.

138.10(13) (13) Forfeiture. A pawnbroker who charges, contracts for or receives interest or charges greater than permitted under this section shall forfeit both principal and interest, and shall return the pledge upon demand of the pledgor and surrender of the pawn ticket, without tender or payment of principal or interest.