SB613,1,5 1An Act to renumber 411.103 (1) (a) and 425.202 (1); to consolidate, renumber
2and amend 425.206 (2) (intro.) and (a); to amend 409.609 (2) (b), 411.525 (3),
3425.206 (2) (b) and 427.105 (2); and to create 409.102 (1) (bo), 409.609 (4),
4411.103 (1) (ag), 411.525 (4), 425.202 (1g) and 425.206 (2m) of the statutes;
5relating to: repossession of collateral or leased goods.

This bill creates provisions governing the determination of whether a breach
of the peace occurs when collateral or leased goods are repossessed, and creates
immunity from liability for a person who repossesses vehicles under certain
circumstances.

Under current law, a consumer credit transaction that is entered into for
personal, family, or household purposes is generally subject to the Wisconsin
Consumer Act (WCA). A consumer credit transaction, which includes consumer
loans and consumer credit sales, means in part a transaction between a merchant
and a customer who acquires money or personal property on credit. A merchant is
defined to include a creditor or a seller of personal property on credit. The WCA
includes provisions relating to enforcement of a merchant's security interest in
collateral resulting from a consumer credit transaction, including repossession of the
collateral. With exceptions, a merchant may take possession of collateral or leased
goods only if a judgment for the merchant has been entered for recovery of the
collateral or leased goods. However, a merchant may proceed without a judgment in

repossessing collateral that is a motor vehicle if certain requirements are met,
including giving notice to the debtor and law enforcement and the elapse of at least
15 days since both the debtor's default and the merchant's notice to the debtor. Under
the WCA, “[i]n taking possession of collateral or leased goods, no merchant may . .
. [c]ommit a breach of the peace.”

Current law also adopts the Uniform Commercial Code (UCC) Article 9 -
Secured Transactions, which governs transactions that involve the granting of credit
secured by personal property of a debtor, and UCC Article 11 - Leases, which governs
the lease of movable personal property (goods). Under UCC Article 9, if a debtor
defaults, the secured party may take possession of the collateral “if it proceeds
without breach of the peace” or proceeds through judicial process. Under UCC
Article 11, for most defaults by a lessee under a lease contract, the lessor may
repossess the goods subject to the lease contract, without judicial process, “if it can
be done without breach of the peace.”

This bill creates provisions that govern the determination of whether a breach
of the peace occurs with respect to repossession of collateral or leased goods by, as
applicable, the merchant, secured party, or lessor (together referred to as “creditor”)
under the WCA and UCC. The bill specifies that the creditor or its authorized
repossessor may not commit a breach of the peace and that the conduct or activities
of the customer, debtor, or lessee, or any bystander, may not be considered in
determining whether a breach of the peace has occurred. Under the bill, an
“authorized repossessor” is defined as a person employed by a creditor or authorized
to act as an agent by a creditor, or an independent contractor hired by a creditor or
the independent contractor's employee, for the purpose of taking possession of the
collateral or leased goods.

The bill also limits liability if the repossession involves a vehicle. The bill
defines a vehicle to include, among others, a motor vehicle, an all-terrain vehicle, a
motorboat, and a snowmobile. Under the bill, no criminal or civil liability for
wrongful repossession may be imposed against a creditor or its authorized
repossessor arising from the repossession of a vehicle if, in taking possession of the
vehicle as authorized by law, the creditor or its authorized repossessor complies with
all applicable requirements. The bill also creates an additional limit on liability
against an independent contractor, or its employee, hired to repossess a vehicle by
a creditor that lacks authority to repossess the vehicle. Under the bill, no criminal
or civil liability for wrongful repossession may be imposed against the independent
contractor or its employee on the basis that the creditor was not authorized to
repossess the vehicle if 1) the creditor represented to the independent contractor or
its employee, or the independent contractor or its employee had a reasonable belief,
that the creditor was authorized to repossess the vehicle; and 2) in repossessing the
vehicle, the independent contractor or its employee complies with all applicable
requirements.

SB613,3,62 409.102 (1) (bo) “Authorized repossessor” of a secured party means a person
3employed by a secured party or authorized to act as an agent by a secured party, or
4an independent contractor hired by a secured party or the secured party's forwarding
5agent or an employee of such an independent contractor, for the purpose of taking
6possession of collateral as authorized under s. 409.609 (1) (a).