If a provider is required to register under the bill, the bill imposes various
requirements and limitations on the provider in connection with providing earned
income access services in this state to consumers, including all of the following:
1. The provider must provide proceeds to consumers on a nonrecourse basis.
2. Each time the provider provides proceeds to a consumer, the provider must
inform the consumer when the provider will make its first attempt to collect
repayment of those proceeds from the consumer.
3. If the provider attempts to collect repayment of proceeds from a consumer's
depository institution account, the provider must comply with applicable National
Automated Clearinghouse Association rules.
4. The provider may not charge a consumer a late fee or any other monetary
penalty if the consumer fails to repay proceeds.
5. The provider may not require a consumer to make a “mandatory payment,”
which the bill defines as “an amount the provider determines a consumer must pay
to the provider as a condition of receiving proceeds.”
6. The provider must, before providing proceeds to a consumer, inform the
consumer in writing of any “nonmandatory payments” that may be associated with
the provider providing earned income access services to consumers. The bill defines
“nonmandatory payment” as “an amount paid by a consumer or an obligor to a
provider that is not a mandatory payment,” for example, a tip or gratuity a consumer
pays to the provider.
7. The provider may collect a nonmandatory payment from a consumer, but the
provider may not condition the amount of proceeds, or the frequency with which the
provider provides proceeds, based on the amount of the consumer's nonmandatory
payment.
The bill provides that current state laws that regulate persons that originate
or service payday loans do not apply to registered providers, and current laws that
regulate licensed lenders, which are certain lenders licensed by the division that
assess finance charges greater than 18 percent for consumer loans, do not apply to
registered providers. The bill also provides that the Wisconsin Consumer Act does
not apply to proceeds. Under current law, the Wisconsin Consumer Act grants
consumers certain rights and remedies and contains notice and disclosure
requirements and prohibitions relating to consumer credit transactions that are
entered into for personal, family, or household purposes. The bill also specifies that
1) proceeds provided in compliance with the regulations created in the bill are not
considered credit and a registered provider that provides proceeds is not considered
a creditor; and 2) nonmandatory payments by a consumer are not considered a
finance charge under the federal Truth in Lending Act.
The bill requires a registered provider to submit an annual report to the
division that includes certain information related to the provider's earned income
access services in this state and to keep certain books and records. The bill gives the
division the right to suspend or revoke a provider's certificate of registration under
certain circumstances, including if the provider fails to pay the annual registration
fee, fails to maintain the required bond or letter of credit, or makes a material
misstatement to the division. The bill provides the division with certain authority
to enforce the regulations created in the bill.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB1099,1
1Section
1. 73.0301 (1) (d) 6. of the statutes is amended to read:
AB1099,3,52
73.0301
(1) (d) 6. A license or certificate of registration issued by the
3department of financial institutions, or a division of it, under ss. 138.09, 138.12,
4138.14, 202.12 to 202.14, 202.22,
203.03, 217.06, 218.0101 to 218.0163, 218.02,
5218.04, 218.05, 224.72, 224.725, 224.93 or under subch. IV of ch. 551.
AB1099,2
6Section
2. 108.227 (1) (e) 6. of the statutes is amended to read:
AB1099,4,4
1108.227
(1) (e) 6. A license or certificate of registration issued by the
2department of financial institutions, or a division of it, under ss. 138.09, 138.12,
3138.14, 202.12 to 202.14, 202.22,
203.03, 217.06, 218.0101 to 218.0163, 218.02,
4218.04, 218.05, 224.72, 224.725, 224.93 or under subch. IV of ch. 551.
AB1099,3
5Section
3
. 138.09 (1a) (c) of the statutes is created to read:
AB1099,4,76
138.09
(1a) (c) Providers of earned income access services required to register
7under s. 203.03 (1).
AB1099,4
8Section
4
. 138.14 (3) of the statutes is amended to read:
AB1099,4,129
138.14
(3) Exemptions. This section does not apply to banks, savings banks,
10savings and loan associations, trust companies, credit unions, or any of their
11affiliates
or to providers of earned income access services required to register under
12s. 203.03 (1).
AB1099,5
13Section
5. Chapter 203 of the statutes is created to read:
AB1099,4,1514
CHAPTER 203
15
earned income access services
AB1099,4,16
16203.01 Definitions. In this chapter:
AB1099,4,17
17(1) “Consumer” means an individual who resides in this state.
AB1099,4,18
18(2) “Division" means the division of banking.
AB1099,4,23
19(3) “Earned but unpaid income” means money that is based on wages,
20compensation, or other income that a consumer represents, and that a provider
21determines, has been earned by or has accrued to the benefit of the consumer but that
22has not, at the time the proceeds are provided, been paid to the consumer by an
23obligor.
AB1099,5,3
1(4) “Earned income access service” means the business of delivering proceeds
2to consumers before the date on which obligors are obligated to pay salary, wages, or
3other benefits.
AB1099,5,5
4(5) “Mandatory payment” means an amount a provider determines a consumer
5must pay to the provider as a condition of receiving proceeds.