The division shall have the same power to conduct hearings, take testimony, and secure evidence as is provided in ss. 217.17
The division for the purpose of discovering violations of this section may investigate the business of a licensee transacted under this section, and shall investigate convictions reported to the division by any district attorney for violation by a licensee of this section. The place of business, books of account, papers, records, safes, and vaults of a licensee shall be open to inspection and examination by the division for the purpose of such investigation and the division may examine under oath all persons whose testimony the division may require relative to such investigation.
The cost of any investigation, examination, or hearing, including witness fees or any other expenses, conducted by the division under this section involving a licensee shall be paid by the licensee within 30 days after demand therefor by the division, and the state may maintain an action for the recovery of such costs and expenses.
Actual costs incurred by the division to examine books and records maintained outside of this state shall be paid by the licensee.
(9) Revocation and suspension of licenses. 138.14(9)(a)(a)
The division may suspend or revoke any license issued under this section if the division finds any of the following:
That the licensee has violated any provision of this section, any rule promulgated thereunder, or any lawful order of the division made thereunder.
That any fact or condition exists which, if it had existed at the time of the original application for such license, would have warranted the division in refusing to issue such license.
That the licensee made a material misstatement in an application for a license or in information furnished to the division.
That the licensee has failed to pay the annual license fee or to maintain in effect the bond required under sub. (4) (c)
The division shall restrict or suspend a license issued under this section if the division finds that the licensee is an individual who fails to comply, after appropriate notice, with a subpoena or warrant issued by the department of workforce development or a county child support agency under s. 59.53 (5)
and related to paternity or child support proceedings or who 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
. A licensee whose license is restricted or suspended under this paragraph is entitled to a notice and hearing only as provided in a memorandum of understanding entered into under s. 49.857
and is not entitled to any other notice or hearing under this section.
The division shall revoke a license issued under this section if the department of revenue certifies under s. 73.0301
that the licensee is liable for delinquent taxes. A licensee whose license is revoked under this paragraph for delinquent taxes is entitled to a notice under s. 73.0301 (2) (b) 1. b.
and a hearing under s. 73.0301 (5) (a)
but is not entitled to any other notice or hearing under this section.
The division shall revoke a license issued under this section if the department of workforce development certifies under s. 108.227
that the licensee is liable for delinquent unemployment insurance contributions. A licensee whose license is revoked under this paragraph for delinquent unemployment insurance contributions is entitled to a notice under s. 108.227 (2) (b) 1. b.
and a hearing under s. 108.227 (5) (a)
but is not entitled to any other notice or hearing under this section.
Except as provided in pars. (b)
, no license shall be revoked or suspended except after a hearing under this section. A complaint stating the grounds for suspension or revocation together with a notice of hearing shall be delivered to the licensee at least 5 days in advance of the hearing. In the event the licensee cannot be found, complaint and notice of hearing may be left at the place of business stated in the license,which shall be considered the equivalent of delivering the notice of hearing and complaint to the licensee.
Before any licensee enters into a payday loan with an applicant, the licensee shall do all of the following:
Disclose to the applicant the total amount of all fees and costs, in dollars, to be paid by the applicant for the loan assuming that the loan is paid in full at the end of the loan term.
Disclose to the applicant the annual percentage rate to be paid by the applicant on the loan assuming that the loan is paid in full at the end of the loan term.
Provide to the applicant a copy of the written informational materials specified in sub. (9r)
Disclose to the applicant that he or she has the right to rescind the loan transaction as provided in sub. (11r)
Disclose to the applicant the payment requirements that may apply under sub. (11g) (a)
if the loan is not paid in full at the end of the loan term.
A licensee shall retain, for at least 3 years after the origination date of any payday loan, a record of compliance with par. (a)
with respect to the loan.
(9m) Income verification.
Before entering into a payday loan with an applicant that has not previously been a customer of the licensee, the licensee may request the applicant's consumer report from a consumer reporting agency as part of the licensee's underwriting process and the licensee may rely on the consumer report as a permissible method of income verification in making the payday loan. The licensee may also rely on the same consumer report in underwriting and making subsequent payday loans to the same customer.
The division shall develop written informational materials on payday loans and the payday loan industries. These informational materials shall be designed to educate individuals regarding the operation and potential costs of payday loans and of other options for borrowing funds that may be available.
The informational materials under par. (a)
shall include a clear and conspicuous notice that a payday loan is not intended to meet long-term financial needs and that a payday loan applicant should use a payday loan only to provide funds in a financial emergency.
The informational materials under par. (a)
shall include all of the following information, based upon aggregated information from reports submitted under sub. (7) (d)
for the most recent reporting period:
The percentage of customers originating payday loans who defaulted on the loan.
The percentage of customers originating payday loans whose payment method was dishonored or denied for insufficient funds.
The percentage of customers originating payday loans that resulted in repayment under sub. (11g) (a)
The informational materials under par. (a)
shall include a summary of all actions that the licensee may take against a payday loan customer if the customer defaults on the payday loan or if the customer's check or electronic fund transfer is dishonored or denied for insufficient funds.
The division shall annually update the informational materials under par. (a)
, based upon the division's analysis of reports received under sub. (7) (d)
The division shall make copies of the informational materials under par. (a)
available, upon request, to licensees and to the public, including making these informational materials available on the Internet site of the department of financial institutions. The division may charge licensees a reasonable fee for printed copies of informational materials supplied under this paragraph.
Except as provided in sub. (12) (b)
, this section imposes no limit on the interest that a licensee may charge before the maturity date of a payday loan.
If a payday loan is not paid in full on or before the maturity date, a licensee may charge, after the maturity date, interest at a rate not exceeding 2.75 percent per month, except that if a licensee makes a subsequent payday loan to the customer under sub. (12) (a)
, and the customer does not pay the subsequent loan in full on or before the maturity date of the subsequent loan, the licensee may charge, after the maturity date of the subsequent loan, interest at a rate not exceeding 2.75 percent per month on the subsequent loan and the licensee may not charge any interest under this subdivision on the prior loan. Interest earned under this subdivision shall be calculated at the rate of one-thirtieth of the monthly rate charged for each calendar day that the balance of the loan is outstanding. Interest may not be assessed on any interest earned under this subdivision.
Except as provided in par. (b) 2.
, no licensee may impose any penalty on a customer arising from the customer's prepayment of or default or late payment on a payday loan, including any payment under sub. (11g) (a)
A licensee may not assess a customer any fee or charge for database access or usage.
A licensee may present a customer's check for payment no more than once. For each customer authorization to initiate an electronic fund transfer from the customer's account, a licensee may initiate an electronic fund transfer no more than once. The only charge that a licensee may impose for dishonor of a customer's check or denial of the licensee's instruction to execute an electronic fund transfer is a service charge that does not exceed $15.
A customer may pay a payday loan in whole or in part prior to the maturity date of the loan.
Upon prepayment in full, a refund of the unearned portion of any interest assessed by the licensee must be allowed. The amount of such refund shall not be less than the difference between the interest charged and the interest earned at the agreed rate computed upon the unpaid principal balance of the loan from time to time outstanding prior to repayment in full.
Except as provided in par. (b)
, if a customer fails to repay a payday loan in full at the end of the loan term, the licensee that made the loan shall offer the customer the opportunity to repay the outstanding balance of the loan in 4 equal installments with due dates coinciding with the customer's pay period schedule.
If a licensee offers a customer the opportunity to make repayment under par. (a)
, then, during the 12-month period following the offer, no licensee, including the licensee making the offer, is required to offer the customer another opportunity to repay a payday loan under par. (a)
A customer may rescind a payday loan, before the close of business on the next day of business after the loan is made, or, if the place of business where the loan is made is open 24 hours, before 5 p.m. on the next day of business after the loan is made, by returning to the licensee the proceeds of the payday loan. The licensee may not charge the customer any fee for rescinding the payday loan as provided in this subsection.
A customer may repay a payday loan with the proceeds of a subsequent payday loan made by the same or another licensee or an affiliate of the same or another licensee, but if the customer does so, the customer may not repay the subsequent payday loan with the proceeds of another payday loan made by the same or another licensee or an affiliate of the same or another licensee. A repayment of a subsequent payday loan and the origination of a new payday loan from the same or another licensee or an affiliate of the same or another licensee within a 24-hour period shall be considered proof of violation of the prohibition under this paragraph.
No licensee may make a payday loan to a customer that results in the customer having an outstanding aggregate liability in principal, interest, and all other fees and charges, to all licensees who have made payday loans to the customer of more than $1,500 or 35 percent of the customer's gross monthly income, whichever is less. As provided in sub. (9m)
, a licensee may rely on a consumer report to verify a customer's income for purposes of this paragraph.
No licensee may make a payday loan to a customer if the licensee determines, knows, or should have known, that the customer identification number of the customer is invalid.
No licensee may take a note, promise to pay, or any other instrument, in which blanks are left to be filled in after the payday loan has been made.
No licensee may advertise, print, display, publish, distribute, or broadcast, or cause to be printed, displayed, published, distributed, or broadcast, in any manner, any statement with regard to the rates, terms, or conditions of a payday loan that is false or calculated to deceive. With respect to matters specifically governed by s. 423.301
, compliance with such section satisfies the requirements of this paragraph.
If a check held by a licensee as a result of a payday loan is dishonored, or an instruction to execute an electronic funds transfer authorized as the result of a payday loan is denied, the licensee may bring an action to collect the amount of the check or electronic funds transfer, but may not threaten or pursue criminal action against a debtor as a result of the debtor's dishonored check or denied electronic funds transfer or the debtor's payday loan not being paid.
All payday loans shall be governed by chs. 421
, but to the extent that chs. 421
are inconsistent with this section, this section shall govern. All payday loans shall be governed by ch. 427
A licensee shall deliver to the customer, at the time a payday loan is made, a statement in the English and Spanish languages including all the disclosures required by the federal Consumer Credit Protection Act. The statement shall disclose that the customer may prepay the customer's loan in whole or in part and that if the loan is prepaid in full the customer will receive a refund of interest as provided by this section. The statement shall also clearly and conspicuously indicate the percentage per year of interest charged for the payday loan.
A licensee shall give to the customer a plain and complete receipt for all cash payments made on account of any payday loan at the time such payments are made.
No payday loan, wherever made, for which a greater rate or amount of interest than is allowed under sub. (10) (a) 2.
has been contracted for or received, may be enforced in this state, and every person in any way participating therein in this state shall be subject to this section. If a licensee makes an excessive charge of such interest 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 a customer in a consumer credit transaction.
The division or a database provider shall develop, implement, and maintain a single statewide database that has real-time access through an Internet connection, is accessible at all times to licensees and the division, and otherwise meets the requirements of this section.
The division may operate the database or may contract with a single 3rd-party provider to operate the database. If the division contracts with a 3rd-party provider for the operation of the database, the division shall do all the following:
Ensure that the 3rd-party provider operates the database according to the provisions of this section.
In selecting a 3rd-party provider, consider the cost of providing the service and the 3rd-party provider's ability to meet all the requirements of this section.
In selecting a 3rd-party provider, give strong consideration to all of the following:
The 3rd-party provider's ability to prevent fraud, abuse, and other unlawful activity associated with payday loan transactions, and to provide additional tools for the administration and enforcement of this section.
Whether the provider is currently providing a similar service for another state.
Allow a licensee accessing the database to check a customer's unique identification number that is assigned to the customer in a manner specified by the division. A customer's unique identification number may not be based on the customer's social security number.
Allow a licensee accessing the database to determine if making a new payday loan would cause a violation of this section.
Provide information necessary to aid a licensee in complying with any requirements imposed under federal law by the office of foreign assets control of U.S. department of the treasury.
Provide any other information that the division determines is necessary and requires by rule or contract with the database provider.
The database provider shall do all the following:
Use the data collected under this section only as prescribed in this section and, in the case of a 3rd-party provider, as prescribed in the contract with the division, and for no other purpose.
Establish and maintain an alternate process for responding to transaction authorization requests necessary because of technical difficulties occurring with the database that prevent a licensee from accessing the database through the Internet.
Upon receiving notification that a payday loan is paid, designate the transaction as closed in the database no later than 11:59 p.m. on the day that such notification is received.
Automatically designate a payday loan as paid in the database 5 days after the maturity date of the loan unless a licensee reports to the database provider before that time that the loan remains open because of the customer's failure to make payment; that the loan is open because the customer's check or an electronic redeposit is in the process of clearing the banking system; that the loan remains open because the customer's check is being returned to the licensee for insufficient funds, a closed account, or a stop payment order; or that any other factors determined by the division are applicable. If a licensee makes such a report, the database provider shall designate the payday loan as an open transaction until the database provider is notified that the transaction is closed.
If a licensee stops making payday loans, designate all open transactions with that licensee as closed in the database 60 days after the date on which the licensee stops making payday loans, unless the licensee reports to the database provider before the expiration of the 60-day period which of its transactions remain open and the specific reason each transaction remains open.
In response to an inquiry from a licensee, state only that a person is eligible or ineligible for a new payday loan and describe the reason for that determination. Only the person seeking the loan may make a direct inquiry to the database provider to request a more detailed explanation of an ineligibility determination.
If at any time the division determines that a licensee that has stopped making payday loans is not updating the database in accordance with a plan approved under par. (o)
, the division shall immediately close or instruct the database provider to immediately close all remaining open transactions of that licensee.
The division may, without cost, access the database for the purposes of enforcing this section.
The division shall, by order or rule, stipulate the period for which data is to be retained in the database only as required to ensure licensee compliance with this section or for enforcement or compliance purposes. The division may require that any identifying customer information be deleted from the database when data is archived. The division may maintain access to archived data for future legislative or policy review.
The division shall, by order or rule, specify a database transaction fee of no more than $1 that the database provider shall charge to licensees to cover the costs of developing and implementing the database, and accessing the database to verify that a customer does not have any payday loans with the licensee or others that in combination with a new transaction will create a violation of this section. The database fee is payable directly to the division in a manner prescribed by the division and, if the department has contracted with a 3rd-party provider to operate the database, the division shall remit the fee to the 3rd-party provider as specified in the contract.
A licensee shall verify a customer's eligibility to enter into a payday loan by doing one of the following, as applicable:
If the database, as determined by the division, is not implemented or is not fully operational, verifying that the customer does not have an open payday loan with the licensee that in conjunction with a new payday loan would cause a violation of this section. The licensee shall maintain a database of all of the licensee's payday loans at all of its places of business and search that database to meet its obligation under this subdivision.