Regulating earned income access services, providing a penalty, and granting rule-making authority. (FE)

1. Supply certain information to the division, including the addresses of the provider's offices or retail stores in this state and, if the provider provides earned income access services at a location that is not an office or retail store in this state, a brief description of the manner in which the provider provides earned income access services.

2. Notify the division of any material changes in the information supplied to division.

3. File with the division and maintain in force a surety bond or irrevocable letter of credit in the amount of $25,000 for the purpose of protecting consumers or other persons that may be damaged if the provider does not comply with the regulations created in the bill.

4. Conspicuously post the provider's certificate of registration at the provider's physical place of business or, if the provider conducts business on an Internet site, post the provider's registration number on the Internet site.

Under the bill, the division generally must issue a certificate of registration to a provider if the division finds that the character and general fitness and the financial responsibility of the provider warrant the belief that the provider will operate its business in compliance with the regulations created in the bill. The bill requires the division to deny registration if the provider is liable for delinquent taxes or unemployment insurance contributions. A registered provider must pay an annual registration fee.

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.