Wisconsin Consumer Act: Open-End Credit Plan
You may use the information and forms on this website as a guideline for establishing an open-end credit plan under the Wisconsin Consumer Act ("WCA"). Open-end credit is a line of credit that can be used over and over again, examples include credit cards, revolving accounts, and home equity lines of credit. In an open-end credit plan: l) the creditor permits the customer to make purchases from time to time as the plan provides; 2) the customer may pay the balance in full or in installments; and 3) a finance change may be computed on the outstanding unpaid balance.
A finance charge cannot be assessed on a consumer account unless there is a written agreement between the creditor and the customer permitting the charge. The agreement and all billing statements sent to the customer by the creditor must include all of the required disclosures.
To be liable for payment under an open-end credit plan, the customer must sign one of the following:
- An open-end credit agreement setting forth all of the terms of the credit plan; or,
- A credit application which expressly states that each person signing the application will be obligated according to the terms of the open-end credit plan, provided each person signing the application will receive an exact copy of the open-end credit agreement before any charges are made on the account; or,
- A transaction receipt which expressly states that each person signing the receipt will be obligated according to the terms of the open-end credit agreement, provided the customer receives an exact copy of the open-end credit agreement before making any charges on the account.
There is no interest rate limitation in Wisconsin for open-end credit transactions. There is also no limitation on the type of fees or the amount of those fees that can be assessed by agreement in an open-end credit transaction. Examples of such fees would be late fees, membership fees, NSF fees and charges for exceeding the credit limit.
Providers of consumer credit subject to the WCA are responsible for ensuring that all forms, notes and disclosures are in full compliance with Wisconsin and federal laws prior to extending credit to Wisconsin consumers. Department of Financial Institutions approval of credit forms is not required. However, if you would like to submit your forms to be reviewed for compliance with the WCA, please click here: Forms Review under the WCA. The enclosed guidelines have been created to be used only as a reference in developing your forms. Because the drafting of legal forms is a complex matter, you are strongly encouraged to seek legal counsel in preparing your forms.
Note: If you offer consumer credit in Wisconsin, you must Register Under the WCA.