Agricultural Transactions - Required Disclosures
Written July 3, 1998
You ask the Department for its position under the Wisconsin Consumer Act regarding the newly-created sec. 422.210, Wis. Stats., which sets forth the disclosures required in agricultural transactions.
Under the authority contained in sec. 426.104(4), Wis. Stats., the following practices are approved:
- The scope of sec. 422.210, Stats., is limited to finance charges and fees incurred in connection with the consummation of an agricultural transaction. This section does not require the disclosure of fees, such as UCC filing fees, incurred subsequent to the consummation of the transaction. This interpretation is consistent with sec. 226.20 of Regulation Z under the federal Truth in Lending Act, which imposes subsequent disclosure requirements only in connection with refinancings.
- The requirement for disclosure of finance charges may be satisfied by a disclosure of the interest rate to be paid by the customer on the transaction and an itemization of any prepaid finance charges. A creditor is not required to disclose the total amount of finance charges payable over the term of the transaction. The Wisconsin Consumer Act has never required the disclosure of the total amount of finance charge with respect to agricultural transactions. Such disclosure is required by the federal Truth in Lending Act, which is not applicable to agricultural credit.
- Fees may be described with general terms and need not be further identified by the creditor, as long as the meaning of these terms is "clear," as required by sec. 422.210, Stats. This is consistent with sec. 226.18(c), n. 41 of Regulation Z under the federal Truth in Lending Act. This will permit creditors to aggregate all UCC filing fees and mortgage recording fees in one sum as fees payable to "public officials."
- It is not necessary for creditors to total the fees payable by customers under this section.
- The disclosure of fees and charges does not need to be made in a single document, as long as all of the fees and charges are disclosed in writing and agreed upon by the creditor and customer.