Wisconsin Senate Bill 773 (2023 Wisconsin Act 128), published on March 22, 2024, includes the repeal of statutes related to state disclosure requirements for adverse action notices, transfer of servicing notices, and variable rate loans. The Act was effective the day after publication, on March 23, 2024, with the exception of certain administrative rules which are generally effective on the first day of the month following publication.
Section 4 of the Act repealed Wis. Stat. Ann. § 138.052 (7e), which added the state requirement for both adverse action notices and transfer of servicing notices. Under Wis. Stat. Ann. § 138.052(7e)(a), a bank, credit union, savings bank, savings and loan association, mortgage banker, or any other lender that received an application was required to provide an adverse action notice when applicable. Wis. Stat. Ann. §138.052(7e)(b) required a lender to provide a transfer of servicing notice to a borrower when the servicing of a loan was transferred. Though the state requirements are repealed, both an adverse action notice and notice of servicing transfer are still required under federal law. DocMagic does not provide separate state specific versions of the adverse action notice or transfer of servicing notice, as the requirements for both are met by the applicable federal disclosures. Therefore, we will not be making any changes based on the repeal of Wis. Stat. Ann. § 138.052 (7e).
DocMagic does provide the Wisconsin Variable Rate Loan Disclosure (Form ID: WIVRLD.MSC) which states the index being used in a variable rate loan and a borrower’s prepayment rights upon receiving a notice of change in the interest rate. Section 6 of the Act repealed Wis. Stat. Ann. § 138.056(6), which was the basis for this disclosure. DocMagic will be removing this form from Wisconsin initial, pre-closing and closing packages beginning on April 11, 2024. The federal Adjustable-Rate Disclosure (Form ID: ARM.DSC) will continue to be provided in initial and closing packages as applicable for variable rate loans. It should also be noted that the Act did not change the requirements of Wis. Stat. Ann. §138.056(3m), which requires a separate disclosure regarding prepayment penalties for variable rate loans. A lender is required to advise a borrower that variable rate loans without prepayment penalties are also available. DocMagic will continue to provide the Wisconsin Variable Rate Loan Prepayment Penalty Disclosure (Form ID: WIVRLPPD.MSC) in initial, pre-closing and closing packages as applicable without change.
