By Scott Birrenkott, WBA director – legal
Scott Birrenkott
While there have been no changes to Wisconsin’s right to cure provisions under the Wisconsin Consumer Act (WCA), recent litigation makes this a good time to provide a reminder of those requirements. In summary, the WCA requires specific notice and procedures before a bank may act against a covered loan in default. This article will provide a summary of those requirements, as well as recap recent litigation in this area, including preemption and the interplay between Uniform Commercial Code (UCC) notices and the WCA.
The WCA governs consumer loans and credit sales made primarily for personal, family, or household purposes where the amount financed is $25,000 or less and the loan is not secured by a first lien or first lien equivalent real estate mortgage. Note that the $25,000 threshold will increase to $50,000 as of January 1, 2027. See the March 2026 “WBA Compliance Journal” for more information.
Default for purposes of the WCA is defined as a loan with an outstanding amount greater than one full payment, which remains unpaid for more than 10 days, if the interval between scheduled payments is two months or less. It also includes a failure to pay the first payment or the last payment, within 40 days of its scheduled or deferred due date. For loans where an interval between scheduled payments is more than two months, default is defined when all or any part of one scheduled payment remains unpaid for more than 60 days after its scheduled or deferred due date. Or, if the transaction is scheduled to be repaid in a single payment, to have all or any part of the payment unpaid for more than 40 days after its scheduled or deferred due date. The amount outstanding shall not include any delinquency or deferral charges and shall be computed by applying each payment first to the installment most delinquent and then to subsequent installments in the order they come due.
Generally speaking, before a lender may take any action on the default, it must provide the customer a written notice of right to cure default. The specific notice must include the creditor’s name, address, and telephone number, a brief identification of the account, the nature of the alleged default, the total amount required to cure, with itemization of any delinquency charges, the exact date by which cure must occur, and contact information for where payment must be made. Notice is deemed given on the date of mailing.
Following notice, the customer has 15 days to cure the default by paying all past due installments plus any applicable charges. Curing the default restores the account to good standing as if no default occurred. Because a customer mailing payment on the fifteenth day satisfies the cure requirement, lenders should wait a reasonable period beyond the 15-day window before proceeding.
The WCA’s right to cure requirements are well-established, but recent litigation in this area is worth including with this reminder. In Bank of America, N.A. v. Jean-Pierre Riffard, the Wisconsin Court of Appeals concluded that the National Bank Act (NBA) does not preempt the WCA’s notice of right to cure default requirements. In this case, Bank of America filed small claims actions to collect on two defaulted credit card accounts, without first providing a WCA notice of right to cure. The borrower argued the complaints were barred as a result. The circuit court ruled in the bank’s favor, concluding that the NBA preempts the WCA. The Court of Appeals reversed this decision, instead finding that the WCA applied. The decision means that nationally-chartered banks operating in Wisconsin must ensure they comply with the WCA notice requirements for covered consumer credit transactions, regardless of their federal charter. See the April 2025
“WBA Compliance Journal” for more information.
In a separate matter, the Court of Appeals addressed a WCA right to cure issue in Birges v. Simplicity Credit Union. There, a borrower challenged a credit union’s pre- and post-sale
repossession notices (a UCC requirement which provides model language), arguing they were legally insufficient because they did not incorporate the WCA’s fair market value standard for calculating deficiencies. The Court disagreed, affirming that the UCC’s statutory safe-harbor notice language is legally sufficient on its own, and that the WCA’s deficiency judgment provision does not alter or supplement the UCC’s notice requirements. This case upheld longstanding understanding and practices regarding use of the UCC model notice and language and its interplay with the WCA. See the October 2025 “WBA Compliance Journal” for more information.
In conclusion, while there has been no change to the WCA or UCC in terms of right to cure requirements, recent litigation serves as a good reminder for banks to ensure they are properly meeting right to cure notice requirements for covered loans, reviewing policies and procedures, and utilizing model language where appropriate.
