Q&A: Here’s a question that a Wisconsin credit union recently asked The League’s Legal Affairs team, along with our answer. Do you have a compliance question? Contact The League’s Compliance Hotline at (800) 242-0833 or email.
Q. We have a married member applying individually for a loan here in Wisconsin. The couple was married here, and both of them used to live in Wisconsin, but the wife recently took a new job and moved to another state. Does the Wisconsin Marital Property Act require us to collect spousal information? Do we have to send a “tattletale” notice?
A. In this case, Wisconsin’s Marital Property Act (WMPA) does not require the credit union to collect information about the non-borrower spouse or to send a tattletale notice.
Ordinarily, if one spouse applies for “family purpose” credit during marriage, and that credit would be incurred in the interest of the marriage or family, then the credit union must consider all marital property (including both spouse’s income streams) available to satisfy the debt. Failing to do so can result in a fine up to $1,000.
The federal Equal Credit Opportunity Act rules (Reg. B) permit lenders in community property states to request the same information about an applicant’s spouse that may be requested about the applicant. The League’s Wisconsin loan application has spaces for spousal information, and requests classification of assets as marital, individual, or “other.”
In addition, a written “tattletale” notice of an extension of credit ordinarily must be provided to a non-applicant spouse before the first payment is due on any Wisconsin Consumer Act loan.
However, in this situation, the WMPA doesn’t require the credit union to collect information about the non-borrower spouse or to send the tattletale notice. That’s because one of the spouses no longer lives in Wisconsin. The WMPA does not apply when either of the spouses is “domiciled” in another state. Here’s why: The WMPA only covers “family purpose obligations,” and to be a family purpose obligation, the debt has to be incurred “during marriage.” Wis. Stats. §766.55(1). The definition of “during marriage” is technical, but part of the definition is that both spouses must be domiciled in Wisconsin. If someone applies for credit and either the applicant or the other spouse is not domiciled here, the WMPA does not apply.
Since both are not Wisconsin residents at the time of the application, this loan is outside the scope of the WMPA. The fact that they used to live here, or that they were married here, doesn’t matter.
The analysis can be more complicated if the credit union is relying on an asset the couple obtained during marriage while both lived in Wisconsin. In that situation, please contact Legal Affairs for additional guidance.
For details about the WMPA, see The League’s ii Release No. B005.