October 7, 2022

Volume XII, Number 280

Advertisement

October 06, 2022

Subscribe to Latest Legal News and Analysis

October 05, 2022

Subscribe to Latest Legal News and Analysis

October 04, 2022

Subscribe to Latest Legal News and Analysis
Advertisement

New Wisconsin Law Prohibits Claims Based on Oral Credit Agreements

Wisconsin has a new law protecting financial institutions against alleged oral credit agreements. This "New Law" began as Assembly Bill 23 and was signed by the Governor on December 16, 2015 as Act 120.

The financial institutions protected include banks, savings banks, savings and loan associations, credit unions and farm credit institutions. The New Law provides financial institutions and their affiliates with protection against claims that a putative borrower relied on oral offers, promises, agreements or commitments by the financial institution to the borrower's detriment. It also prohibits relief typically sought by borrowers in these types of cases under the doctrine of promissory estoppel.

The New Law provides that no action may be brought against a financial institution or its affiliate with regard to any offers, promises, agreements or commitments of the financial institution or its affiliate, unless the offer, promise, agreement or commitment:

  1. is in writing,

  2. sets forth relevant terms and conditions, and

  3. is signed with an authorized signature by the financial institution or its affiliate and is delivered to the party seeking to enforce such offer, promise, agreement or commitment.

The types of offers, promises, agreements and commitments covered by the New Law are those:

  • to lend money,

  • to grant or extend credit,

  • to renew, extend, modify or permit a delay in repayment or performance of a loan, extension of credit or other financial accommodation, and

  • to make any other financial accommodation.

The New Law encourages discussions between financial institutions and borrowers by reducing the chilling effect that, in the past, could have resulted in lender liability lawsuits. It should significantly limit a putative borrower's ability to make such claims or counterclaims against a financial institution. Note, however, that while the New Law will prohibit such "contract" claims, it will not prohibit common law claims for fraudulent misrepresentation.

The New Law does not apply to any consumer credit transactions subject to Chapters 421 through 427 of the Wisconsin Consumer Act or to the issuance or use of a credit card. 

©2022 von Briesen & Roper, s.cNational Law Review, Volume V, Number 351
Advertisement
Advertisement
Advertisement
Advertisement

About this Author

David Cisar, Von Briesen Roper Law Firm, Finance, Corporate and Real Estate Law Attorney
Attorney

Dave Cisar Co-Chairs the Banking and Commercial Finance Section. He draws on his 35 years of experience to counsel businesses on governance, financing, contracting, real estate, acquisitions and strategic planning.

Dave has a strong focus on the Uniform Commercial Code (“UCC”) and represents financial institutions and businesses in all aspects of commercial finance and other commercial transactions including terms and conditions of sales, commercial loan agreements, inter-creditor agreements, participation agreements, syndicated loans, asset-...

414-287-1224
Brion Winters, von Briesen Roper Law Firm, Milwaukee, Corporate and Finance Law Attorney
Attorney

Brion is a Shareholder at von Briesen with a unique background and skillset that service the diverse needs of his clients.  Brion’s clients come in all shapes and sizes from closely-held businesses, start-up companies and individuals to well-established financial institutions and municipalities. Brion’s commitment to customer service, attention to detail and unending desire to provide value serves his business, banking, developer, municipal and individual clients well.  

In 2008, Brion joined von Briesen from M&I Wealth Management where he...

414-287-1561
Advertisement
Advertisement
Advertisement