Wisconsin Consumer Act Interpretive Opinion

​Deferral Fees

When a creditor agrees to allow a borrower to skip a payment the creditor may or may not be able to assess a deferral charge depending on the type of transaction involved. Please note the disclosures that are required on a deferral agreement as set forth at Wis. Stat. s. 422.204(7).

​Precomputed Transactions​​

In precomputed transactions, Wis. Stat. s. 422.204, allows the assessment of deferral charges. The amount of the deferral charge that may be assessed under this section, however, is simply the amount of additional interest that would automatically accrue in a simple interest transaction when a payment is skipped. Upon prepayment in full any deferral charges are refundable pursuant to Wis. Stat. s.​ 422.209(4).

​Simple Interest Transactions – Closed-End Credit

​In simple interest transactions no additional charge is permitted for a deferral. The creditor will, however, receive an additional amount of interest than what was expected because by skipping a payment interest will accrue on a principal amount that is larger than scheduled. This additional interest that automatically accrues with simple interest transactions equals the deferral charge allowed with precomputed transactions.

Simple Interest Transactions - Open-End Credit

Deferral charges are allowed.

Motor Vehicle Leases

Deferral charges are allowed.

Wisconsin Consumer Act Interpretive Opinion - Deferral Fees, July 8, 1998