Senate passes bill limiting payday loans


Through Patrick Marley and Jason Stein of Sentinel Journal

Madison – The Senate passed a bill on Tuesday to curb payday lending, but left auto title lending unregulated.

A key state official said the Assembly may not accept the Senate’s plan because it does not include auto title lending, but said the two chambers could reach an agreement before the end of the ordinary legislative session next week.

Wisconsin is the only state that does not regulate payday loans, and it will remain so if lawmakers do not agree on a bill.

Defenders of the poor said the Senate measure was so weak the state had better pass nothing. These groups wanted lawmakers to cap interest rates at 36% per annum, but that effort failed with a 21-12 vote.

Payday lenders typically offer two week loans. If renewed multiple times, loans cost borrowers 500% or more annual interest.

Senator Jim Sullivan’s (D-Wauwatosa) bill would limit loans to $ 1,500 or 35% of monthly income, whichever is less. Borrowers could only renew their loan once. Critics say loan renewals trap borrowers in a cycle of debt because they have to pay high interest charges every two weeks without cutting off the principal.

Sullivan’s bill would also prohibit payday loan stores from locating within 1,500 feet of each other or 150 feet from residential areas. He passed, 21-12, with three Republicans joining the 18 Democrats.

Sullivan said the bill protects consumers while still giving them access to a credit “lifeline” in the event of an emergency.

“We didn’t want to fall with the government’s heavy hand,” he said.

The Senate bill differs from a measure passed by the Assembly in February that would ban vehicle title loans, rollovers and limit loans to $ 600 or 35% of bi-weekly income, whichever is less. .

Representative Gordon Hintz (D-Oshkosh), who helped draft the Assembly bill, said his house may not follow the Senate’s plan as payday lenders could quickly turn into lenders of vehicle titles and continue to treat consumers badly.

“There is no reason to allow an existing loophole and pass it and say it’s reform when it isn’t,” Hintz said ahead of the Senate vote.

After the vote, he said he hoped the two chambers could come to a compromise before the end of the legislative session on April 22.

Both houses are controlled by Democrats, and Democratic Governor Jim Doyle has urged lawmakers to pass a bill regulating the industry.

A bipartisan group of senators called for a 36% interest rate cap on payday lenders, saying it was the only way to end the abuse. The effort largely failed, as in the Assembly in February.

“I don’t care if you’re a liberal, a conservative, a Democrat, a Republican – it’s not fair to the people,” said Sen. Mike Ellis (R-Neenah). “It’s a scam … I thought we got rid of the loan sharks by putting Al Capone in the shelter.”

Six senators who signed a bill last year to cap the interest rates of payday lenders changed their stance and voted against the rate cap on Tuesday. It was about the Senses. Dave Hansen (D-Green Bay), Bob Jauch (D-Poplar), John Lehman (D-Racine), Mark Miller (D-Monona), Lena Taylor (D-Milwaukee) and Bob Wirch (D- nice meadow).

The industry is fighting regulation on many fronts, spending $ 669,000 on lobbying last year in Wisconsin. Industry representatives spent nearly $ 75,000 on political campaigns in Wisconsin last year, a record for a year without an election.

Election expenses: Also on Tuesday, the Senate approved, in a voice vote, allowing companies to spend freely to influence the election, but asked them to disclose their spending and check with shareholders first.

The bill, which is now going to the assembly, would overturn a century-old state ban on corporate spending to elect or defeat political candidates.

This ban, which dates back to 1905, was effectively overturned in January by a United States Supreme Court ruling that overturned federal restrictions on companies spending directly on behalf of or against candidates for federal office. The State Government Accountability Board voted last month to stop enforcing state law because of the decision.

Before corporations or co-ops can spend money to support or defeat an election candidate, they would be required to notify state election officials that a majority of shareholders have voted to approve election expenses, in the measurement framework.

Successors: The Senate on Tuesday agreed to a voice vote on a bill that would allow the appointment of new lawmakers in an emergency that leaves nine or more seats vacant in the 33-member Senate or 25 or more in the 99-member Assembly.

According to the bill, the replacements would be chosen by the leader of the same house and political party of the legislator who is no longer able to sit.

About Patrick Marley

Patrick Marley covers state government and state politics. He is the author, with Sentinel Journalist Jason Stein, of “More Than They Bargained For: Scott Walker, Unions and the Fight for Wisconsin”.

Thumbnail of Jason Stein
About Jason Stein

Jason Stein covers the State Capitol and is the author with his colleague Patrick Marley of “More than They Bargained For: Scott Walker, Unions and the Fight for Wisconsin”. His work has been recognized by journalism groups such as the American Society of News Editors, the Society of American Business Editors and Writers, and the Association of Capitol Reporters and Editors.

Leave A Reply

Your email address will not be published.