Wisconsin Governor Jim Doyle took up the pen to reign in payday lending in the state. Image from Wikimedia Commons.
After deliberations of some time, Wisconsin Governor Jim Doyle signed the bill that put further regulations on payday lending in Wisconsin. There are a bevy of new rules regarding Wisconsin payday lenders, but most significant is the outlawing of title loans in the state. The bill also contained regulatory statutes for other industries, including dairy products and medical transcriptions. Wisconsin joins the ranks of states regulating the payday loan industry, though the regulations aren’t as stringent as other states.
Doyle finally signs Wisconsin payday loan bill
Governor Jim Doyle of Wisconsin has had a bill on his desk awaiting the pen for some time — the bill that concerns payday lenders in his state. He finally signed it, though used the power of partial veto in order to make some changes he felt were needed to the new payday loan law, according to CNBC. Among the new rules are, according to the BusinessNorth:
- Loans capped at whichever is the least of $1,500 or 35 percent of monthly income
- No more than one rollover
- Database established to prevent borrowing from multiple lenders
- No lenders within 1,500 feet of each other or 150 feet of certain residential zones
Title loans outlawed
Part of the bill was a ban on car title lending, which is when a lender gives a loan and holds the borrower’s car title as collateral. The law concerning payday lending in Wisconsin and title loans was passed along with a new budget, which cut expenditures to keep the state afloat. Though Wisconsin has a nearly $7 billion budget shortfall, taxes were actually cut and $800 million was cut from Medicare alone. Wisconsin also experienced a drop in its unemployment rate, down to 8.6 percent. Doyle’s use of a “partial veto” is considered somewhat controversial, as it allows the governor to make alterations to laws he wishes to make, without legislative approval.
Other rules and regulations
Along with the regulations on payday lenders and title lenders, Governor Doyle also vetoed a bill that would have allowed farmers producing raw milk to sell directly to consumers. He also passed the Wired for Health Act, which allows health care providers to share electronic patient information to prevent duplicate tests and thus lower health costs.
I think that doing this violate our rights we should be able to take out many loans as we like longest as we pay them back what else is he going to controll
I totally agree Lisa. The problem is that some people borrow the money then file bankrupt which is not illegal. I do however question the morals of someone who can do such a thing. Especially when the reson they take the loan is to have the funds to file bankrupt.
What do you do if you currently have a title loan?
The best thing to do is to pay it off, or work out an arrangement with your lender as best you can. Payday lending regulation sometimes, but not always, does not cover title lending, so you'll have to look into Wisconsin's laws on the matter. Start with the Wisconsin Department of Financial Institutions, the website for which is at: http://www.wdfi.org/
i do plan on paying my car title loan monies i borrowed but i refuse to pay the interest because they failed to let me know that i couldn't make just the payment,they expected me to pay the whole payment.
Same here. They told me they weren't accepting payments but that I would have to pay the whole thing off within a week. I'm on disability and that was not an option so I told him to come get the car since the loan was way over the value and my credit is crap anyway. They told me to wait for a letter in the mail which never came and I live in Wisconsin where the laws just changed last year so people tell me that they can't even repo my car any more since it became illegal to do title loans here. With a disconnected number and an office that's never open, are they just tucking their head between their legs? It's been almost 6 months now since I last spoke to them.
What about the crazy interest on these payday loans? A place in our town charges 571%…isn't that crazy? How about 40%….then they wouldn't have a client base.
The thing about the interest is that it's misleading. A payday loan can carry 571% interest if it's calculated as APR, or as an Annualized Percent Rate, instead of simple interest – the difference is that simple interest is a ratio of total paid to the principal, and APR takes the any interest assessed and extrapolates it to an annual rate.
The hitch, of course, is that the fee for a payday loan is not compounding interest, like on a car loan or a mortgage. So the "interest rate" is very misleading when given as APR, which is funny because the fees on a loan that matures in two weeks can hardly be called annualized interest, by any stretch of the imagination.
I work for a payday loan store in West Allis. I can tell you firsthand that these rates are not 'misleading'. We often perform what is called a "fake buyback" in order to induce customers into continually rolling over their loans. By only paying interest and not paying off the loan's principal amount many of these 'loans' are continually 'rolled over' for periods spanning one, two, and in some cases three or more years! That actually makes the interest rate well over the 571% mark cited in an earlier comment.
I don't have no problem doing this as it makes my boss happy to make money.
I can't wait for Advance America to leave wisconsin.
This new law will protect consumers from dishonest and crooked companies like Advance America and their unethical practices which inclule usury and improper sexual activity such as Advance America Divisional Director of Operations, Paul Wright sleeping with employees Kayla Jean Miller and Dani Henderson in exchange for professional favors. I can't wait for payday lending to leave wisconsin!! These companies and their employees are the scum of the Earth!!! The facts speak for themselves.
there we go again