The Supreme Court in Wisconsin may throw a wrench in the Wisconsin payday loan business. The Associated Press reports “Wis. judges ask Supreme Court to take loan case.”
Here is the borrowers side:
Consumer: Mount filed a counterclaim alleging the loans violated the Wisconsin Consumer Act because the interest rates were unconscionable. La Crosse County Circuit Judge Ramona Gonzalez agreed with Mount and granted her summary judgment.
Here is the Lenders side:
Payday Loan Store of Wisconsin: The loan company contends on appeal that a judge can’t find a particular interest rate is unconscionable because the consumer act expressly permits any rate or charge. The company goes on to argue that the Legislature, not judges, should determine what interest rates are too high. If judges start making those decisions, their rulings will vary and lenders won’t know what interest rates are acceptable, the company maintains.
Currently, there is a new law on the books that took effect on January 1, 2011. The above case stems from a 2009 case that has made its way up to the Wisconsin Supreme Court. The industry is at stake here b/c we’ve managed to promote laws that are diplomatic between borrower and lender through the legislative process. If this ruling goes bad, it would erase all the lobbying for the payday loan industry in Wisconsin.
