43 of 99 Assembly members have signed onto the Milwaukee bill that could cap interest rates at 36%. This is almost enough to pass the bill, but it’s in committee and may not make it out. Committee members are skeptical about the plan.
Assembly Speaker Mike Sheridan (D-Janesville) said recently that the bill to cap lending rates at 36% goes “too far.”
He’s right. You can read more in the Milwaukee Journal Sentinel.
Assembly Speaker Mike Sheridan, in Wisconsin, went on the record to oppose the recent bill to cap payday loans at 36%.
In a pre-fall session recent interview on WisconsinEye, Sheridan also took a controversial position — no! – on the bill of fellow Democratic Rep. Gordon Hintz, of Oshkosh, that would clamp a 36 percent interest rate on payday loans. In remarks that surprised Hintz, Sheridan said the Hintz bill goes “too far.”
It was a public signal to Hintz that he better start looking at other ways to regulate the $700-million-a-year payday loan industry. Although it was the kind of signal that Assembly speakers have given for decades, it was unusually blunt talk from the new speaker.
Check out Payday Pundit for all the breaking news on Wisconsin’s battle.
36% has come to pass in a few states. In Ohio, they’re fighting for their lives with Ohio HB 209.
Wisconsin is doing the 36% dance.
Here are some good comments from New bill confronts payday loan industry:
“This story does not share the argument of payday lenders, who favor reform in Wisconsin. The problem is the 36 percent rate cap, which is a ban of the payday loan product and strips citizens of a needed short-term credit product.” Ryan 458
“Put this kind of business back in the hands of those who know how to get those loans paid – the loan sharks. The loan sharks can charge lower rates since they collect a greater portion of the debts. It make take a beatdown, a missing finger or busted kneecap to ensure that those debtors make their payments, but it’ll be better for them in the long run AND they will learn to be more responsible with their credit!” Anonymous
Just for fun, let’s take a shot a ObamaCare:
“If you “really don’t appreciate big brother making my decisions and dictating” then I don’t think you’ll like Obamacare or much else of the coming Obamanation.” Anonymous
“these are toxic loans, just like those in the disastrous subprime mortgage industry, because they are made knowing that desperate borrowers cannot repay the loans when they become due.”
Do they really think lenders do NOT want to get paid back?
This rediculous comment was brought to you by Legal Aid Society’s litigation director Peter M. Koneazny.
You can read more about Wisconsin and payday loan battles in the WisBusiness.com.
Same story different state. I guess we’ll see what happens.
I thought this was worth sharing:
Payday lenders have seen an explosive growth of 391 percent in Wisconsin over the last ten years, rising to $723 million in loans in 2008 from $147.2 million in 1998.
There’s lots of demand out there. You can read the full article in the Wisconsin State Journal.
If the state and national government are not enough, now payday lenders have the local city counsel to deal with.
The city of Wauwatosa (Wisconsin) has stopped EZ Corp from moving in. A state appelate court is holding up the decision that was made three years ago. In the meantime, EZCorp has 30 days to request the state Supreme Court review the decision.
Wondering what the reasoning was for this decision?
“Residents and city officials spoke out against the proposed store, claiming the business would draw crime to the neighborhood. Many also criticized the high fees and lending practices employed by the quick cash loan industry, calling them predatory.”
I hope Lawrence Myers is reading, so he can rip this town a new one.
You can read the full article here.
If you’re in the payday loan business, you should read this opinion titled “Community Conversation: Payday lenders do a needed service” written by a credit counselor named Kenneth King.
I got a kick out of this statement: “Payday borrowers often are portrayed as victims. I think “victim” is a strong word; a better term might be “maker of poor consumer choices.”
Wisconsin is turning up the heat on payday lenders. Today, Wisconsin, does not set an interest rate cap. Some legislators are talking 36%.
Nothing new here except for this comment:
In 2004, $500 million in loans were made by payday lenders in Wisconsin, with 80 percent of that revenue leaving the state because most of the establishments are owned by out-of-state investors.
I understand their point, but don’t really agree with it.
You can read the full article at HTR News.
Mark Schug is professor emeritus and former director of the Center for Economic Education at UW-Milwaukee. He is a national consultant on economic and financial education. Here is something that really resonated with me:
“Anyone who has taken high school economics should see how this artificial price control would cause problems, but it seems that many have forgotten the lessons of Econ 101. A recent poll found that a large percentage of Americans actually support federal price controls on everything from sports cars to cups of coffee.
What price-control supporters don’t understand is that when a new price level is imposed by legislation, consumers will want more of the product than suppliers can provide. So in the case of short-term loans, the result of a legislative price control will be shortages in the market. At a number as low as 36 percent, those shortages will be severe.”
You can read the full article in the Janesville Gazette.