A state lawmaker wants to restore limits on the payday loan industry.
State Representative Gordon Hintz (D-Oshkosh) says payday lenders are running rampant in Wisconsin, often charging triple-digit interest rates for customers who need to borrow money. He says it’s the result of action nearly 15 years ago that lifted caps on the industry, which has also caused the number of payday lenders in the state to jump from 17 to 542.
Hintz is introducing legislation that would cap interest rates at 36-percent. He says that will protect borrowers from excessive fees and charges they can’t afford. It could also make lenders think twice about giving money to people who can’t pay it back, since they can no longer profit if an individual has to continue borrowing more money to pay off a previous debt.
Hintz says the way the industry currently works locks individuals in a never ending cycle of debt, where the money they owe exceeds their income. He says it’s a busienss model that helps the industry make billions of dollars, while keeping low-income residents from making any progress.
The payday lending industry has opposed previous reform efforts.
