The state Assembly on Tuesday night approved legislation regulating the payday loan industry.
The bill would cap the size of loans at $600, prohibits rollovers, and stops borrowers from taking out more than one loan at a time. It also bans auto title loans.
State Representative Donna Seidel (D-Wausau) says the legislation should send a strong message to payday lenders that their days of predatory lending are over in the state. She says it will help end the days of Wisconsin being considered the “Wild West” of payday lending.
Assembly Republican Leader Jeff Fitzgerald (R-Horicon) says the bill removes an option of last resort for families facing tough times. He says the timing is horrible, since unemployment is climbing and many residents will have difficulty borrowing money anywhere else. Fitzgerald says those who borrow from payday lenders know it’s not the best deal, but it’s often the only place they can go to get money.
Lawmakers rejected a proposed amendment that would have capped interest rates on loans at 36-percent. State Representative Andy Jorgensen (D-Fort Atkinson) says stopping borrowers from rolling over their loans will still help end the cycle of debt created by the industry.
The bill now heads to the Senate, where another version has been introduced that does include a cap on interest rates.
AUDIO: Andrew Beckett reports (1:08)