A bill regulating payday and auto title loans wins approval in the state Legislature.
The legislation received a final vote Thursday night in the state Assembly. It creates income limits on the size of loans and allows only one rollover for borrowers. The measure also limits auto title loans to 50-percent of a vehicle’s value.
State Representative Gordon Hintz (D-Oshkosh) says it will help control an industry that’s gone un-checked for too long with no safeguards in place. He says Wisconsin consumers are paying $150 million in fees and interest that goes directly to high cost creditors right now.
The bill has faced a long battle in the Legislature, with the Senate and Assembly debating competing proposals for months. Hintz says the original version passed by the Assembly was stronger. However, he says the compromise will still help to end abuses by the industry. Hintz says lawmakers couldn’t afford to end the session without passing some type of reform.
Consumer groups say the bill still falls short of what’s needed to control the industry, because it doesn’t include a cap on the interest rates lenders can charge. Officials with AARP say many consumers can still fall in to a “debt trap,” even with the protections the legislation provides.
The bill now heads to Governor Doyle, who has said he will sign the measure.
AUDIO: Andrew Beckett reports (1:06)