In 2010, Wisconsin State became the last state in the United States to regulate the payday lending and title lending industries. Auto title lending was only banned when the governor line-item-vetoed a bill meant to regulate the industry. Now, a joint committee is taking action to end the ban on title lending, which would de-regulate the industry.
Current regulations on Wisconsin's payday lending industry
Short term installment loans for auto titles are not legal in Wisconsin right now. The selective vetoing of the 2010 legislation banned loans of this type. All payday loans can't exceed 35 percent of the monthly income of the borrower in Wisconsin either. Even if there are late payments, no additional interest can be charged. This is when the loan is due. There are 529 short-term lender locations in Wisconsin State. They lent out $600.5 million in 2009.
Wisconsin State Republicans tries to rescind changes
This year, Senate President Mike Ellis has been pushing to get tighter cash advance regulation. Regardless of his surprise at the recommendation of the Joint Finance Committee, Ellis agrees that the recommendations should be debated on the merits, instead of as a knee-jerk response. Rep. Robin Vos said, as the committees co-chairman, "You can make a case that it was done wrongly the first time. We're correcting his error and actually adding some better provisions in," while talking about the fact that the governor's vetoes changed the bill last year.
Not getting the same service with payday lending and title lending
Title lending and payday lending are often lumped in with check cashing and other short-term financial solutions. These financial products all cater to the under banked community, but they each do so differently. Most payday loans have to be paid back in two to four weeks. They're short-term loans. Title lending, on the other hand, offers higher loan amounts, however puts the collateral, a car, at risk. For cashing checks for customers, a fee is charged for check-cashing services. All of these are different services. They need separate regulation.
Information from
WTAQ
http://
http://wtaq.com/news/articles/2011/may/13/jfc-approves-measures-including-auto-title-loans/
JS Online
http://
http://jsonline.com/news/statepolitics/121731299.html
