Last year, Wisconsin became the final state in the union to regulate payday and title lending. The original bill could have prohibited banning vehicle title lending, but the governor vetoed that item to get rid of title lending. Now, a joint committee is taking action to end the ban on title lending, which would de-regulate the industry.
Regulation on payday loans in Wisconsin
Currently in Wisconsin State, short-term loans secured by an auto title are not legal. The selective vetoing of the 2010 legislation banned loans of this type. In Wisconsin State, the borrower’s monthly income must be much more than the cash advance. The loan can only be up to 35 percent of this monthly income. No extra interest can be charged when the loan is due, even with late payments. There are 529 short-term lender locations in Wisconsin. They lent out $600.5 million in 2009.
Changes wanted by Wisconsin Republicans
Righter payday loan regulation is something the U.S. Senate President wants. Mike Ellis, the president, is a Republican. Despite 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. Last year the governor vetoed so several times that it shaped the bill, which co-chairman Rep. Robin Vos commented on. He said, “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.”
Not getting the same service with payday lending and title lending
Short-term financial solutions usually contain more than check cashing and payday lending. Typically title lending is also integrated in it. These financial products all cater to the under banked community, however they each do so differently. Payday loans are short-term loans intended to be paid back in two to four weeks. Collateral such as a vehicle is at risk with title lending since it offers high loan amounts. Check-cashing services charge a fee for cashing checks for consumers. All of these are different services. They need separate regulation.
Information from
WTAQ
wtaq.com/news/articles/2011/may/13/jfc-approves-measures-including-auto-title-loans/
JS Online
jsonline.com/news/statepolitics/121731299.html
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