Tag Archives: payday loans

WCCC Testimony in Favor of Special Session Assembly Bill 14

By Marvin Walker
WCCC Board Chair
May 3, 2011

As a Milwaukee resident, Wisconsin consumer, and Board Chair of the Wisconsin Coalition for Consumer Choice, I believe the Telecom Modernization bill (SSAB 14 / SSSB 13 is in the interest of Wisconsin consumers. The legislation will create more competition by providing consumers more choices, and greater product innovation while maintaining strong consumer protections at no additional cost to Wisconsin consumers.

The Wisconsin Coalition for Consumer Choice (WCCC) advocates on behalf of more than 16,000 citizens and community-based organizations throughoutWisconsin.  We are committed to defending and protectingWisconsinconsumer choices.

The telecom modernization bill will benefit Wisconsin consumers by giving them greater choices. Passage of telecom modernization would allow multiple providers to enter the marketplace giving our supporters more choices in service and product offerings. Those choices will ensure our supporters pay fair market value for services, and will also create a competitive marketplace which will create incentives for providing better services to consumers.

The bill also makes it easier for new providers to enter the marketplace with the creation of a statewide certification process for new competitors.

This bill enhances Wisconsin consumer protections that Wisconsin consumers rightfully deserve. Currently, the Wisconsin Public Service Commission receives all land-line telephone complaints. This bill moves the complaints to the Department of Agriculture, Trade and Consumer Protection, who handles complaints of cell-phone providers and many other services Wisconsin consumers utilize.

The bill also maintains Lifeline Service and Wisconsin’s “Do Not Call List”. Service in rural areas ofWisconsinwill continue for its current customers because of federal requirements to provide local service if a telephone company is receiving government support, which rural providers heavily depend on.

A recent study by the National Centerfor Health Statistics showed that in July 2009 only 15 percent of Wisconsin households relied solely on cell-phones. In just one year, the number of households inWisconsinrelying solely on cell-phones has risen to 25 percent. Telephone companies aren’t abandoning consumers; consumers are making a choice that best fits their needs.

We believe this Special Session Assembly Bill 14/ Special Session Senate Bill 13  is good for consumers because it provides more competition, more choices and maintains strong consumer protections with no fees or taxes passed on to Wisconsin consumers.

GOP proposal would cap interest on payday loans

By The Associated Press
April 27,2011

Interest rates on payday loans would be capped at 36% under a proposal Republicans are circulating in the Wisconsin Legislature.

New regulations on the payday lending industry took effect in December, but the previous Legislature controlled by Democrats rejected a cap on interest. Consumer advocates who supported tighter regulations on the industry had pushed for the interest rate cap, saying it was needed to prevent borrowers from getting socked with interest as high as 500% or more.

The new law limits the size of the loans and bars auto title loans.

Rep. Evan Wynn of Whitewater and Sen. Glenn Grothman of West Bend are proposing the interest rate cap. They are seeking co-sponsors of the proposal until May 12.

Payday lender monitoring system now in place

By Shamane Mills
Superior Telegram
March 30,2011

A Wisconsin database overseeing all payday lenders is now up and running. It’s how regulators will make sure quick-loan companies are complying with a law that took effect Jan. 1.

The database operated by the Division of Banking will record every payday loan transaction. That way, regulators can track the number of times a loan is rolled over and whether customers are taking out loans they can’t afford; the new law says customers can be liable for no more than 35 percent of their monthly income.

Bob Andersen is with Legal Action of Wisconsin; the organization helps low income people with legal matters in 39 counties. He says the state database will shine some light on an industry that has more than 500 locations around Wisconsin and made $1.6 million of loans last year. Andersen says “unfortunately, we know from experience in other states that payday loan organizations have found ways to circumvent the law. That’s what we’re looking for (through this database) we’re hoping this works.”

The new regulations on payday lenders do not cap interest rates but if that or other practices pose undue burdens for customers, Andersen says the database information will bear that out. He says “for the first time it actually collects information on what’s actually taking place out there and that will be the basis for people to decide are there some other things that should be done as far as regulation.”

The law on payday lenders prevents vehicles being used as collateral and loans must be at least 90 days long. The disclosure agreement has to be in both English and Spanish.

Payday loan limits still undefined

By Patrick Marley
Milwaukee Journal Sentinel
January 19, 2011

Eight months after the Legislature restricted payday loans, state officials have yet to agree who is covered by the law, a situation that critics say could lead to loopholes allowing lenders to escape the regulations.

A legislative committee on Wednesday told the Department of Financial Institutions to rewrite proposed administrative rules governing the new law over concerns the standards include lenders that weren’t meant to fall under the law. Lawmakers said those that make installment loans and some other types of short-term loans were not intended to be subjected to the law governing payday loans.

The new law limits payday loans to a maximum of $1,500; prevents loans from being renewed more than once; bans loans secured by vehicle titles; and restricts where payday lenders can locate. Until the new law, Wisconsin was the only state that did not regulate the loans, which are typically good for two to four weeks with 500% or more in annualized interest charges.

The new restrictions took effect Jan. 1, but the law can’t be fully implemented until administrative rules are adopted.

Opponents of the industry say the rules are crucial because loopholes could be inserted that would allow lenders to continue practices they say trap poor people in debt.

“It doesn’t do us any good if we outlaw or restrict one type of loan only to see it morph into some other product with no restrictions,” said Rep. Gordon Hintz (D-Oshkosh), one of the authors of the payday loan law.

Peter Koneazny, litigation director for the Legal Aid Society of Milwaukee, said he feared the rewritten rules could allow lenders to make auto title loans despite the ban, which was put into place last year when then-Gov. Jim Doyle toughened the law with his partial veto powers.

But Republicans said Democrats should have written a bill with clearer restrictions and questioned how much resolve they had to rein in such lending.

“If this is such an easy fix that could have been done, why wasn’t it done in the beginning? That’s the nagging question,” said Sen. Leah Vukmir (R-Wauwatosa), co-chairwoman of the Joint Committee for Review of Administrative Rules.

Rep. Jim Ott (R-Mequon), the other co-chairman, said he wanted to see the intended regulations put in place.

“I voted for the bill,” he said. “I don’t want to see it gutted.”

The committee asked the administration to limit the changes it makes to the proposed rules, but the Department of Financial Institutions can make any changes it wants.

The proposed rules were written last year by Doyle’s administration. The department now is controlled by Republican Gov. Scott Walker, who has said the new law goes too far.

Sen. Glenn Grothman (R-West Bend), an opponent of payday loans, voted in committee to send the rules back to the department but said he is concerned that they could be watered down because of pressure from lobbyists who tried to stop the bill in the last session.

“I don’t think the new people themselves (at the Department of Financial Institutions) know exactly what they want to happen, but the people in the room know what they want to happen,” Grothman said, referring to the lobbyists who packed a Capitol hearing room.

The committee is expected to take up the reworked rules by the end of February.

With Republicans controlling both houses of the Legislature, the industry has indicated it wants to loosen the regulations.

Democrats ran the Legislature when the law was passed, but they had a tough time reaching consensus and were unable to approve a tougher bill that would have capped interest rates at 36% a year.

Democrats could have finalized the rules late last year, but instead left them for Republicans to handle.

The new law limits loans to $1,500 or 35% of monthly income, whichever is less. Lenders can charge any amount in interest, but interest stops accruing once the loans come due.

Borrowers can renew their loans just once – a change that supporters said was crucial to stopping people from repeatedly rolling over their loans and getting trapped in debt.

The law also bars stores from locating within 1,500 feet of one another and 150 feet of residential areas.

New federal oversight bureau to crack down on payday lenders

By Jessica Machetta
November 23, 2010

Payday loan industry hopes state will loosen rules

By Patrick Marley
November 13, 2010

Auto title loan ban expected to affect local businesses

By Gazette Staff and Associated Press
May 22, 2010