Public urges lawmakers to impose stricter limits on payday loans

At a public hearing in West Allis today, citizens called on lawmakers to impose stricter regulations on the payday loan industry than what has been proposed so far.
Neither the Senate bill under consideration today or the Assembly bill, which was approved by that chamber earlier this year, includes a cap on the interest rates lenders can charge.
The bills do include limits on the size of payday loans and other restrictions, but citizens testifying before the Senate Committee on Veterans and Military Affairs, Biotechnology, and Financial Institutions this afternoon called those bills inadequate.
“If there is not a cap, it won’t solve the problem of the people who take out these loans,” said Nancy Holmlund of Racine, president of WISDOM, a faith-based social services organization.
Representatives of the Legal Aid Society of Milwaukee said a cap of 36 percent on interest rates would make loans affordable. They cited the case of a client who had sought a loan to pay a $500 security deposit on rent. The man and his wife were offered $460 at 360 percent interest. After paying between $140 and $150 a month for the past 10 months, they have paid $1,500 in interest, but nothing toward the principal.
The man, who was at the hearing, said, “We can’t get out of it. The last time my wife went to make a payment, she expected to pay $140 and was told she needed to pay $160 because there was a $20 rollover fee. We’re between a rock and a hard place.”
Sen. Joe Leibham (R-Sheboygan), a member of the committee, said he’s heard extensive criticism that both bills have too many loopholes.
“The challenge for us today is, if we’re going to do something, let’s really do something and not pull the wool over the citizens of Wisconsin’s eyes,” Leibham said.
– WisPolitics.com