Wisconsin Gets its New Payday Loan Law
Governor Uses His Veto Ban to Strengthen Bill at Signing
by Jonah Huang, age 19
We at the Simpson Street Free Press have been following the payday lending issue for some time. Payday lending services are knows to take advantage of the customers and often force people into a cycle of accumulating debt.
Recently, however, Governor Jim Doyle has signed a bill that significantly weakens predatory lending in Wisconsin. Previously, lenders were able to force borrowers into putting up their cars as collateral. Using his veto powers, Governor Doyle has now banned that practice.
The governor used the veto pen to beef up the bill in several other ways. The new law removes accumulating interest from unresolved loans after their due date. It also gives the state Department of Financial Institutions regulatory powers over the lending industry, limits where and how many lending services can locate, and caps the maximum amount of money a person can borrow: either $1,500 or 35 percent of the borrower’s monthly income.
Until this bill, Wisconsin was one of the few states that had not enacted measures to restrict questionable payday lending practices. The new law takes effect in December 2010.
[Sources; madison.com; Milwaukee Journal Sentinel]