Payday loan industry hopes state will loosen rules

Madison - With Republicans about to take control of the Legislature and governor's office, payday loan stores and auto title lenders are looking to roll back limits recently placed on short-term loans.

Democrats passed a bill this year that limits payday loans to a maximum of $1,500. Democratic Gov. Jim Doyle toughened the bill, using his partial veto powers to ban loans secured by vehicle titles.

Until the Legislature acted, Wisconsin was the only state that did not regulate payday loans and auto title loans. The loans are typically good for two to four weeks but can be repeatedly rolled over. When they are, they can cost borrowers 500% or more in interest a year.

The restrictions on payday loans take effect Jan. 1 but may not last long. Republicans took over both houses of the Legislature and the governor's office in the Nov. 2 elections, and in the past they have viewed the industry more favorably than Democrats.

Erin Krueger, a lobbyist for the lenders, said they hope to eliminate "anti-business and anti-consumer choice" provisions in the new law. She did not detail the specific changes they want to make.

"Everything's on the table in terms of what we're going to discuss," she said.

Krueger said her group, the Wisconsin Deferred Deposit Association, would try to pursue the changes either with a bill or as part of the state budget process. Budget provisions tend to get less scrutiny than bills, and can be passed without lawmakers having to identify who wrote them.

Rep. Gordon Hintz (D-Oshkosh), one of the authors of the new law, said he would fight changes but expected difficulties because Republicans will run the Legislature.

"There's a new leadership and they can do what they want, but there's also accountability," Hintz said. "If this is part of their jobs effort, I think that's pretty sad. . . . I'll be there to shine the light every step of the way."

Governor-elect Scott Walker said during the campaign that changes to the law are warranted.

"An outright ban of title loans was never the intent of the legislation and the law needs to be clarified," Walker said in a statement during the campaign.

Jim Smith, a lobbyist for Select Management Resources, said changing the new law could be difficult because some Republicans oppose the industry. That could make it difficult to include in the budget, he said.

"I think there will be an attempt to move it, but I don't think it will move as quickly as things all Republicans agree on," Smith said.

Select Management Resources has about a dozen Wisconsin vehicle title loan stores under the name Loan Max.

Other lobbyists for the industry declined comment or did not return phone calls.

Read more at the news source: jsonline.com

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