Wisconsin Republicans attempting to re-legalize auto title loans

In 2010, Wisconsin became the last state in the United States to regulate the payday lending and title lending industries. The original bill might have prohibited banning car title lending, but the governor vetoed that item to get rid of title lending. A joint committee in the Wisconsin State is now trying to put title lending back on the docket.

Regulation on payday loans in Wisconsin

Currently in Wisconsin, short-term loans secured by an auto title are not legal. These loans were banned with the 2010 legislation ban from selective vetoing. All payday loans can’t exceed 35 percent of the monthly income of the borrower in Wisconsin either. No extra interest could be charged when the loan is due, even with late payments. In 2009, Wisconsin’s 527 short-term lender locations lent out $600.5 million.

Wisconsin Republicans tries to rescind changes

U.S. Senate President Mike Ellis, a Republican, has been pushing this year for tighter regulations on payday loans. Regardless of his surprise at the recommendation of the Joint Finance Committee, Ellis agrees that the recommendations should be debated on the merits, rather than as a knee-jerk reaction. Rep. Robin Vos said, as the committees co-chairman, “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,” while talking about the belief that the governor’s vetoes changed the bill last year.

Not getting the same service with payday lending and title lending

Short-term financial solutions generally 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, but they each do so differently. Payday loans are short-term loans meant to be paid back in two to four weeks. Collateral such as a car is at risk with title lending since it offers high loan amounts. Then there are check-cashing services. For cashing the check, a small fee is charged. Each of these services is different and should be regulated and discussed differently.

Articles cited

WTAQ

wtaq.com/news/articles/2011/may/13/jfc-approves-measures-including-auto-title-loans/

JS Online

jsonline.com/news/statepolitics/121731299.html