Payday Lending Legislation

http://www.jsonline.com/news/milwaukee/83826977.html

Public hearing planned on payday lending legislation

By Lee Bergquist of the Journal Sentinel

Posted: Feb. 8, 2010

The Social Development Commission is holding a public hearing on March 9 on pending legislation regulating payday lending in Wisconsin.

The hearing will take place from 4:30 to 8 p.m. at the Washington Park Senior Center, 4420 W. Vliet St., Milwaukee.

The SDC wants people to have their say about the lending practice. Their testimony will be given to state officials over pending payday lending legislation.

The Assembly Financial Institutions Committee is expected to vote on a bill Wednesday that would limit payday loans to $600 and bar borrowers from taking out more than one loan at a time. Details of the legislation are still being ironed out and will be announced at the Capitol on Tuesday at 10 a.m.

According to a preliminary draft of the legislation, the bill wouldn't cap interest rates. Capping interest rates has been pushed by some as the best way to regulate the industry. Instead, the bill would protect consumers by creating a database of payday loans to ensure borrowers couldn't take out more than one loan at a time.

The legislation is likely to have its detractors. On Monday, the Milwaukee Inner-city Congregation Allied for Hope said the legislation falls short of the level of regulation needed. In a statement, the social justice group said it feared the payday industry will find loopholes in pending legislation.

The SDC says that the number of payday lenders has risen from 17 in 1995 to 542 in 2009.

The short-term loans, if repeatedly renewed, can cost borrowers 500% or more in annual interest.

For more information on the Social Development Commission hearing, call David Celata (414) 906-2718.

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