Lawmakers are passing a bill as a second attempt to control the industry of payday lending. During the previous year, lobbyists and politics had a big role in creating legislations for the purpose of regulating an industry that is said to take advantage of vulnerable residents.

The sponsored act of Rep. Gordon Hintz, D Oshkosh entitled Predatory Lending Consumer Protection Act blocks auto title loans and sets limits to the loan amount. Specifically, the maximum amount must be at 35% of the gross monthly income. However, this act did not put the same cap of 36% to interest rates.
Spending huge amounts, lobbying lawmakers and contributing to campaigns were all done by the payday lending industry to fight the bill.

At present, two Republicans namely Rep. Evan Wynn, R-Whitewater, and Sen. Glenn Grothman, R-West Bend, are submitting a proposal to the legislature for a 36% limit to payday loan interest rates.
This new bill is also co-sponsored by Hintz. It was Wynn who sought information from Hintz and banking industries to work on the proposal. Wynn praised the work of Hintz and his colleagues in the previous session and blamed lobbyists for the failure of the interest rate cap proposal.

A Payday loan is a small amount, high interest loan with a short payment period. Typically, a payday loan is paid on the next paycheck of the borrower. The usual charge amounts to $20 for every $100 of loan. However, when the borrower fails to pay during the specified period, the debt is rolled over and the interest charges pile up.

The payday lending industry began in Wisconsin in 1995. Back then, interest rates were at 18 percent maximum. Eventually, 17 payday lenders emerged in the state. At present, there are about 550 of them.
According to Hintz, it is expected that the payday loan industry is preparing to prevent the bill on interest rate cap from becoming a law.

Enhanced by Zemanta
Share and Enjoy:
  • Print
  • Digg
  • Sphinn
  • Facebook
  • Mixx
  • Google Bookmarks
  • Blogplay

Related posts on loans for people with bad credit:

  1. Congress Insisted to Increase Business Lending Cap Congress Insisted to Increase Business Lending Cap Assuring that small-business lending would grow, credit unions insist that the Congress increase their business lending cap. However, there are some who believe that the facts are altered. Sen. Mark Udall proposed the Small Business Lending…...
  2. Payday Loan Trap Payday Loan Trap The number of payday loan stores in Missouri is extremely high and it raises concern from some citizens. The increase in the business had been parallel to the increase of the poor and middle class citizens in the area.…...
  3. Attempt to Resolve Home Loan Rates Begin Attempt to Resolve Home Loan Rates Begin According to the most recent figures from the Reserve Bank, the floating rate mortgages is 61.7 percent of the overall mortgage lending by banks for the month of May, which is a decrease from the…...
  4. Better Choice Payday Loan: A Better Alternative to Pennsylvanians Rob McCord, Pennsylvania State Treasurer is continuously admiring a payday loan program of a credit union. This program has been reported to save its members worth $15 million. The $125 million Cross Valley Federal Credit Union was visited by Rob McCord to…...
  5. Payday Loans Continue for Kentucky Borrowers Borrowers in debt look for other options as other lenders support the end of payday loan rate restrictions in assembly. Consumers in Kentucky want to open all their options in the decisions they make. This includes choosing the best financial…...

Tagged with:

Filed under: payday loans

Like this post? Subscribe to my RSS feed and get loads more!