New bipartisan legislation would create new limits for payday loans, WisBusiness reports, capping the interest rates such lenders can charge at 36%.
Authors — including state Reps. Scott Allen, R-Waukesha, and Amaad Rivera-Wagner, D-Green Bay, and Sen. Andre Jacque, R-New Franken — say the two bills, LRB-2249 and LRB-4308, will “work together to create a framework for healthy lending.”
A co-sponsorship memo sent to other lawmakers on the two bills shows that most of these loans provided by short-term lenders are called “installment loans” under state law. While at least 17 Wisconsin companies already provide these loans with a maximum interest rate of 36%, others charge as much as 850%.
Both pieces of legislation being circulated would set the annual percentage rate for payday and installment loans at 36%, matching the federal APR limit for short-term loans being provided to veterans.
One bill stipulates various reporting requirements for short-term lending that aim to “provide transparency” in the industry, authors say. Licensed lenders would, under LRB-4308, have to report the average APR for their loans and the number of loans that were refinanced or led to a money judgement or vehicle repossession.
LRB-2249, meanwhile, would redefine the framework for payday loans in state law and add other restrictions and requirements.
