The Wisconsin State Assembly on Tuesday passed a bill to regulate the payday loan business -- but not before rejecting a more stringent amendment that would have set an interest rate cap.
The so-called Responsible Lending Act, AB 447, passed on a 59-38 vote, mostly party-line. Twelve Republicans voted for it; five Democrats voted nay. Racine Democrats Cory Mason and Bob Turner voted yea; Republican Robin Vos voted against regulation.
The amendment which would have set an interest rate cap of 36% per year was co-sponsored by Mason and Turner, along with 18 other Democrats. It was rejected by a 56-41 vote. Mason and Turner were among the minority voting for the amendment; Vos voted with the majority that rejected it.
WisPolitics quoted Assembly Minority Leader Jeff Fitzgerald saying this is the wrong time to restrict credit, with unemployment high and people struggling to make ends meet. "You're taking a legitimate option away from people during the worst recession we've seen in 80 years," Fitzgerald said. "You're tone deaf to what's going on out there."
A prominent Democrat, Assembly Speaker Mike Sheridan, who last session supported a rate cap but this session said a cap goes too far, voted to table the amendment. (No doubt, his dating of a loan industry lobbyist had nothing to do with his switch...because that would be wrong.) Sheridan did vote for the bill itself.
Mason said, “While AB 447 represents a great step in the right direction, and will move Wisconsin forward towards more stringent regulations of the payday loan industry, I felt strongly that Wisconsin’s residents would be most protected by a rate cap on the outrageously high interest rates charged by these predatory lenders.
“I have heard story after story from hard-working constituents, whose lives have been devastated by the vicious cycle of never-ending debt that can result from these payday loans.”
The state Senate now takes up its own payday loan legislation.