Sen. Hansen: Announces Introduction of Responsible Lending Act
8/18/2005
Contact: Sen. Hansen
608-266-5670
Calls predatory lending ‘immoral’
(Green Bay)— Today Sen. Dave Hansen (D-Green Bay) announced that he will be introducing legislation to rein in the practices of predatory lenders. The legislation will cap interest rates on consumer loans at 18%.
“Predatory lending is tearing apart our communities,” said Hansen. “This is an immoral practice that cannot be regulated—it must be abolished. It is leading to bankruptcies, evictions and the breakdown of countless families across the state, and it should not be permitted under state law.”
In addition to capping interest rates, the legislation will also preclude in-state lenders from contracting with out-of-state institutions to avoid state interest rate caps if the in-state lender receives more than 50 percent of the revenues from the transaction.
“These so-called payday lenders are popping up all over the state, and contrary to popular belief, they are not exclusively in low-income neighborhoods,” said Hansen. “Because the majority of Wisconsin wageworkers haven’t seen a real raise in years, more and more families are turning to predatory lenders to keep food on the table. Predatory lenders should not be allowed to take advantage of low-income and middle-class families as the state sits idly by.”
According to a recent study conducted by Stephens Inc., the typical annual percentage rate for a payday loan is between 391% and 443%. The Center for Responsible Lending has further estimated that the industry costs 5 million Americans approximately $3.4 billion annually.
http://wispolitics.com/index.iml?Article=42753
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