Tuesday, April 13, 2010
4:08 PM
Debate begins on payday lender bill
Senators have begun discussing a number of amendments to SB 530, which would enact regulations on payday lenders.
The first amendment -- proposed by Sens. Tim Carpenter, D-Milwaukee, Michael Ellis, R-Neenah, and Glenn Grothman, R-West Bend -- would in part implement a 36 percent interest rate cap on payday and auto title loans.
Carpenter said a rate cap is the only effective means of combating predatory lending, and that not including one in the bill amounts to "having basically no regulation on the payday lending industry."
The bill's author -- Sen. Jim Sullivan of Wauwatosa -- said the bill is stronger than both the Assembly version and the proposed amendments. He said the monthly limit included in the bill would come in under the 36 percent proposal.
He added that the bill is "32 pages of regulation that currently doesn't exist," and that the state shouldn't be responsible for setting interest rates.
"No one that I can find in this body is a fan of this particular industry," Sullivan said, arguing that adding the amendment would doom the bill in the Assembly.
Sen. Judy Robson, D-Beloit, said Sullivan's bill amounted to "a light touch," suggesting that payday lenders would be able to find a way around the bill's proposed limits.
"No matter what we do today, they're going to find a way," Robson said.
Sen. Grothman said despite his conservative leanings, he has no problem taking on an industry that "takes advantage of people's weaknesses."
Grothman also made his intentions clear with regard to the rate cap.
"This amendment does shut out the industry. Boom -- they're gone," Grothman said. "It'll be just like Minnesota. People in Minnesota get along just fine without this industry."
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