Wisconsin Payday Loan Laws & Legislation

Payday Loans and Wisconsin – A Good Compromise

Wisconsin payday loan regulators have stitched together a compromise bill that offers strong consumer protection and allows the very popular payday loan product to continue to be offered as one of many financial solutions for Wisconsin residents.

In essence, the proposed Wisconsin payday loan bill will limit payday loan consumers to a maximum $600 payday loan or 35% of a borrower’s 2-week gross income, whichever is less. This proposed $600 maximum payday loan would include any fees associated with the payday advance.

This payday loan legislation would not cap the annual interest rate that lenders can charge on payday loans. A previous bill would have limited them to 36 percent. Rep. Donna Seidel, D-Wausau, said, “The cap would have gone too far in choking off credit for borrowers struggling in the economic downturn by essentially wiping out the industry.”

Additionally, the proposed payday loan legislation allows payday loan borrowers one payday loan at a time. This would be assured by the implementation of a Wisconsin payday loan data base to be industry funded; $1 per payday loan.

Consumer protectionists applauded the proposed Wisconsin payday loan legislation because it specifically prohibits payday loan lenders from “rolling over” a payday loan consumer’s outstanding debt into a new payday loan. This addresses the so-called “cycle-of-debt” issue, a practice attacked by competitors against payday loan products. This includes banks, installment lenders and credit unions.

In 2008 Wisconsin, it’s estimated there were 530 payday loan stores that gave out 1.2 million loans totaling $723 million.

Comments ( 4 )
  • admin says:


    Some very insightful comments!

    Another aspect of this discussion is that ACTUAL consumers of payday loans rarely attack our industry. The folks who use us are generally more satisfied with our disclosure of rates, our underwriting criteria and the hours we’re open than they are of banks and credit card companies. More than one outside, independent study has been done to confirm this.

    It’s the so-called consumer protectionists (who have their own agendas) and our competitors (there are plenty of other industries who covet our customers) that want us to go away.

    Lucky for us, payday loan consumers by the millions “vote” for us every year by continuing to use our payday loan products and services.

  • Gabriel Rodriguez says:

    It’s interesting how much opinion on Payday Loans differs State to State if you are considering the current or proposed State Legislation. Of course that “opinion” can sometimes differ greatly from the public’s opinion when you look at statistics such as “# of Payday Loans given in State of ____ vs. # of official complaints” which usually tells the tale of happy loan customers, as well as deeper surveys which usually show that consumer are happy with the product we offer (of course they always want it for LESS!).

    Also, it’s “interesting” (disgusting really) that the only way to really gather support for the opponents to Payday Lending, they MUST distort the facts!! If one were to simply debate truthfully and logically about the pros and cons of Payday Lending, you would find that almost any argument AGAINST Payday Lending could be satisfied with LOGIC!!

    -APR’s are too high! – Well, APR’s aren’t meant to be calculated on short-term loans. A 30% APR on a 30 year mortgage represents a much higher percentage of the initial amount borrowed, than 1000% APR on a 2 week loan. Simple math, but most of the ammo against our industry seems to be the plain ignorance or distortion of percentages and numbers. Not lies, just pure, calculated misrepresentation of the figures, to shock the average Joe who could care less about calculating APR percentages.

    -The cost of a Payday Loan is WAY too high! It’s “predatory” and unjustified.. – When you consider the high % of customers defaulting (we are dealing specifically with people who have bad credit or no other finance options) on their loans and the cost associated with giving a Payday Loan (ACH fees, background checks, operating and licensing fees) I would think that a mere $15 or so per $100 seems about right, wouldn’t you?

    -People get caught in a lending “trap” by extending their loans. – That can be fixed WITHOUT shutting down the industry, (and YES putting a 36% APR cap on Payday Loans is essentially shutting down the industry) by putting a limit to the number of rollovers allowed (Virginia and Oregon for example). Wow, you don’t have to be a genius to figure out an answer to that objection! Yet some states seem to be having a hard time “regulating” and seem to be protecting the interest of big banks (after all, last year big banks made about 38 BILLION in overdraft fees…) by limiting the people’s options for short-term credit options.

    -Gabriel Rodriguez
    Synaptic Payday Loan Software Solutions

  • PayDay Loans Professor says:

    Hmm yeah don’t outlaw payday loans. I am really very careful while having this payday loans with the help of payday loans professor.

  • Rejinold says:

    Looks like some state reps are getting it! Don’t outlaw payday loans!

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