Wisconsin Payday Loan
Payday loan is very popular throughout the United States and even continues to become one of the largest businesses in the nation. With, this newest and fastest growing form of short term lending, in which the customer is basically living from paycheck to paycheck and needs a cash advance to bridge that gap, it is no doubt that almost thousands loan companies are offering payday loans these days despite that fact that payday loans are only held legal in 36 states.
Speaking of states, one of the centers for payday loans is the State of Wisconsin. It had been reported that in Wisconsin alone, the Department of Financial Institutions (DFI) accounted 839,285 Wisconsin payday loans totaling $200.2 million in the year 1996, with a surprising increase from 1996, which recorded approximately 80,000 Wisconsin payday loans at $11.2 million. It was even noted by the DFI data that there had been an increase in the number of licensed Wisconsin payday loan lenders. The number then almost doubled from 17 Wisconsin payday loan companies with 64 locations in 1996 to 31 Wisconsin payday loan companies at 174 locations in 1999. How much more?
With such notable growth in the Wisconsin payday loan business alone, several questions have been raised regarding the regulations of Wisconsin payday loan practices. Many Wisconsin payday loan lenders have asserted that they are providing a needed service that is not accessible through the conventional financial institutions. On the other hand, many of the Wisconsin payday loan consumer groups question the finance charges assessed for the Wisconsin payday loans. For that matter, the Wisconsin Legislature considered two major approaches to further standardize the Wisconsin payday loan lending within the state, however, these approaches were neither passed.
Furthermore, it has been noted in some reports that the senate proposal actually dealt with placing maximum interest rates for the Wisconsin payday loans. For this, the assembly measure would have obligated the Wisconsin payday loan lender to give further detailed and comprehensive information to the consumers of the payday loans about the loans in general.
Today, the state of Wisconsin along with the other states such as Arkansas, Montana, Hawaii, and Utah, sets payday loan fees at a maximum percentage of the face value of the total check, while the others impose the percentage fee on the proceeds of the payday loan. In addition, a few states set a sliding fee scale associated to the size of the loan.
The Wisconsin payday loan lenders these days, according to the new regulation, should generally obtain a license from DFI's Division of Banking for the main purpose of charging interest higher than 18 percent APR, however, there is no statutory maximum on the interest rates or fees charged by these Wisconsin payday loan lenders.