-
An expected ballot measure, which is backed by a prominent Democrat and Republican, would serve as a referendum on South Dakota's decades-old decision to deregulate interest rates.
January 2 -
Golden State regulators want to bar Internet lenders from linking electronically to borrowers' bank accounts and instead require them to accept paper checks as repayment. The proposal is a technological step backward, and it could ultimately force many online lenders to pull out of the nation's largest state.
April 20 -
The Consumer Financial Protection Bureau's plans for revamping payday lending set off a fierce debate Thursday over whether the agency had gone too far or not far enough, proving that this is likely to be one the trickiest rulemakings the agency will ever attempt.
March 26
Wisconsin Gov. Scott Walker will soon decide whether to expand the menu of products and services that the states payday lenders can sell.
A state budget bill passed by Wisconsins Republican-led legislature includes provisions that would allow payday lenders to start offering insurance, annuities and other unspecified related products. The legislation also contains language that could allow payday lenders to move into nonfinancial lines of business.
Under Wisconsin law, Walker has the authority to veto specific provisions of the budget legislation. He
Walker, who is a top-tier GOP presidential aspirant, has not commented publicly on the payday lending language.
In the past Walker has supported the payday industry. In 2011 the newly elected governor
But this time may be different. Significant portions of the financial services industry in Wisconsin are pressuring Walker to veto the payday lending measure.
The Wisconsin Bankers Association, the Wisconsin Credit Union League and the Wisconsin Insurance Alliance were among the trade groups that on Thursday sent a letter of opposition to Walker, arguing that the legislation creates an unlimited scope of authority for payday lenders.
"It permits payday lenders to engage in any business they wish as long as they obtain a license, if one is necessary," the letter stated. "No other financial institution has that kind of unlimited authority."
Walker is expected to wrap up his budget deliberations before 5 p.m. Central time Monday, when he is scheduled to announce his presidential run in Waukesha, Wis.
No one in the Wisconsin legislature is claiming responsibility for the payday lending provision, which was inserted into the budget bill shortly before the July Fourth weekend. The state Assembly passed the spending plan on Tuesday, and the state Senate passed it on Thursday.
Consumer advocates cried foul over the late addition of the payday lending provision. "We didnt know about it until it happened," said Peter Skopec, director of the Wisconsin Public Interest Research Group.
Payday lending foes were scrambling this week to determine the specific implications of the legislation.
The bill states that payday lenders may sell merchandise or conduct other business as long as they hold the applicable licenses, permits or approvals required. Critics said this language appears to open the door, at least in theory, for payday loans to be offered at casinos and liquor stores, or for payday lenders to obtain gambling and liquor licenses.
Sarah Orr, a professor in the consumer law project at the University of Wisconsin Law School, expressed concern that the legislation will lead to more consumers taking out payday loans. "I think the results for them and their families will be really catastrophic," she said.
The Milwaukee Journal Sentinel
A spokesman for the company told the newspaper that it wants to offer more financial products to underserved customers, including auto insurance and tax preparation services, and that the firm would still need permission from state regulators to start offering those products.
On Thursday, the PLS Financial spokesman declined to answer questions from American Banker, but did say, "The real goal of this provision was to really update, modernize Wisconsins statute, and bring it into line with other states."
Some states bar high-cost consumer lenders from offering insurance, but other states do allow it, according to Diane Standaert, director of state policy at the Center for Responsible Lending.
Wisconsin is one of seven states with no limit on the interest rates that payday lenders can charge. The average annual percentage rate charged by payday lenders in Wisconsin is 574%, according to
