State Senator Andre Jacque is looking to hold pay day lenders accountable.
Many Wisconsinites are feeling the pressure in their wallets due to rising costs of the essentials, and in an effort to make ends meet, some turn to getting short-term pay day installment loans.
While this may help in the short term, Sen. Jacque says some companies enforce exorbitant interest rates.
“In the most recent report from the Wisconsin Department of Financial Institutions, the average interest rate for these loans was 850%,” the New Franken legislator noted. “By comparison, an individual taking out a $500 loan at a 500% interest rate could end up paying 1400 dollars for a six-month loan or 20 $500 for a 12-month loan.”
43 states currently enforce an APR cap on these loans of around 36%, which is also the federal government’s limit on the interest charged to military members and their families.
Sen. Jacque has written a bill which would bring Wisconsin into the fold, and impose a 36% interest cap on installment and pay day loans.
He put it bluntly, telling SeehaferNews.com, “Businesses engaged in short-term lending must not be allowed to take advantage of individuals in desperate situations and place them in a never-ending debt trap that kills their and their family’s finances, often with tragic results.”
Sen. Jacque says the bill, which has bipartisan support, also improves transparency, adds regulatory guardrails to protect consumers, and makes financial literacy available to those taking out payment loans.
Sen. Jacque encourages anyone interested in learning more to contact his office at 608-266-3512.
