Every state in the country except Wisconsin has cracked down on the check-cashing shops that advance low-income families money at usurious interest rates, enslaving the working poor in a cage of debt that cannot be escaped. The very existence of the payday loans industry is evidence of the failure of society to establish credit systems that respect the needs of working people and that serve rather than exploit low-income communities.
The industry’s shills claim that it provides “a sensible, transparent and reliable credit option.”
What they don’t say is that, left to their own devices, payday loan sharks attach to that “option” interest rates that would make criminal loan sharks blush. Payday lenders demand, and get, as much as 520 percent interest on the loans they provide to the elderly and the working poor.
For this reason, the only meaningful regulation of the payday loan sharks is a cap on the amount of interest they can charge. Any other “regulation” is a comic intervention by politicians trying to look like they are serious about protecting consumers while doing little or nothing of consequence.
Unfortunately, Assembly Speaker Mike Sheridan, D-Janesville, and his allies have proposed a sham “reform” measure that fails to cap interest rates. Claims by Sheridan and his allies that this legislation is a meaningful response to abuses by payday lenders are insulting to the intelligence of Wisconsinites.
source here.
