Wisconsin Senate Bill SB842

Wisconsin 2023-2024 Regular Session

• Introduced: 12/26/23
• Refer: 12/26/23
• Failed: 4/15/24

Caption

Interest rates on payday loans.

Impact

The implementation of SB842 is expected to have significant implications for state law concerning payday lending. By capping interest rates, the bill aims to create a more equitable lending marketplace, where consumers are better protected from predatory lending practices. This could potentially improve the financial stability of borrowers who find themselves trapped in high-interest loans. The bill also modifies existing provisions related to the enforcement of payday loans, ensuring that any loans with interest rates above the established cap would be deemed unenforceable in Wisconsin.

Summary

Senate Bill 842 aims to regulate the interest rates charged by payday loan providers in Wisconsin. Specifically, the bill establishes a maximum annual percentage rate (APR) of 36 percent that can be charged on payday loans. Prior to this bill, there was no limit imposed on the interest rates that payday loan licensees could charge before the maturity date of the loan. This change is intended to provide consumer protection, ensuring that borrowers are not subjected to excessively high-interest rates that can lead to a cycle of debt.

Contention

While the bill is viewed positively by consumer advocacy groups and some legislators who support stronger regulations on payday lenders, it may face opposition from those in the payday loan industry who argue that such caps could limit the availability of credit to consumers who need quick and accessible funds. They may contend that the bill would unfairly restrict their ability to operate and service a market that often caters to individuals with limited financial options. The balance between providing consumer protection and ensuring access to credit will likely be a central point of debate as the bill moves forward.