MADISON, WI (WTAQ) - Wisconsin was the last state to adopt regulations on payday loans in 2010 – but many lenders have found ways to get around the rules.
The Badger State has almost 400 licensed outlets that grant payday loans – which offer advances on paychecks. But only about 200 have issued payday loans so far this year that had to be reported to the state.
The Milwaukee Journal Sentinel says many lenders have turned to unregulated installment loans, which have no regulations and can charge annual interest of 500 percent and beyond. And the Legal Aid Society, which helps low-income people, says many are getting financially-trapped by those loans.
Also, Republican lawmakers loosened payday loan regulations in the last session, by restoring a measure which defines those loans as being for 90 days or less.
Barb Wolf of PLS Financial Services says some people prefer installment loans, because they require consistent payments – as opposed to payday loans, which often have balloon payments close to maturity.
The Journal Sentinel said a Reedsburg man is appealing a case in which he was claimed he was given illegal payday loan conditions a while back. The lender said it was an installment loan and won the case. The man reportedly owes around $2,000, as his interest is rapidly building up.