More than 500 of these money lenders are in Wisconsin. Many states have banned them all together, saying they land consumers into spiraling debt. But, in Northeastern Wisconsin, there are no state laws on the books. On the flip side, a group that lobbies on behalf of the industry believes they fill a vital need especially during the current credit crunch.
Nicole Thyrion disagrees. She took out some of the loans when her medical bills started piling up. "It was a 700 dollar loan and I was paying back almost $1,900," Thyrion said, "When you first sign the contract, it sounds so good, it's just not that way when you are writing out the checks."
In Wisconsin, about $700 million of these so-called payday loans traded hands last year alone, according to the Wisconsin Department of Financial Institutions. "It's supposed to be a cane to help you, not to be your surviving financial situation," said Suzanne Jeskewitz, R-Menomonee Falls. In 2003. Jeskewitz authored a bill that put some light regulations on the industry. "We have seen too many of these loans go into default or they are rolling over, and rolling over, and at this time we have not cap," said Jeskewitz.
According to an organization that tracks the PayDay loan industry, currently 11 state have created laws that basically ban these loans. Another 35 states have regulations that put caps on interest rates, and numbers of roll-overs. Currently, the Wisconsin state legislature has no laws or regulations on the books about PayDay loans. "I think it's a shame. I think it is shocking," said Jeskewitz.
Owners of payday loan stores like Greg Baer believe the free market should regulate the industry. "I believe in the product," said Baer, owner of "Mister Money" in Appleton, "I believe in the people of Wisconsin to make their own decision, I don't think the legislature needs to make our decision for us."
Some municipalities have approve zoning ordinances that put some restrictions on where the stores can locate, but right now, the Wisconsin legislature hasn't passed any state laws.
Owners of Payday loan stores like Greg Baer believe the free market should regulate the industry. "I believe in the product," said Baer, owner of "Mister Money" in Appleton, "I believe in the people of Wisconsin to make their own decsion, I don't think the legislature needs to make our decision for us."
Source: Nbc26.com