On March 19th the State Senate Committee on Veterans and Military Affairs, Biotechnology, and Financial Institutions held a public hearing in West Allis on payday loans. During the five hour plus hearing, which the Milwaukee Courier attended, testimony was provided by interested parties, including many constituents of select committee members.
By all accounts, it appeared that actual consumers who use the payday loan product were outnumbered by special interests who were advocating on “behalf” of consumers who have used the product. Not to mention, the pay day loan consumers who did take the time to testify on behalf of ensuring a consumer choice to access credit outnumbered the consumers promoting an industry-killing thirty-six percent interest rate cap by a 3 to 1 margin. The consumers who encouraged committee members to disallow any form of legislation that would eliminate their only means of accessing credit were small business owners, students, faith-based representatives, and construction contractors. Their hands-on message was simple – Give me an option to access credit.
While the debate was vigorous and at times polarized, we played close attention to Milwaukee consumers. While others had interesting perspectives, this paper is more concerned with Milwaukeeans ability to access credit and less interested in outstate concerns, for example, a State Representative from Oshkosh and his frustration with seven pay day lenders within a block and a half of one another.
The Courier often wondered why so many special interests were participating in a dialogue over an industry that has never appeared in the Wisconsin Department of Agriculture Trade and Consumer Protection’s Annual Top Ten list of consumer complaints. Advocating for the regulation of an industry by special interest proponents who have never used the product or service firsthand is pre-mature at best, but proposing to eliminate an industry that provides access to credit because it has been labeled a lower-class lender of last resort is insulting to the Milwaukee consumers who use the product wisely and sparingly.
We heard actual constituent/ consumers thanking Representative Jason Fields and Senator Jim Sullivan for introducing legislation without an interest rate cap – a measure that could kill the payday lending industry. We also heard special interests who shared no knowledge of actually using a short term lean tell committee members, “an interest rate cap or nothing.” This newspaper will always take into consideration the people’s voice first and foremost.
According to an October 9, 2009 Milwaukee Journal editorial, “Capping rates at 36 percent on so-called payday loans goes too far – likely to result in shutting down the shops that give these loans and forcing customers into more damaging alternatives.” We encourage our readers (especially those in Senator Tim Carpenter and Senator Spencer Coggs legislative district) to contact their Senators and request their elected officials oppose the overregulation of a targeted industry and ensure access to credit for all.