Wisconsin lawmakers agreed on Thursday, April 22, 2010, to regulate payday lenders. Wisconsin had been the only state not to regulate this industry, which consumer advocates said allowed its rapid growth and trapped too many borrowers who take out short-term loans with high interest rates in a cycle of debt.
1. What were some provisions of the plan?
2. According to the plan, if a personâ€™s monthly income was $5,000, how much could he/she borrow from a payday lender?
3. Why do you think that Wisconsin was the last state to pass some type of regulation on this industry? What are the regulations on payday lenders in your state?
4. If a person wanted to take out a short-term auto title loan with a payday lender in the state of Wisconsin and had a car with a value of $14,000, how much could they borrow under this new regulation?
Bauer, S. (2010). Wisconsin Lawmakers Agree to Regulate Payday Lenders, Associated Press, April 23 (Retrievable online at http://www.google.com/hostednews/ap/article/ALeqM5jZC94QO-79DsWzWnEhQQUt0boxuAD9F8GUL83)