Assembly panel backs payday loan measure

MADISON - Assembly Majority Leader Thomas Nelson (D-Kaukauna) refused to say Wednesday whether he supports Speaker Mike Sheridan (D-Janesville), who last year softened his stance on regulating payday lenders and recently disclosed he had dated an...

MADISON - Assembly Majority Leader Thomas Nelson (D-Kaukauna) refused to say Wednesday whether he supports Speaker Mike Sheridan (D-Janesville), who last year softened his stance on regulating payday lenders and recently disclosed he had dated an industry lobbyist.

Assembly leaders scheduled a vote for Tuesday on a bill to limit payday loans after a committee approved it Wednesday. Republicans decried the quick movement on the bill, saying Democrats were trying to bail out Sheridan by showing they were tough on payday lenders.

Advocates for the poor continued to slam the measure, saying it was riddled with loopholes and that Democrats had capitulated to payday lenders.

Assembly Democrats largely have stood behind Sheridan, but Nelson -- the No. 2 leader in the Assembly -- has not returned calls for more than a week. After a committee meeting Wednesday, Nelson refused to answer questions about Sheridan.

"I have nothing new to add on that," Nelson said when asked if he supported Sheridan as speaker.


He gave similar responses when asked if he thought a cloud hung over the payday lending bill -- as Republicans claim -- and whether he believed it was appropriate for legislators to date lobbyists.

Sheridan left the Capitol Wednesday shortly before an Assembly leadership committee scheduled the payday lending bill for a vote Tuesday before the Assembly.

Sheridan aide Rebekah Sweeney said he didn't attend the committee meeting because of a personal commitment.

Sheridan said late last month he was no more than friends with lobbyist Shanna Wycoff but later acknowledged the two had dated. Sheridan supported a bill last session to cap annual interest rates for payday lenders at 36 percent, but he said in October he thought such a cap went too far.

The rate cap is not included in the bill now moving through the Assembly, but Sheridan has insisted his views on the bill have not been influenced by Wycoff.

Wisconsin is the only state that does not regulate payday lenders.

The Center for Responsible Lending, a North Carolina-based consumer group, called the Assembly bill a concession to payday lenders.

"With all of the loopholes punched into this so-called reform proposal, the people of Wisconsin now have a bill that looks like Swiss cheese," said a statement from Jennifer Johnson, the group's senior legislative counsel.


Assembly Democrats denied that, saying they were pushing tough reforms that would rein in abusive practices.

The bill would limit payday loans to a maximum of $600 or 35 percent of biweekly income, whichever is less; ban vehicle title loans; and bar people from taking out more than one payday loan at a time or renewing a loan once it is due.

The bill passed the Assembly Financial Institutions Committee 6-5, with all Republicans voting against it.

"You're in the soup," Rep. Dean Kaufert (R-Neenah) told Democrats. "Trying to rush this through, get it by, get the stories over - I don't know. It's not pretty."

Assembly Republican Leader Jeff Fitzgerald of Horicon said the bill had become a "political anchor" for Democrats.

The Democrats said they had worked on the bill for months and had to act quickly to pass the bill because the regular legislative session ends in April. They said Republicans refused to take up tough legislation for years when they controlled the Assembly.

"The public is way ahead of us on this," said Rep. Josh Zepnick (D-Milwaukee). "They want things to be more fair."

Senate Majority Leader Russ Decker (D-Weston) said his colleagues want to regulate the industry and will decide how to proceed after holding hearings on a proposal by Sen. Jim Sullivan (D-Wauwatosa).


Sullivan's bill would limit payday loans to $900 and tighten regulations on where the lenders can locate. Lenders could charge any interest rate they wanted initially, but their rates would be capped at 33 percent a year for borrowers who didn't repay loans on time.

The fact that the Senate measure is different than the Assembly plan has raised questions about whether a consensus can be reached in both houses before the regular legislative session ends in April. The issue would die without action by then.

Gov. Jim Doyle has not stated a preference for either measure, but spokesman Adam Collins said that Doyle wants a strong payday lending bill on his desk this spring.

Copyright (c) 2010, Milwaukee Journal Sentinel/Distributed by McClatchy-Tribune Information Services

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