Wisconsin Speaker does double take on payday loan legislation

A Wisconsin bill that would have capped payday loan interest rates at 36 percent is struggling to stay afloat as legislators are beginning to jump ship.

According to a Wisconsin Democracy Campaign report, 16 groups reported spending 2,466 hours and about $669,000 in 2009 to lobby legislators on the interest cap bill and four other legislative proposals to regulate payday lenders or auto title loan outfits. Seven of those organizations, which are payday lenders, their trade group and an auto title loan company, spent $583,658 to lobby one or more of the bills.

Campaign finance records show the Assembly Democratic Campaign Committee accepted $13,900 from payday lenders and auto title loan company lobbyists in the final six months of 2009.

The Democratic Campaign Committee received $5,500 on Sept. 9 and Assembly Speaker Michael Sheridan (D-Janesville) publicly announced he opposed the 36 percent rate cap. He claimed the proposal went to far, even though he co-sponsored a bill in 2007 with a 36 percent cap. The DCC received $5,000 from two Check ‘n Go executives, according to the WDC report, three weeks later.

“It’s hard not to notice” the timing of the donations, said Mike McCabe, the WDC’s executive director to the Milwaukee Journal Sentinel.  “It’s just something that jumped out at us.”

According to the Journal-Sentinal, Sheridan said he privately told two Assembly Democrats he opposed the cap in early 2008.

“It was the summer of 2008,  and I had told them at that time this was a two-step process,” Sheridan said Feb. 16. “I said, ‘First, we’re going to regulate the hell out of this industry, and if that doesn’t work we can always throw them out,’  but I felt like that was a two-step process. I want to make that clear that that has been my position for a long time.”

According to the Wisconsin Radio Network,  the Speaker admitted to dating a payday loan industry lobbyist, but the relationship did not influence his position.

Wisconsin remains the only state that does not have a rate cap on payday loans so the interest can amount to more than 500 percent a year. That has fueled a rapid expansion of payday loan stores – from two in 1995 to 542 in 2008.

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