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State Assembly passes payday lending measure
February 16, 2010

The state Assembly approved a bill to clamp down on payday lenders Tuesday, just as Speaker Mike Sheridan (D-Janesville) disclosed he had stopped dating a payday loan lobbyist after taking criticism for the relationship.

Written by Patrick Marley, Journal Sentinel

Madison — The state Assembly approved a bill to clamp down on payday lenders Tuesday, just as Speaker Mike Sheridan (D-Janesville) disclosed he had stopped dating a payday loan lobbyist after taking criticism for the relationship.

The bill, adopted 59-38, bans auto title loans, limits payday loans to $600 and prevents borrowers from taking out more than one loan at a time. The measure does not include an interest rate cap, which advocates for the poor have said is key to regulating the industry.

Democrats who control the Assembly said they passed the toughest bill they could to rein in an industry that they said preys on the poor, while Republicans said the Democrats rushed poorly thought-out legislation to cover for Sheridan.

"We are telling the predatory lenders in this state their egregious policies will no longer be tolerated," said Assistant Majority Leader Donna Seidel (D-Wausau).

Assembly Republican Leader Jeff Fitzgerald of Horicon said Democrats passed the bill to try to cure their "public relations problems." He said it would eliminate jobs and take away the only loans some people qualify for.

"This is some people's only option," he said. "People have to use this industry. They do. It's their last resort."

A group of Democrats offered an amendment that would have capped annual interest rates at 36%, but it was tabled 56-41.

The bill now moves to the Senate. Democrats there have called for regulating payday lenders in a different way, which would force negotiations between the two houses to change the law.

Democratic Gov. Jim Doyle has called for tightening limits on the lenders.

The bill was passed a little over two weeks after Sheridan acknowledged he had dated Shanna Wycoff, a lobbyist for Axcess Financial, which operates Check 'n Go stores. Sheridan initially said the two were just friends.

Sheridan co-sponsored a bill in the last legislative session capping interest rates for payday lenders at 36%, a level payday lenders say would put them out of business. Sheridan said in September he believed such a cap went "too far" and voted Tuesday against the rate cap.

He said he told Assembly Democrats he no longer supported a rate cap in 2008, though he didn't say that publicly until much later.

Sheridan, 51, is divorcing his wife. He has insisted his dates with Wycoff, 31, have not influenced his views on the bill.

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