Payday Loans in Wisconsin: Subprime Report
Wisconsin: land of cheese, lakes, and rabid football fans. It’s a state with an economy on the rise. In 2015, America’s Dairyland experienced a growth in median household income for the first time in 8 years, and the poverty rate dropped from 12.1% in 2015 to 11.3% in 2017. Wisconsin families make an average of $60,773, and Wisconsin residents also have some of the highest credit scores in the country. According to Realtor Magazine, the average 2017 credit score in the Badger State was 696, putting it at #7 in the top 10 states with the highest average credit score in the nation – a full 21 points higher than the average national score of 675.
While all of this is good news for Wisconsin residents, many financial dangers still lurk throughout the state. Chief among them are predatory payday and title loans, which carry high fees and interest rates designed to trap consumers in a vicious cycle of debt.
Payday Loans in Wisconsin
Payday loans are short-term, high interest loans that often lead borrowers into financial ruin. Payday lenders often charge as much as they want in interest, quickly doubling, tripling, or even quadrupling the amount a borrower will owe on even a small cash loan. In 2014, Wisconsin payday lenders loaned more than $37.4 million to consumers, raking in $8.4 million in fees and interest charges. In 2016, Wisconsin payday lenders provided more than 115,000 payday loans (averaging just over $300 each) in the state (according to the Department of Financial Institutions). Even more recent data shows the following figures for 2017:
- # of payday loans made by all licensees:96,974
- Average principal amount for all payday loans:$329.85
- Average interest, fees, and other charges for all payday loans:$74.16
- Average APR for all payday loans:495.50%
- # of payday loans paid in full by maturity date:32,792
- # of payday loans that resulted in repayment plans:1,064
- # of payday loans that were repaid with proceeds of a subsequent payday loan:20,533
- # of payday loans that resulted in default:4,458
One study found that the average payday loan borrower in Wisconsin takes out about 12 loans per year and makes less than $19,000 per year in income.
Title Loans in Wisconsin
A title loan is a type of short-term, high-interest loan that is typically taken out by borrowers with poor credit, who have few other options for securing funds when an expense pops up. Taking out a title loan doesn’t require a credit check. Instead, title borrowers use the titles for their vehicles as collateral for the loan. If they fail to pay back the loan on time, the lender can take possession of the vehicle and will sell it to cover the cost of the loan.
Wisconsin is one of only a few states that allows title lending without an interest cap. Other states have prohibited title loans entirely, or imposed rate caps that have effectively killed the title lending business model.
Because title loans in Wisconsin have no cap on interest or fees, lenders can charge any rate they see fit. Title lenders are allowed to offer loans of up to $25,000 or 50% of the value of the borrower’s vehicle.
Consumer Protection in Wisconsin
If a Wisconsin payday or title lender has violated state law or is otherwise mistreating you, there is help available. The Department of Financial Institutions exists to enforce laws, and they can also work with you to resolve problems.
How to Report a Lender in Wisconsin
Has a Wisconsin payday lender violated payday loan laws and regulations? If they have, don’t let it go ignored—reach out to the Wisconsin Department of Financial Institutions to report the payday lender.
To file a complaint with the Department of Financial Institutions, visit https://www.wdfi.org/. On the left side, select “File a Complaint.” Choose from the list of complaints to fill out the designated form. If you are unsure which category your complaint fits in, simply select “General Complaint.”
From here you will be taken to the “File a Complaint” page—you can either fill out the online form, email your complaint with attachments, or download the complaint form and mail it to DFI (mailing address below):
Wisconsin Department of Financial Institutions Information
- Address: Wisconsin Consumer Act Section P.O. Box 8041 Madison, WI 53708
- Phone: (608) 264-7969
- Fax: (608) 264-7968
- Website: http://www.wisconsin.gov/
Guides to Payday and Title Lending in Wisconsin Cities
You know payday and title loans in Wisconsin are a problem. But what about at the city level?
Check back soon for these payday and title loan guides for the following cities in Wisconsin…
Green Bay| Madison| Milwaukee