A Guide to Payday and Title Loans in

Wisconsin

The Wisconsin Subprime Marketplace: Title and Payday Loans in Wisconsin

At a Glance
Wisconsin, USA
  • Nickname: The Badger State or America’s Dairyland
  • Population: 5.758 million
  • Capital: Madison
  • Website: www.wisconsin.gov
Download Fact Sheet

Wisconsin, “America’s Dairyland”, experienced a growth in median income for the first time in eight years.1 In 2015, the poverty rate dropped to 12.1% (677,964 people) from 13.2% in 2014. Wisconsin’s poverty rate has remained above 10.8% since 2007.1 Household incomes grew in Wisconsin for the first time since before the Great Recession. The median household income for 2015 was $55,638, which is up 5.6% from 2014.1

In addition to the improvement of the median household income and poverty rate, Wisconsin residents have an average credit score of 752.2 This places Wisconsin in the top spot for the best U.S. credit scores alongside Minnesota.2 However, with such a strong average credit score, why are residents still turning to payday loans and title loans in Wisconsin? Residents might think it is the easiest way to get extra cash to make ends meet, but it is the furthest thing from helpful.

Wisconsin Median Household Income vs U.S. Median Household Income
Wisconsin
US
$55,638
$56,516
Median Household Income

An Analysis of Payday Loans in Wisconsin

As of 2017, Wisconsin has two times as many payday lenders (439) as McDonald’s restaurants (285)—that’s 8.18 payday lenders per 100,000 people. In 2014, payday lenders loaned more than $37.4 million to consumers in Wisconsin, and made $8.4 million in fees and interest charges.

There are only eight states that have no cap on annual interest rates for payday loans: Wisconsin, Nevada, Utah, Delaware, Ohio, Idaho, South Dakota and Texas. With no cap on annual interest rates for payday loans in Wisconsin, lenders can easily trap borrowers.5

The History of Payday Loans in Wisconsin

Until 2010, Wisconsin was the only state that did not regulate payday loans. After a long debate between 2009 and 2010, Democrats passed a bill that limited where payday loan stores in Wisconsin could be located and limited payday loans to $1,500 or 35% of a person’s monthly income, whichever is less.6

Through these regulations, then-Governor Jim Doyle, made the bill tougher by using his partial veto powers to ban auto-title loans in Wisconsin and broaden the definition of payday loans. Less than a year later, Republicans gained control of the legislation and softened the regulations to be friendlier to lenders.6

However, even before the laws were changed in 2011, payday lenders in Wisconsin had already begun changing the types of loans they made so they could charge higher interest.6

Quick Fact

While there is no limit on APR, the average rate of a loan of $100 given for a period of two weeks can lead to an APR of 565%. 7

To avoid payday lending regulations, payday lenders in Wisconsin began offering installment loans—there were no limits on how much they could lend or how many loans they could make to each customer.6 Lenders don’t even have to check if a borrower can repay the installment loans or enter the loans into a state database, as they do with payday loans in Wisconsin.6

Wisconsin Payday Loan Rules and Regulations
  • Maximum loan amount:Lesser of $1,500 including fees or 35% gross monthly income.
  • Loan Term:90 days or less
  • Rollovers Permitted:Yes, one renewal is allowed.
  • Fees and finance charges:No Limit
  • Finance charge on a 14-day $100 loan:No Limit
  • APR on a 14-day $100 loan:No limit, but the average rate for 2015 was 565%.
  • Maximum Number of Outstanding Loans at a Time:No Limit
  • Repayment Plan:Yes – Four equal monthly installments with one payment plan offer per 12 months.
  • Cooling-off Period:24-hours after paying renewed loans.,sup>9

While Wisconsin lawmakers worked to limit payday loans, lenders still found ways to flourish from the plight of consumers. In 2011, Republican state legislators and Governor Scott Walker changed the definition of payday loans in Wisconsin to include only those made for 90 days or less.7 As a result, payday lenders began distributing loans with repayment terms exceeding 91 days to avoid the payday loan laws in Wisconsin.7

Quick Fact

In 2015, the average annual interest rate on payday loans in Wisconsin was 565%. A consumer borrowing $400 would end up paying $556 in interest alone over three months.8

Wisconsin Payday Loans vs Illinois Payday Loans

Wisconsin

icon-wisconsin

565% APR for Wisconsin Payday Loans4
439 Wisconsin Payday Loan Stores4

Illinois

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403% APR for Illinois Payday Loans4
727 Illinois Payday Loan Stores4

Final Notes on Payday Loans in Wisconsin

Lawmakers attempted to create restrictions to govern payday loans in Wisconsin in 2010, but that ruling quickly changed in 2011.7 While the Wisconsin payday loan law limits loans that require repayment within 90 days, lenders have adapted by simply offering loans with terms of 91 day or more, which are not regulated by the payday lending law.7 Wisconsin remains one of the few states with no cap limit on payday loans, which can lead to further debt for consumers.

An Analysis of Title Loans in Wisconsin

The History of Title Loans in Wisconsin

Wisconsin has 162 title lenders, which might not seem that significant. But, with 26,836 people per title lender in Wisconsin, it makes all the difference.12 After the Great Recession, Democratic lawmakers in Wisconsin worked to place limitations on payday loans and title loans.12 While the initial vote was in favor of these limitations, when a Republican lawmaker took office, the regulations were reversed to the benefit of payday and title lenders in Wisconsin.12

Quick Fact

Wisconsin title loan fees totaled $102.7 million compared to payday loan fees of $8.4 million.11

Wisconsin Title Loans Per Capita in Wisconsin vs Illinois

Wisconsin

icon-wisconsin

162 Wisconsin Title Loan Stores14
26,836 People per Wisconsin Title Lender14

Illinois

icon-illinois

518 Illinois Title Loan Stores14
18,729 People per Illinois Title Lender14

Consumer advocates in Wisconsin have pushed for a ban on title lending and restrictions to impose interest rate caps.13 Their dream was achieved in 2010 when former Governor Jim Doyle inserted a veto into a bill aimed at reining in payday lending that barred title loans entirely.13 However, Republicans undid that veto with the 2011 budget, which reauthorized the practice of title loans in Wisconsin.13

Wisconsin Title Loan Restrictions

Wisconsin is one of only 13 states that currently allows title lending without an interest cap.13 Other states have prohibited title loans entirely, or imposed rate caps that have effectively killed the title loan business model.13

Title loans in Wisconsin have no cap on interest or fees, which means the lender can charge any rate they see fit according to Wisconsin Statutes 138.16.14 The maximum loan amount a lender can offer a consumer is up to 50% of the value of the vehicle or $25,000 maximum.14

If you are unable to make any payments on your title loan in Wisconsin, law requires the lender to give a 20-day notice prior to repossession.14 However, if your vehicle is repossessed, Wisconsin law does not require the lender to return any excess funds it gets from selling your vehicle after paying off the title loan, interest, and repossession fees.14

Quick Fact

Title lenders in Wisconsin won’t repossess a vehicle until the borrower is unable to make any payment at all. This means, if you can make any payment, the lender will be happy to offer new loans to finance the old ones—watch out.13

Final Notes on Title Loans in Wisconsin

Title loans in Wisconsin trap the borrower in an endless cycle of debt. While there was a glimmer of hope for consumers in Wisconsin in 2010, the dream of banning title loans was quickly crushed in 2011 when the ban was reversed.

If you are short on cash, take a closer look at the fine print of title loans in Wisconsin—they’re far from beneficial for getting you out of your financial rut.

Regulating Payday and Title Lenders in Wisconsin

Between July 2011 and December 2015, the Department of Financial Institutions (DFI) received 308 complaints about payday lenders in Wisconsin.8 The Department responded to those complaints with 20 enforcement actions.8

If you feel trapped by a payday loan, you should reach out for help. Whether a payday loan company in Wisconsin violated specific payday laws or mistreated you, someone is there to help. While the DFI can enforce laws, they can also work with you to resolve the problem.

 

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.

Too file a complaint with the Department of Financial Institutions (DFI), 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 can be found to the right).

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/

Outside Help for Payday and Title Loans in Wisconsin

Aside from the Wisconsin Department of Financial Institutions (DFI), you can find help and guidance with the Legal Action of Wisconsin. Stacia Conneely, a consumer lawyer with Legal Action of Wisconsin states that there are thousands of high-interest installment loans that are being issued but not reported.15

Legal Action of Wisconsin provides free legal services to low-income individuals. With a lack of reporting of payday loans in Wisconsin, it creates a problem for policymakers and Legal Action of Wisconsin wants to help. By reaching out, a consumer lawyer can help you find relief from payday loans in Wisconsin.

If you are a low-income resident of Wisconsin with a payday loan, or other consumer law, problem, contact Legal Action to see what they can do to help.

Consumer Protection in Wisconsin

Payday loans and title loans in Wisconsin are not making it easy on lawmakers. While legislation continues to fight for improved consumer protection, loopholes remain. And through those loopholes, title and payday lenders in Wisconsin continue to find ways to charge unrealistic interest rates and fees—trapping consumers in an endless cycle of debt. By educating yourself and reaching out for help, you can help Wisconsin lawmakers find a way to better protect consumers.

Utilize this page as a go-to resource for title loans and payday loans in Wisconsin—it has all the information you need, and then some.

Guides to Payday and Title Loans in Wisconsin Cities

You know payday and title loans in Wisconsin are a problem. But what about at the city level?

Check out these payday and title loan guides for the following cities in Wisconsin…

Green Bay | Madison | Milwaukee

Works Cited

  1. “Wisconsin incomes up, poverty down” Milwaukee Journal Sentinel. Accessed March 22, 2017. http://www.jsonline.com/story/news/2016/09/15/wisconsin-incomes-up-poverty-down/90355098/
  2. “Wisconsin, Minnesota have best U.S. credit scores” Milwaukee Business Journal. Accessed March 22, 2017. http://www.bizjournals.com/milwaukee/news/2016/11/07/wisconsin-minnesota-have-best-u-s-credit-scores.html
  3. “State Debt” Ballotpedia. Accessed February 13, 2017. https://ballotpedia.org/State_debt
  4. “McDonalds’ vs. Payday Lenders” California State University Northridge. Accessed February 13, 2017. http://www.csun.edu/~sg4002/research/mcdonalds_by_state.htm
  5. “Special Report: Vicious cycle of payday loans poses hazard for low-income borrowers” Milwaukee Neighborhood News Service. Accessed March 22, 2017. http://milwaukeenns.org/2016/01/04/special-report-vicious-cycle-of-payday-loans-poses-hazard-for-low-income-borrowers/
  6. “Payday lenders back in business with looser regulations” Milwaukee Journal Sentinel. Accessed March 22, 2017. http://archive.jsonline.com/news/statepolitics/payday-lenders-back-in-business-with-looser-regulations-jt7useg-182755581.html
  7. “No relief from state’s 565% payday loan interest under new rules” Milwaukee Journal Sentinel. Accessed March 22, 2017. http://archive.jsonline.com/news/statepolitics/no-relief-from-states-565-payday-loan-interest-under-new-rules-b99742201z1-382580121.html
  8. “No relief from Wisconsin’s 565 percent payday loan interest under new rules” Wisconsin Center for Investigative Journalism. Accessed March 22, 2017. http://wisconsinwatch.org/2016/06/no-relief-from-wisconsins-565-percent-payday-loan-interest-under-new-rules/
  9. “Alabama State Information” Payday Loan Consumer Information. Accessed March 6, 2017. http://www.paydayloaninfo.org/state-information/8
  10. “Wisconsin’s auto title loan industry still thriving” The Cap Times. Accessed March 22, 2017. http://host.madison.com/ct/news/local/writers/jack_craver/wisconsin-s-auto-title-loan-industry-still-thriving/article_d8380268-de6c-11e2-b819-0019bb2963f4.html
  11. “Payday and Car Title Lenders Drain $8 Billion in Fees Every Year” Center for Responsible Lending. Accessed February 15, 2017. http://responsiblelending.org/sites/default/files/nodes/files/research-publication/crl_statebystate_fee_drain_may2016_0.pdf
  12. “Driven to Disaster: Car-Title Lending and Its Impact on Consumers” CFA. Accessed February 15, 2017. http://www.responsiblelending.org/other-consumer-loans/car-title-loans/research-analysis/CRL-Car-Title-Report-FINAL.pdf
  13. “Wisconsin’s auto title loan industry still thriving” The Cap Times. Accessed March 22, 2017. http://host.madison.com/ct/news/local/writers/jack_craver/wisconsin-s-auto-title-loan-industry-still-thriving/article_d8380268-de6c-11e2-b819-0019bb2963f4.html
  14. “Car Title Loan Regulation” Consumer Federation of America. Accessed March 22, 2017. http://www.consumerfed.org/pdfs/Resources%20CTL%20StateLawTermChart5%2012%2016.pdf
  15. “Payday lenders back in business with looser regulations” Milwaukee Journal Sentinel. Accessed March 22, 2017. http://archive.jsonline.com/news/statepolitics/payday-lenders-back-in-business-with-looser-regulations-jt7useg-182755581.html