March 02, 2010 -New York, New York — Payday loan companies know that they are in trouble with new legislation that has been passed, such as the CARD Act of 2009. Interestingly enough, payday loan companies have donated more than $28,000 to fundraising committees, all the while the Wisconsin state Legislature was contemplating over a bill that would create tighter restrictions around payday loans. The proposed bill would place a strict 36 percent interest rate cap on payday loans to discourage taking advantage of clients. Payday loans in most states do not have a cap and the percentage rate can reach into the hundreds.
The bill at one time in Wisconsin was wildly popular but since the donations, the bill has quietly died out on support. Many believe that this is not a victory for payday loan companies while others believe that the industry is trying to pay its way out of trouble illegally. Last summer when this bill was introduced, there was an approval of 58 Republicans and Democrats. Those who signed on, have apparently dropped out little by little. One of the people in question is the Assembly Speaker Mike Sheridan.
Sheridan’s actions, personal relations and timing have all been suspicious and judged by many since he has spoke out against a bill he believed firmly in and has received donations shortly before and after. There have been at least 16 payday lending companies and groups who have spent over $669,000 in lobbying lawmakers.
A payday loan is a short term loan that is paid back upon the borrower’s next paycheck. Josh Jackson, Spokesperson for PaydayRate says, “The payday lending industry is in problems so they are trying to find any solution to their tumultuous problem.“ Such donations were made to the majority party of the assembly, the democrats.
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