Zepnick Supports Consumer Protection Policies That Lessen Predatory Lending

MADISON – State Representatives Josh Zepnick (D-Milwaukee) supports Citizen Action of Wisconsin in highlighting the federal proposal by the Consumer Financial Protection Bureau (CFPB) to nationally regulate the payday and car title lending industry. There are currently no restrictions in Wisconsin preventing these lenders from gouging customers with high interest rates and trapping them in a perpetual cycle of debt.

“Consumer protection is critical in all areas of industry”, said Zepnick. “People should have peace of mind that when they borrow money or buy a car they aren’t being unfairly exploited”.

According to the CFPB, payday loans often carry an average annual interest rate of over 300%. The ability of consumers to pay back the loans are also not required to be taken into consideration by the lender. “Interest rates should be capped at the federal level and structured so that each monthly payment reduces the outstanding balance”, added Zepnick. “No consumer should hold a credit balance from these predatory lenders for longer than five years”.

Rep. Zepnick was a lead author on a package of bills in 2009 and 2010 that prohibited predatory lenders from making or offering motor vehicle title loans, limited borrowers to one open payday loan at a time, and limited where payday stores could be located. These bills were passed as Act 405 by then Governor Doyle.

The need for federal legislation is critical as many of the regulations passed during the 2009-2010 legislative session have since been repealed by the current administration. “These proposed CFPB regulations would protect Wisconsinites and provide safety to otherwise potentially vulnerable individuals”. “We would like to thank Citizen Action of Wisconsin for their work in drawing attention to this issue locally”.

The CFPB proposal is currently in the midst of a 90-day public comment period which ends October 7^th.

NOTE: This press release was submitted to Urban Milwaukee and was not written by an Urban Milwaukee writer. While it is believed to be reliable, Urban Milwaukee does not guarantee its accuracy or completeness.