Car Title Loans Banned in Wisconsin

The governor of Wisconsin has made a move that was surprising to say the least: he completely banned the use of auto title loans in the state. This is a move that was prompted after years of in-fighting throughout the state leaders over the regulation of the auto title lending industry. In an out of character move, the governor used his partial veto power to rewrite the legislation that was placed before him recently.

Auto title loans are popular in many states. They work much in the same way as a payday loan. A consumer in need of some fast cash could take the title to their car into the establishment and receive a cash loan against it. A lien would be placed against the title until such time as the loan plus interest was repaid.

The problem that the lawmakers had with the business was the fact that interest rates were soaring. This is the same issue that was faced by the payday loan industry that prompted the loan sharking lawsuits several years ago. Lawmakers stepped in attempting to reach some kind of deal on legislation.

However, a compromise was not an easy task. While the industry is not well received in most areas it has become a way of life for some people who needed money to bridge the gap between paydays. The governor had little sympathy though in saying “Auto title loans are the worst kind of predatory lending.”

Several lawyers from around the state that represent the auto title lending industry have already started lawsuits. They are hoping that a favorable verdict will be able to reverse the governor’s decision and allow for the new compromises that were recently reached in the state house to take effect without allowing for a complete and total ban on the business.