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Payday loans in Wisconsin

No maximum interest rate before maturity — among the most expensive states in the country. But post-maturity interest is prohibited, so the balance stops growing once the loan is due.

2009 Wisconsin Act 405

No cap before maturity. But interest stops the day the loan matures.

Wisconsin law does not establish a maximum rate of interest before a payday loan’s maturity date.Wisconsin · Legislative researchWisconsin Legislative Reference Bureau, Payday Loans in Wisconsin — unlike some other states, Wisconsin law does not establish a maximum allowable rate of interest before a payday loan's maturity date, but state law does require lenders to comply with other requirements Pew put the cost of borrowing $300 here at roughly $660, about 574% APR.

What Act 405 did instead was prohibit post-maturity interest — so once the loan is due, the balance stops growing.Wisconsin · Legislative recordWisconsin Blue Book — Act 405 (SB-530) prohibits a lender that is not a financial institution from making a payday loan to a Wisconsin resident unless licensed by DFI, and regulates payday loans by limiting loan amounts, prohibiting post-maturity interest, and requiring disclosures about rolling over, rescinding, and repaying payday loans

That is a different lever again. Delaware limits frequency, Nevada limits size against income, Wisconsin lets the price run free but stops the clock at maturity.

The licensing rule follows the borrower, not the lender

A non-bank lender may not make a payday loan to a Wisconsin resident unless licensed by DFI — and the Act applies regardless of whether the lender is physically located in the state.

A payday loan here means a consumer loan with a term of 90 days or less. DFI maintains a database, and lenders must verify that your aggregate payday loan balance stays within the permitted amount.

Three disclosures you are entitled to

Act 405 requires lenders to give borrowers notices about rolling over, rescinding, and repaying payday loans.

The rescission notice is the one to look for. If it is not in your paperwork, that is a compliance question for DFI — and it may mean you have a right you were never told about.

And a limit on what they can take as security

The Act prohibits certain loans secured by motor vehicles — other than loans to purchase a vehicle — where made by lenders that are not financial institutions.

If a short-term lender has asked for your car title as collateral, check whether that is lawful before signing.

Rate cap before maturity
None.
Post-maturity interest
Prohibited. The balance stops growing at the due date.
Definition
A consumer loan with a term of 90 days or less.
Licensing
Required for non-bank lenders, whether or not located in Wisconsin.
Database
DFI maintains one; aggregate balance is checked.
Required disclosures
On rolling over, rescinding and repaying.
Vehicle security
Certain loans secured by motor vehicles are prohibited for non-bank lenders.
Reported cost
About $660 to borrow $300, roughly 574% APR, per Pew.
Regulator
Wisconsin Department of Financial Institutions
Statute
2009 Wisconsin Act 405 (SB 530); Wisconsin Consumer Act

If money is being taken from your account

You can revoke authorisation and instruct your bank to stop the payment, whatever your agreement says.

What Regulation E says about automatic payments →

Debt-collection law in Wisconsin

A payday loan is a consumer debt. If it goes unpaid, two Wisconsin rules decide what a lender can do next: how long it has to sue you, and how much of your pay a court can order taken.

Being sued over an old payday loan? A collector can still file, but the time limit is a defence you can raise — and you cannot be jailed for the debt. What can and cannot happen if you don’t pay →

Sources. Wisconsin Legislative Reference Bureau, Payday Loans in Wisconsin. Wisconsin Blue Book summary of 2009 Act 405 (SB 530). Pew Charitable Trusts, How State Rate Limits Affect Payday Loan Prices.
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