MADISON, Wis. (5/27/11)--A rule implementing a Wisconsin law that regulates payday lenders and establishes uniform rules for them will go into effect Wednesday, according to the State of Wisconsin Department of Financial Institutions (DFI). The Wisconsin Legislature created the 2009 Wisconsin Act 405, requiring the DFI's Division of Banking to regulate the sector. The rule aims to establish clear standards and requirements for the payday lenders, including notice of repayment guidelines and other protections for their customers. It also defines database requirements for the secure entry, retention and transmission of customer information, said the DFI. DFI said the rule:
* Defines the type of loans covered and notice as to what practices are prohibited; * Provides the industry with clear, itemized requirements for disclosures, repayment plans and standard calculations for income determination; * Provides for safe and secure transmission of payday lending transactions into a database; and * Addresses permissible fees and default matters.
The statutes and the rule include many consumer protections such as requiring that the loan agreement disclose repayment options, the 24-hour right to rescind the loans, and a limit of one rollover per loan. To view the rule, use the link.