In a press release supporting Consumer Financial Protection Bureau payday lending rules, Rep. Gordon Hintz, D-Oshkosh, recently re-elected in the state Assembly’s 54th District, said Wisconsin’s Predatory Lending Consumer Act isn’t enough to protect consumers from predatory lending practices. He said while payday loan numbers are lower since the act was passed in 2010, changes made by Republicans in 2011 have caused the number of similar so-called installment loans to go up.
There are three parts to Hintz’s claim. First, he said that in Wisconsin, “After the law was passed, the number of payday loans dropped to 201,461 in 2012 from 1,686,734 in 2008.”
Second, Hintz said, “The number of unregulated installment loans jumped from 353,870 in 2008, to 858,741 in 2012.”
Third, Hintz claims that when Republicans changed the law in 2011 to apply only to loans of 90 days or less, the industry responded by switching to similar loans of 91 days or more.
In an email, Hintz provided a report from the Wisconsin Department of Financial Institutions, Loan Company Annual Reports, which contained the number of payday loans and unregulated installment loans since 2008.
The number of payday loans Hintz claimed there was in 2012 and 2008 match the report. According to the Wisconsin Public Interest Research Group, the average payday borrower in Wisconsin takes out a loan of $320, racking up $866 in finance charges at an average annual percentage rate of 589 percent.
The number of unregulated installment loans Hintz claimed there was in 2008 match the report, but the actual number of those loans in 2012 was 878,741 — 20,000 more than Hintz claimed.
Hintz said the discrepancy was due to a typo. Had he reported the actual, higher number, it would have benefitted his claim so this misreport doesn’t change the general accuracy of the claim.
The DFI report shows that after Republicans changed the law in 2011, the number of installment loans jumped from 496,297 in 2010 to 678,456 in 2011. The most recent figures available show 761,781 installment loans were issued in 2015.
The Observatory has three separate rankings on the Veritas Scale for Hintz’s claim. The claim, “After the law was passed, the number of payday loans dropped to 201,461 in 2012 from 1,686,734 in 2008,” is verified.
The claim, “The number of unregulated installment loans jumped from 353,870 in 2008, to 858,741 in 2012” is mostly true because of the 20,000 difference in numbers.
Hintz’s statement that the change in the Predatory Lending Consumer Act in Wisconsin prompted the number of unregulated installment loans to increase is verified.
Press release from Rep. Gordon Hintz, D-Oshkosh. Oct. 5, 2016. http://www.thewheelerreport.com/wheeler_docs/files/1005hintz.pdf
Emails from Rep. Gordon Hintz, D-Oshkosh.
“Gordon Hintz.” Ballotpedia. https://ballotpedia.org/Gordon_Hintz
“Loan Company Annual Report.” Wisconsin Department of Financial Institutions.
“Stop Payday Predators.” WISPIRG. http://www.wispirg.org/sites/pirg/files/reports/WISPIRG%20Fdn.%20Wisconsin%20Payday%20Fact%20Sheet_5.17.16.pdf