Credit unions and banks in Wisconsin together urged Governor Scott Walker to veto a part of the state's budget that could have, they said, sharply increased the numbers of services the state's payday lenders could provide.
Walker, who announced a bid to win the Republican Party's presidential nomination this morning, signed the budget bill yesterday and vetoed the provision.
"As written, (the provision) creates an unlimited scope of authority for payday lenders not given to any other financial institution," a coalition of Wisconsin credit unions, banks, insurers and manufacturers wrote in a July 9 letter to Walker. The coalition included The Wisconsin Credit Union League, the Wisconsin Bankers Association, the Wisconsin Insurance Alliance, the Wisconsin Council of Life Insurers and Wisconsin Manufacturers and Commerce.
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"It permits payday lenders to engage in any business they wish as long as they obtain a license, if one is necessary," The coalition continued. "The public policy issues created by this unlimited expansion of authority deserve thoughtful consideration that could not be given in the context of the budget process. No other financial institution has that kind of unlimited authority."
The coalition also cited conflicting language within the provision, and argued the language led to confusion in regard to what payday lenders could do and how the provision would mesh with other parts of Wisconsin law.
In a statement he issued after vetoing the provision, Walker highlighted some of the coalition's concerns, although he did not specifically name them.
"I am vetoing these sections because the expanded scope of business provided for payday lenders is overly broad and significantly exceeds that of any other financial institutions," Walker wrote. "In addition, the expanded scope could create regulatory ambiguity and consumer uncertainty. Changes of this magnitude should be addressed as separate legislation where the implications can be more carefully explored."
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