Two months ago, I wrote to Rep. Gordon Hintz, the Chairman of the Wisconsin Assembly’s Consumer Protection Committee about payday loans. Hintz had piled on the 36% APR rate cap bandwagon and, in a misguided effort to educate him on the facts about payday loans, I offered the mountains of evidence to show why this was a mistake.

He has ignored me, and continued with his crusade to kill 3,462 Wisconsin jobs, suck $135 million in labor income out of those jobs, wipe out $214 million in Gross State Product, and deprive Wisconsin of $59 million in state tax revenue.

Holy Cow! Talk about a lousy bill!

As I’ve pointed out in many columns, a 36% rate cap is not only a ban on payday loans (and therefore kills those jobs), but harms the very consumers Hintz believes he is protecting. However, I decided I would give it one last try. Usually, when someone starts jumping up and down about a 36% rate cap they are either 1) confused about the facts, 2) have had some kind of unrepresentative personal experience with PDLs, or 3) are driven by mercenary tactics they will directly profit from, or 4) are ideologues with no interest in the facts.

So address all these possibilities.

Here’s the facts:

A 36% rate cap is lunacy.

Here’s why it harms consumers.

Here’s a litany of NON-PARTISAN studies that repeatedly show the benefits of payday loans, and the disasters caused when they are banned.

Perhaps Rep. Hintz has had a personal experience. Perhaps someone in his family took out a payday loan from an operator who was dishonest, who didn’t provide the proper federal disclosures, who didn’t allow a payment plan for a late loan, or who dinged the person multiple times for a bounced check. In that case, we have an isolated incident of a bad apple. Bad apples exist in every industry.

However, banning the entire industry is the equivalent of treating dandruff with decapitation. More on that in a moment.

Perhaps the family member was the irresponsible party. Perhaps the lender was 100% honest. In that case, Rep. Hintz should concentrate on consumer education, not a ban. More on that in a moment, as well.

Could Rep. Hintz have an ulterior motive, one designed to benefit himself? When it comes to politicians, many of them love to grandstand — disgracing themselves, the community they allegedly serve, and often harming the people they purport to protect. So far, based on my research, Hintz doesn’t appear to fall into this category. In fact, he sponsored AB 265, which provides intelligent consumer protections for Refund Anticipation Loans.

He may be an ideologue, but I’m not ready to condemn him just yet. I think he may still be confused about the facts or had a personal experience.

Nevertheless, his bill to cap payday loan rates at 36% makes him a Job Killer — in an historic recession, no less.

My message to Rep. Hintz: there is a wide gap between Wisconsin’s currently unregulated PDL environment and a complete ban. You wisely instituted proper RAL reforms without banning those, so why the Job Killing stance on PDLs?

Go have a look at the law South Carolina passed earlier this year. Advance America, the largest payday lender in the country, broke ranks with the rest of the industry and supported the law. That should tell you something. It should tell you that it represents a Centrist position on the issue and, if you did your research, is designed to push out the industry’s bad apples. I personally believe it was just a tad too restrictive, but reasonable minds can differ. At the very least, the legislation is pragmatic in that it didn’t rob the state of state of income, kill thousands of jobs, and harm consumers the way Hintz wants to.

So, will Gordon Hintz forever be known as the Job Killer of Wisconsin, or can he come to his senses and enact sensible legislation?

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