Sightings of the creature were reported in the Rice Lake area over a period of time. Pictures of its tracks were sent to the WI Dept. of Natural Resources (DNR). Numerous people reported seeing it on their early morning walks and each time the DNR said they needed more evidence.
Eventually a group of citizens stood under a tree, along with an employee of the DNR. Some great pictures were taken. That a predator was among us could no longer be denied. There it was, lurking on a branch ready to pounce.
Predators stalk. They watch and lurk, seeking the most vulnerable among us. They creep and pounce when opportunity arises. And not all predators live in the animal kingdom.
Some stalkers live amongst us, extracting our economic assets and sending them out of state and country. They seek those of us in a pinch and attack when we are most vulnerable.
Travel through any mid-sized city in western Wisconsin and you will observe payday lending storefronts lurking on Main and Broadway. They wait to pounce on the unsuspecting in the malls tucked between the shoe store and the laundry.
Payday lending businesses began appearing in Wisconsin only ten or fifteen years ago. So if you have a good paying job, pretty good luck, and a good relationship with a bank or credit union, you may not be familiar with these relatively new fixtures of America’s downtowns. They offer short-term loans at extremely high interest rates, which the borrower will likely not be able to repay on time. However, the loan is designed to roll over, continuing the contract and the interest rate on and on. The interest and fees charged the consumer quickly escalate to the point where people cannot pay the interest much less the principle on the loan. When the loan contract is written, the lender takes the borrower’s paycheck as collateral. In this way they can legally, if the loan is not paid on time, take their loan payment directly from the borrowers paycheck. The borrower’s purchasing power is from then on drastically reduced.
Wisconsin is one of only eight states that have no ceiling on what the payday lender can charge as an interest rate. When reporting on the payday lending issue, Wisconsin Public Radio on June 9, 2016 reported, “In 2015, the average annual interest rate on payday loans in Wisconsin was … 565 percent, according to the state Department of Financial Institutions. A consumer borrowing $400 at that rate would pay $556 in interest alone over about three months. There could also be additional fees.”
Too often people become trapped in payday loan operations because an unexpected bill exceeds any personal cash reserves. CBS recently reported that, “Despite the stronger economy, a lack of emergency savings that would help them weather an unexpected expense such as a health crisis or car breakdown remains a serious handicap. In fact, about 63 percent of Americans say they're unable to handle a $500 car repair or a $1,000 emergency room bill…” (January 6, 2016.)
Desperation leads to fewer choices and options. With a shrinking middle class and with many more working in low wage jobs, more and more people are forced into the arms of these legalized loan sharks. This leads to a growing number of citizens living on the edge. They get up every day and go to work but still cannot make it financially. A good portion of their paychecks is sent immediately out of state, so their communities suffer as well.
Banks and credit unions have little incentive to provide a loan for a person needing cash immediately. There is certainly a need for quick, short-term loans and few can argue that in an emergency we need access to cash. The question becomes -- does it serve our state, our local communities or individual citizens when a class of business is allowed to charge a predatory 565% interest rate?
The beast of prey has been allowed in, we have seen it and ignored it. It is right there in front of us. Will we continue to ignore this predator? Do we think it’s the natural order of things for the weak to suffer? Or do we act together to reestablish rules of civilized lending practices as one way to begin reviving the great American middle class.
In my next column I will look to a historical reaction to a real problem that affected our great grandparents. Our state government proposed a solution and it was successful. There are times when thinking out of the box will produce productive results. And our governmental officials must be asked to leave their ideological and political bunkers to do so.
This column was originally published in the July 2016 edition of The Hay River Review.
If you believe that regulations are needed to halt predatory payday loans in our towns follow this link and let your opinion be known: http://stoppaydaypredators.org/CAW/
Joe Plouff lives his retirement years in the Prairie Farm area. He is the author of columns on public policy and politics relating to his experience serving on city councils, in the state legislature and on a local county board. A version of this column originally appeared in the Hay River Review. You may read other columns he has written at his website: joeplouffpolicyandpolitics.wordpress.com.