NEWS BLOG (WSAU) I’d beg, borrow or steal before I’d patronize a payday loan store. Actually, I have some relatives who are well-off, and, although it would be embarrassing I’d ask them for money first. Of course not everyone has rich relatives. There obviously is a market for payday loans since there are so many loan stores.
The terms are lousy. The business practices are unethical. And, in its wisdom, the state legislature decided this industry needs additional regulation. The legislature had long-running debate. They heard from consumers who feel ripped off. They heard from the payday loan industry, and their lobbyists. And through the normal give and take of the legislative process a bill was passed.
The bill that was sent to Governor Doyle was a compromise. Consumer advocates wanted a cap on interest rates. They didn’t get it. The payday loan industry wanted to kill the bill in committee. They couldn’t do it. The final agreement called for limits on how much people could borrow, how often those loans could be rolled over, and a limit on car title loans.
Car title loans would be limited for up to 50-percent of a car’s book value. And that figure was important, because it would be difficult to repossess a car that represented less than half the collateral on a loan. The compromise would still keep title loans as an option for people who needed the money, and would reduce the chances that they’d lose their car if they defaulted.
All in all, this was a reasonable deal between rival factions in the legislature… until Governor Doyle used his line-item veto. The Governor issued a ‘Frankenstein veto’ lining out some sections of the car title provisions. As the bill reads now, car title loans will be illegal in Wisconsin.
This is the latest example of the Governor abusing his veto power. He did it before to raise the school district tax limit. His abuses of the line item veto in the budget process two years ago led to a constitutional referendum. Now the governor cannot line out certain words, letters, or numbers. You recall in the school funding debate the governor strung together digits from the appendix of the bottom of a page to create the amount that school taxes could be raised.
My own opinion is that these abuses should be challenged in court as a violation of separation of power. The legislature makes the laws. The governor decides if he will sign or veto them. For the governor to have the power to change the meaning and amounts in a bill is a power that’s reserved for state lawmakers. But the courts haven’t reigned in this abuse yet. Until then, it’s up to the office-holder to show restraint. Jim Doyle hasn’t.
The abuse of the line-item veto sends a horrible message about Wisconsin’s business climate. Companies and industries that have business before the Legislature can lobby, persuade, influence, and negotiate… only to have bits and pieces of a compromise undone by the line item veto. Business leaders now know if you don’t have a deal with the Governor, you don’t have a deal.
No one cares about this specific case. The payday loan industry are considered blood-suckers, and many people are happy their deal got undone. But the Governor can use the same power for environmental law, transportation policy, tax policy, and any number of other things that impact companies that do business here. And the precedent that Jim Doyle has set will be followed by others who hold his office.
Operations Manager-Midwest Communications, Wausau