Fewer Wisconsin residents are losing their cars to repossession, according to data from the state Department of Transportation, provided in response to an open records request from state Rep. Gordon Hintz (D-Oshkosh). The number of auto title transactions between financial institutions and individuals fell to 10,877 last year from 14,442 in 2010; however, the number of transactions involving auto title lenders, specifically, only declined to 2,680 from 2,898.
The presence of title lenders in Wisconsin is a source of controversy, due to their business of targeting low-income customers who need immediate cash. Wisconsin Auto Title Loans, the state's largest player in the niche, charges a 295.65 annual percentage rate (APR) on the average $710 loan -- which, though high, is significantly lower than the average charged for a payday loan. Data compiled by the Department of Financial Institutions found that the average APR for a payday loan in Wisconsin in 2011 was 581.14 percent.
Consumer advocates have pushed for car title lending to be banned in Wisconsin and for interest-rate caps to be implemented. Payday lenders are prohibited from "rolling over" loans, which involves getting a customer who cannot pay a loan to take out another, but this prohibition does not apply to auto title loans. According to the Center for Responsible Lending, Wisconsin is one of only 13 states that allows title lending with no interest-rate cap.