Court Opinion

ID: 9742834
Source: CourtListenerOpinion
Date Created: 2023-08-26 21:21:24.532898+00
Date Added: 2024-06-11T07:24:37.103657
License: Public Domain

LOUIS B. BUTLER, JR., J.
¶ 91. {concurring). I join the opinion and mandate of the court. I write separately to add that which needs be said: charging 300 percent interest for a short-term loan to those who *561can ill-afford it is ridiculous, unreasonable, and unconscionable. Wisconsin citizens deserve better.
¶ 92. Proponents of companies that provide auto title loans insist that the companies are providing a necessary service and taking on a risk that no other lender will take on. They assert that if they did not provide these loans, substantial numbers of people will be unable to obtain a loan. They also assert that the high interest rate is the only way they can afford to take the risk. These lenders claim they are the only option for debt-strapped consumers.
¶ 93. While these lenders may be the only option for debt-strapped consumers, they are not a reasonable option. Auto title loans are so expensive that they drive many people deeper into debt. In addition, auto title loans are secured by the consumer's automobile or truck. Lenders often, as the lender did in this case, actually keep an extra set of keys to the vehicle — and may take possession of a vehicle if a borrower is delinquent in making one payment. If a payment is missed, the lender can start the process of taking the borrower's vehicle, resulting in a loss of transportation to work and to obtain health care.
¶ 94. Predatory lenders exploit borrowers through excessively high interest rates. Consumers who must borrow money this way are usually in desperate debt. These lenders target low-income consumers, individuals with stained credit scores, and those in society who cannot access traditional sources of money and credit. The high rates that predatory lenders charge make it difficult for borrowers to repay the loan, resulting in many consumers being driven onto a perpetual debt treadmill. Essentially, the predatory lender sets the borrower up to fail.
*562¶ 95. We have held that a sufficient quantum of both procedural and substantive unconscionability exists to render the arbitration proceeding in this case invalid, and remanded the matter to the circuit court for further proceedings on Wisconsin Auto Title Loans' replevin action and the borrower's answer and counterclaims. Nevertheless, the legislature can put an end to this practice in future cases by capping auto title loans at an annual percentage rate it determines to be reasonable. Anything less short-changes the public. I urge the legislature to act now to protect the citizens of this great state.
¶ 96. For the foregoing reasons, I respectfully concur.
¶ 97. I am authorized to state that Justice N. PATRICK CROOKS joins this concurrence.