Home / News / Wis. Supreme Court takes payday loan case

Wis. Supreme Court takes payday loan case

MADISON, Wis. (AP) – The state Supreme Court has agreed to decide whether state law permits judges to determine when payday loan interest rates are too high.

The court will consider whether state statutes block judges from determining if a particular interest rate is unconscionable and, if they don’t, what evidence would prove rates are too high.

The case stems from loans Jesica Mount of Onalaska secured from Payday Loan Stores of Wisconsin Inc. in 2008. According to court documents, annual interest rates on the loans varied from 446 percent to 1,338 percent.

The loan company filed a lawsuit against Mount after she failed to make her payments. Mount filed a counterclaim alleging the loans violated the Wisconsin Consumer Act because the rates were unconscionable.

More on the payday loan case


  1. The part of the lawsuit that is egregious is the “unconscionable” interest rate that would “shock the conscience of a jury or judges.” Obfuscated from the published NOMINAL, SIMPLE-INTEREST (SIAPR) method of calculating the Annual Percentage Rate (APR) in lending, is the mathematically-true, Compound APR that is used in savings in the Truth in Savings Act (TISA) of 1991. The Truth in Lending (TILA) Act of 1968 uses the Mathematically-Untrue, Nominal [TILA Appendix J(b)(1)], Simple-Interest method: multiplying the rate for a unit period for the number of unit periods in a year. TISA uses the mathematically-true, compound method: compound the rate for a unit period by the number of unit periods in a year (which I will acronym: CAPR). The word “Nominal” in Black’s Law dictionary and Webster’s Dictionary is defined as “not real or actual,” so you are warned that TISA is not true. Only the “Short Title” in TISA uses the word “truth.”. The Nominal “not-real-or-actual” SIAPR on Mount’s loan for giving a 6-day post dated check for $122 to receive $100 is the 1338%, calculated as (using Excel notations) ((122-100)/100)*(365/6)*100 = 1,338.333%. The mathematically-true CAPR (used in TISA) is 17,928,912.336%, calculated as (using the Excel symbol for compound, ^) ((((122-100)/100)+1)^(365/6))-1)*100. TILA allows for other method than the SIAPR to be used if the accuracy in kept. Not only does the CAPR maintain accuracy, it greatly increases it. TILA allows for an inaccuracy is expressing the APR of one eight of one percent (0.125%). Not only is the financially-untrue SIAPR slightly over one of the tolerances, it is 143,420,592 of those tolerance of 0.125% from the CAPR, calculated as (17,928,912.336%-1,338.333%)/0.125%.
    If a person were asked what their saving account pays, they might say 1.5%, If you ask them would they take out a loan for 18,000,000 percent, undoubtedly he or she would say absolutely not. Mount was certainly not asked.

  2. Error: In the above, on lines 9 & 10, change “TISA” to “TILA”

Leave a Reply

Your email address will not be published. Required fields are marked *