MADISON, Wis. — Wisconsin lawmakers recently altered a measure that now greatly regulates the use of auto-title loans. The bill that passed through the state legislature and the governor's office stipulates that vehicles can only be used as collateral for a purchase, not "payday" style of short-term consumer loans.

The law officially goes into effect Dec. 1.

Various published reports throughout Wisconsin indicated the state was one of the few remaining that didn't heavily regulate these kinds of short-term loans.

Initially, auto-title loans were not included in the bill. However, Gov. Jim Doyle used his partial veto power to change the measure, which passed through the State Assembly by a vote count of 72-55.

By and large, state lawmakers want to curtail what they described as predatory lending practices, believing auto-title loan originators fell into that category.

"We must ensure that the people of Wisconsin can access emergency capital without being forced into a cycle of debt or wiping out their financial futures. Comprehensive, effective regulation that both prevents abuses and eliminates the cycle of debt is the best way to help Wisconsinites maintain a strong financial footing," state Sen. Jim Sullivan, one of the original authors of the bill, wrote in a blog posted online through the Web site WauwatosaNOW.

But the new law evidently will greatly affect the prospects of companies such as American General, Riverside Finance and Security Finance. A published account in The Journal Times of Racine, Wisc., shared the bleak outlook for Motor Credit Corp., an independent operation that generates 65 percent of its business from auto-title loans.

Motor Credit vice president Charlie Buhler told the newspaper there's a vast difference between installment lenders and very short-term, high-rate auto title lenders.

"We're not a predatory lender," emphasized Buhler, who added Motor Credit makes one- to five-year loans at interest of 15 percent to 24 percent with the vehicle title as collateral.

Buhler went on to explain Motor Credit's niche is to make loans too small for banks. He pointed out that during a bad year, the company might have 12 to 15 repossessions, but only about six of them annually are typical. He also noted that every effort possible is made to help the client maintain the payment plan so repossession can be avoided.

Buhler worried the new law could halt the business started by his grandfather more than 50 years ago. And he didn't think it would benefit residents of Wisconsin much, either.

"It's going to affect consumers in the way they obtain money, and it's not going to help them," Buhler declared.

Nonetheless, Wisconsin's governor remained steadfast about his decision.

"I believe that auto-title loans are an example of some of the worst predatory lending practices," Doyle declared in his veto message posted on his website.

"Auto-title loans can result in individuals losing their vehicles due to failure to make timely payments on relatively small loan amounts, putting at high risk an asset that is essential to the well-being of working families," the governor went on to say.