Payday loan companies are one step closer to becoming regulated after a Senate committee passed a bill Wednesday meant to crack down on the industry.

Payday loans are small, short-term loans borrowers then promise to repay out of their next paycheck. Wisconsin is currently the only state in the U.S. that does not regulate the industry.

The bill, written by Sen. Jim Sullivan, D-Wauwatosa, would limit loans to $1,500 and restrict payday lenders from establishing themselves within 1,500 feet of another lender or within 150 feet of a residential area. The bill would also restrict borrowers from rolling over loans to a later pay period more than once. Sullivan said this practice causes consumers to fall deeper into debt, leading them to pursue more payday loans meant only to pay off the old ones.

While speaking at a public hearing last month, Sullivan said the industry’s current practices were concerning. The industry does serve a market need, expecially for families with financial difficulties, but that does not mean Wisconsin can ignore abusive practices and allow them to continue.

“We as a state cannot allow these predatory practices to continue” Sullivan said. “The number of payday loan institutions has gone up from 346 in 2004 to 548. This is an industry that feeds off of a viscous cycle of debt, and I believe that reform is only answer.”

The Assembly already passed their own version of the bill, which limits loans to $600, prohibits any rollover of loans and bans auto title loans.

The Senate bill was passed with both Democratic and Republican support on the committee, with a vote of 3-1, and is being hailed as a bipartisan effort.

The two houses have until April 22 to come to a compromise on the two bills, or reform will have to wait until next year. The Senate bill has not found unanimous support, however.

Bruce Speight, director of Wisconsin Public Interest Research Group, said the bill does not go far enough and would only slow effort for real reform.

“The single most effective way of combating the practices of this industry is to institute a rate cap, and it is in neither bill” Speight said, referring to is the annual percentage rate at which money can be borrowed.

Speight expressed concern, as Wisconsin is the last state to not have any reform of the payday loans industry, and 15 states have already passed a rate cap.

“Consumers in Wisconsin deserve the same protections that consumers in other states have,” said Speight. “Trapping borrowers in debt and gouging them with predatory loan products is unacceptable in Wisconsin, and a rate cap should be put in place for Wisconsin consumers.”

WISPIRG is a lobbying organization which, according to its official website, prides itself on standing up to special interests and protecting the citizens of Wisconsin.