SIOUX FALLS (KELO AM) - State officials and the Payday Loan industry of South Dakota are at odds concerning capping interest rates at 36-percent.
A title loan company is asking a circuit court judge to force South Dakota Attorney General Marty Jackley to rewrite ballot language that would impose a cap on interest rates charged by money lenders.
South Dakotans for Responsible Lending must collect 13,871 signatures of registered voters by November 2016 to qualify for the ballot. Jackley's office approved language last month for the measure that would educate voters on what would happen if it passed.
The complaint argues that Jackley's description of the measure fails to inform voters that the payday lending industry would collapse if the 36 percent limit is adopted by voters. It notes that a 36 percent limit would not be enough to cover the expenses related to issuing loans.
Representative Steve Hickey introduced language in February to put the issue on the ballot. He recently said that the industry is circulating what is called a decoy petetion. Hickey said that can sign their lives away for an 18-percent loan but the industry can charge what they want to.
Hickey said the real ballot measure caps the rates at 36-percent. We have to face it, high interest rates cause a cycle of debt.
This was the topic of discussion on the Greg Belfrage Show and can be heard at: http://kelo.com/podcasts/greg-belfrage-show/935/will-capping-interest-rates-destroy-payday-loan-industry/