Voters Approve Payday Lending Rate Cap
Three in four South Dakota voters say the state should cap payday lending interest rates. Initiated Measure 21 garnered support from 270,278 people.
Steve Hildebrand owns a coffee shop in Downtown Sioux Falls. Customers who visited him Wednesday offered him congratulations with their orders.
Hildebrand has campaigned in favor of limiting the interest rate payday lenders can charge. He says a coalition of churches, groups, and concerned citizens support the move.
"I think people know that low-income people shouldn’t be preyed upon by predatory lenders. You know, we have a very large low-income population in South Dakota, and it’s why there’s 130 predatory lenders across the state," Hildebrand says. "But when you’re charging 574 percent interest on loans to people who can’t afford 20 percent interest, you know, you had to do something. We had to stand up and do what was right. So I think the idea that this is regulating business kind of went out the window, and [voters] said consumers have to be protected from these predators."
Hildebrand says people from both political parties must develop solutions for other abusive business practices.
Two measures this election dealt with payday lending rates. Initiated Measure 21 passed. Constitutional Amendment U failed. That effort sought to limit interest rates at 18 percent for verbal short-term loans, and voters rejected it.
South Dakota Pubic Broadcasting reporters have tried to contact people against capping rates in the payday loan industry. They have not returned calls.
Listen to Wednesday's special edition Dakota Midday segment on ballot initiatives with SDPB's Lee Strubinger and Kealey Bultena. Political Junkies Seth Tupper and Denise Ross expand upon more.