Voters will shape the scope of short-term loans in the general election this fall.

Initiated Measure 21 is a ballot issue that aims to cap interest rates on payday or car title loans at 36 percent. Steve Hildebrand who co-chairs the group South Dakotans for Responsible Lending feels that both sides can still benefit at their proposed number.

“We use the 36 percent as a number that seems fair for both sides. A person could get a loan repaid but a lender could still make a high risk loan and still be able to operate.”

Hildebrand says their number coincides with a rule that limits what payday lenders can charge military members.

“About 20 years ago, too many military families were deep in debt because of these payday loans. They effectively couldn’t go serve their country because they were so tied up in debt that they had to stay home (to fix the problem). Now there’s a 36 percent rate cap so (payday lenders) have effectively left military personnel alone.”

According to Hildebrand, other states have either invoked similar rate caps or have gone so far to ban this type of lending altogether.

Currently Secretary of State Shantel Krebs is considering petition challenges for Initiated Measure 21 as well as the opposing Constitutional Amendment U. The challenges were submitted soon after the petitions were filed.

Up to ten different ballot issues will be decided by voters on November 8.


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