Statement from Steve Hickey on the Success of Initiated Measure 21

hickey says he "could not be prouder of the coalition we built."

"For starters I want to communicate that our coalition does NOT disband today. We aim to work together in the days ahead to see healthier lending alternatives develop that are good for all.

"We believe in responsible lending and doing things that actually help people. You will see us around and hear our voices during future legislative sessions working on various measures yet to be passed, like trying to get programs for financial literacy more widely available in our state. And we anticipate the need to be vigilant to ensure the payday/title loan industry doesn’t try again to sneak something through the legislature.

"I could not be more proud of the coalition we built. It’s actually remarkable and probably unprecedented for South Dakota to have the political left and right working closely together on a measure and to have the religious left and the religious right working together. Women and men, old and young, and rich and poor made up our supporters. They had a half a million in television ads. We had church ladies going out with sidewalk chalk. They had yard signs. Our people painted pumpkins with our message. It’s good South Dakota people of every flavor who are sick of the poverty industry taking advantage of our low wage state.

"This has been a pennies on the dollar grassroots South Dakota effort and it doesn’t get anymore bi-partisan than Steve Hildebrand and Steve Hickey working side by side on behalf of the poor and elderly in SD. Knowing that today in America we have reached perhaps the apex of hyper-partisanship, our efforts here of working together across the party lines is really a breath of fresh air and we believe this is the way forward in SD politics and that what we are modelling on this issue is something you’ll see more of in the future."

Press Release: South Dakota Citizens Run Off Out-of-State Predatory Lenders


36% interest rate cap becomes law of land in hard-fought payday lending ballot measure battle

SIOUX FALLS, SD – Today, South Dakotans voted overwhelmingly to pass Initiated Measure 21, which caps annual interest rates at 36% for payday, car title and installment loans. Voters also resoundingly rejected Amendment U. Amendment U—a prohibition against rate caps—was designed to appear to cap interest rates at 18%, but would not have applied to written agreements, so was no cap at all. It was supported by the payday lending industry.

South Dakotans for Responsible Lending, a bipartisan coalition that has been working together to reform payday lending in the state for two years made the following statement:

We are thrilled that the people of South Dakota stood up and said ‘enough’ to the predatory lenders who have been trapping hardworking families in debt at 574% interest rates.

South Dakota will become the fifteenth state plus the District of Columbia to rein in predatory lending by passing an annual interest rate cap on payday, car title and installment loans at or around 36%, and the fourth state out of four to pass a cap when the issue was put to a vote of the people as a ballot measure.

Arizona citizens voted to allow payday authorization to sunset in 2008, which brought a 36% cap into force, and Ohio passed a 28% cap by ballot in 2008. Montana passed a 36% cap by ballot in 2010. The passage of South Dakota’s ballot measure further demonstrates the popularity of the 36% cap when the public is educated about triple-digit interest rates and the debt trap of payday lending.

Research has shown that working families are better off in states that have gotten payday lending under control—fewer unpaid bills, fewer bankruptcies, fewer closed bank accounts. We are proud to join those states, and we feel that the working families of South Dakota will now have the protection they deserve from predatory lenders who would cause them financial harm.

We are also pleased that South Dakotans saw through the highly-financed smokescreen that the industry put up. The out-of-state payday lending industry spent millions of dollars on their deceptive campaign to get a constitutional amendment on the ballot that would confuse voters, and in the final days ran deceptive advertising attempting to link the 36% rate cap to President Obama and Hillary Clinton.

But in the end, tireless grassroots campaigning, the support of the faith community and a coalition of liberal and conservative groups including Democrats, Republicans, AARP and the Family Heritage Alliance, and the near unanimous support of opinion leaders in the media overcame the payday lenders monetary advantage.


KELO: Pastors Against Payday Loans

Congregations across South Dakota are finding common cause in their opposition to the payday loan industry.  Many denominations are coming out publicly in support of Initiated Measure 21, which caps all payday loan rates at 36-percent, and against Amendment U, which caps the rate at 18-percent, but can go higher if the borrower agrees.

Churches are traditionally uncomfortable with delving into the worldly concerns of politics.  But many of them are framing the payday loan issue in moral terms, so they're speaking up.

Argus Leader, My Voice: Support Initiated Measure 21

by Rev. Gordon Rankin, UCC South Dakota Conference Minister

 "Christian teaching tells us we are not to take advantage of those who are disadvantaged. In that spirit, at our June Annual Meeting, the South Dakota Conference of the United Church of Christ bore witness to a practice in S.D., in which this tenant of morality is being blatantly ignored. Payday lending practices in our state unquestionably take advantage of the disadvantaged. Because of their ease of access, payday loans are most often utilized by working families and our elderly in times of financial challenge. The cost for quick, easy money is unbearable triple digit interest rates. According to the Pew Charitable Trust, the average interest rate is 574 percent."

KELO: Lisa Furlong Where Are U?

There are ten ballot measures that voters will be weighing in on next week. One of the most talked about issues on the ballot is Constitutional Amendment U. 

A majority of Yes votes will change the state constitution to limit payday loan companies to charging no more than 18 percent interest if there's no written agreement between the borrower and the lender. 

However, a written agreement can be reached between the two parties which would remove the interest rate limit altogether. 

The idea has generated a lot of talk, but we've heard almost nothing from supporters of the measure.

AP: Voters to decide South Dakota payday loan industry's fate

Payday loan stores don't operate in the 15 states that ban payday lending or interest rates over 36 percent, according to Pew. People have reported cutting back on expenses, borrowing money from friends and family, and selling or pawning possessions, said Alex Horowitz, senior officer for Pew's small-dollar loans project.

Horowitz said eliminating the loans is likely better for consumer welfare than the state's current situation. Cathy Brechtelsbauer, coordinator of an anti-hunger group that is campaigning for the rate cap, said people could ask for help from their church, request an advance from their employer or tap a credit card.