Vote Yes on IM 21 for Faith, Family and Freedom from Payday Lending

paydayloans1At Family Heritage Alliance, we are dedicated to protecting and promoting faith, family and freedom. That is why we have joined with faith groups from across South Dakota to support a measure on the November 8 ballot that will put an end to a practice that harms families and threatens their financial freedom. We endorse the Initiated Measure 21 to cap predatory payday lending at 36% interest and reject Amendment U’s fake interest rate cap.

Payday lending is at odds with our faith.

Proverbs 28:8 says whoever increases his wealth through excessive interest collects it for one who is kind to the poor. This means that those who profit off the poor can count on a day of reckoning when the tables are turned. South Dakotans can make this Election Day a day of reckoning for predatory and excessive payday lenders. They make loans to people who are struggling to get to their next payday, and here’s where the excessive interest comes in. They charge up to 574% annual interest rates!

Payday lending harms families.

Strong finances make strong families. Any family can fall on hard times and be tempted by the call of quick cash. But with payday lending, what starts as a two-week loan routinely becomes long-term, unmanageable debt with devastating consequences for families.

Studies have found that payday borrowers have trouble paying other bills, and have had increased delays in medical care and prescription drug purchases. Borrowers have had their bank accounts closed and have even filed for bankruptcy. These are serious financial consequences from a so-called “service” that is supposed to help, not harm, families in a time of financial need.

Payday lending interferes with financial freedom.

Payday lending is, in fact, designed to be a trap. The system is set up so that the lenders have access to the borrower’s bank account, so they get paid before any other bill. The full loan is due in such a short amount of time that the borrower is forced to refinance the loan, paying another high-interest fee. This happens, over and over again every payday for many families. Borrowers are routinely trapped in a long-term cycle of debt that they cannot escape. The average borrower pays about $800 on a $300 loan, and may be caught in the cycle for weeks, months, and for some, even years.

The ballot measures.

There are two measures addressing payday lending on the ballot. The first one, Amendment U, is a scam by the payday lending industry meant to trick us into thinking it is an interest rate cap of 18% – but it does not apply to written agreements! So it is no cap at all. Please vote NO on U.

The second one is IM 21, the 36% interest rate cap, which is considered an acceptable rate for consumer loans. Congress has capped payday and title loans to active military personnel at 36%. Vote YES on 21.

We know you have a lot of business to take care of on Election Day, but please take the time to make your voice heard on this important issue. It will have a big impact on South Dakota families who need a little protection in hard times. So go all the way down the ballot – vote NO on U and YES on 21. Vote your faith values, so that our families may be free from payday lending predators.