One group's mission is to fight high pay day loan interest rates in South Dakota, but members fear a house bill will sabotage their work.
In November, you will vote on two issues about loan interest rates -- one of caps them at 36 percent. House Bill 1161 states it would provide for and regulate consumer lines of credit.
So, how are the two connected? The head of South Dakotans for Responsible Lending believes the legislation would give lenders a loophole.
Members of South Dakotans for Responsible Lending continue to fight currently unregulated interest rates on short term loans. If Measure 21 passes in November, the group will succeed.
"The people of South Dakota deserve a lot better," Steve Hildebrand with South Dakotans for Responsible Lending said.
If you print it out, House Bill 1161 is 13 pages long. However, here is the main point Hildebrand is worried about - He fears it would allow lending companies to work around an interest rate cap on loans, because he says they will be able to offer customers a line of credit instead.
"And every single day, your interest rate would grow and grow and grow until you go bankrupt," Hildebrand said.
Hildebrand says those interest rates could climb to nearly 600 percent. The bill's language states a lender may charge and collect periodic interest at a rate agreed to by the parties. If a customer fails to make a required payment, a lender may continue to charge and collect interest.
Hildebrand believes the lending industry, specifically North American Title Loans, is behind this. We called a North American location in Sioux Falls to ask about this claim. A manager for the store said no one from the company will comment.
Hildebrand says this won't slow his efforts down come election time.
"It's time we can do better and a vast majority of people are with us on this," Hildebrand said.
There are ten lawmakers who are listed as sponsors of the bill.
"They're fighting for payday lenders, not for the people of South Dakota," Hildebrand said.
So far, none of those lawmakers have called us back to answer our questions about why they are backing it and whether they are receiving any incentive to back the bill. We'll let you know if and when one calls us back.
In November, you will vote on two issues about loan interest rates -- one of caps them at 36 percent. House Bill 1161 states it would provide for and regulate consumer lines of credit.
So, how are the two connected? The head of South Dakotans for Responsible Lending believes the legislation would give lenders a loophole.
Members of South Dakotans for Responsible Lending continue to fight currently unregulated interest rates on short term loans. If Measure 21 passes in November, the group will succeed.
"The people of South Dakota deserve a lot better," Steve Hildebrand with South Dakotans for Responsible Lending said.
If you print it out, House Bill 1161 is 13 pages long. However, here is the main point Hildebrand is worried about - He fears it would allow lending companies to work around an interest rate cap on loans, because he says they will be able to offer customers a line of credit instead.
"And every single day, your interest rate would grow and grow and grow until you go bankrupt," Hildebrand said.
Hildebrand says those interest rates could climb to nearly 600 percent. The bill's language states a lender may charge and collect periodic interest at a rate agreed to by the parties. If a customer fails to make a required payment, a lender may continue to charge and collect interest.
Hildebrand believes the lending industry, specifically North American Title Loans, is behind this. We called a North American location in Sioux Falls to ask about this claim. A manager for the store said no one from the company will comment.
Hildebrand says this won't slow his efforts down come election time.
"It's time we can do better and a vast majority of people are with us on this," Hildebrand said.
There are ten lawmakers who are listed as sponsors of the bill.
"They're fighting for payday lenders, not for the people of South Dakota," Hildebrand said.
So far, none of those lawmakers have called us back to answer our questions about why they are backing it and whether they are receiving any incentive to back the bill. We'll let you know if and when one calls us back.