Are the payday lenders now knocking at legislators’ doors?
After last night’s odd encounter between a woman claiming to work for North American Title Loan and a 36% rate cap petition circulator, an odd little bill pops into the hopper that could bear on the wording of the payday lenders’ fake 18% Amendment U. Senate Bill 57 adds a definition of “written agreement” to our current statute on interest rate restrictions:
A written agreement is a document in writing, whether in physical or electronic form, in which the parties have demonstrated their agreement to the terms and conditions of an extension of credit, including the rate of interest [Senate Bill 57, language proposed to add to SDCL 54-3-1.1, posted 2016.01.21].
SB 57 could be an innocuous catch-up with technology, recognizing that people do conduct banking and other financial business online without ever touching a piece of paper (pass that memo to Senators Brock Greenfield and Jim Peterson, who yesterday voted to strike an electronic filing requirement from Senate Bill 53, the bank franchise tax reform bill). But Senate Bill 57’s attention to written agreements will bear on Amendment U, in which the payday lenders pretend to offer an 18% rate cap but write a massive loophole into our state constitution allowing higher rates any time a borrower “agrees to another rate in writing.” SB 57 would appear to clarify that online payday loans, a favorite resort of loan sharks seeking to evade state restrictions on usury, would cruise right through deceptive Amendment U’s big fat loophole.
We may need this technological clarification, but we need to hear why we need this clarification, who’s behind it, and why it’s being applied just to our current interest-rate restriction statute.
South Dakota Voters … Imagine if you will – – – the number of greasy, sleazy and below board bills that were run through the Republican dominated legislature before Mr. Heidelberger’s blog (the most read in SoDak) turned on the flood lights of examination.
Wonder what lisa furlong would say? In the GOP Cover-up Tradition In Sd over Eb5, Mcec, Tidemann, banking Commision, Regents and bosses; we Wish For No Transparency and change The Rules As We Go To Suit lobbyists. whats Not To Fear?
Let’s be fair here, Mr. Lansing. Mr. H has complained about a couple of bills that by all accounts he 1) may be misreading or misunderstanding and 2) has not heard the testimony on.
That’s not journalism. That’s not even good blogging. That’s called partisan gossip.
The section of SD law being amended in SB57 applies to SD’s banks. Loan agreements of today differ in many ways from those that existed when the existing statute was enacted. SB57 is simply aimed at making sure that our statutes reflect current business practice where electronic communication between borrowers and lenders is commonplace.
Thanks, Curt! No relevance to payday lenders or title loan outfits?
57 amends Title 54 which is our states code on relationships between debtors and creditors. So 57 would affect those contracts, by modernizing the language as you point out. The SD Bankers Association brought the bill on behalf of its members.