Republican District 13 Senate candidate Jack Kolbeck has the courage to post his views on all ten ballot measures on his campaign website. I give kudos to any legislator willing to tell the voters where he stands on the ballot measures. Here’s Kolbeck’s ballot-measure breakdown:
Kolbeck’s only clear Yes appears to be for Amendment R, the vo-tech governance proposal, which he, like his District 13 neighbor Rep. G. Mark Mickelson, hyperbolizes far beyond the actual text on the ballot. Kolbeck clearly rejects S, T, V, 19, and 22. He wants the Legislature to debate U, which I assume means he wants us to vote against it to allow that Legislative debate. On 20 and 23, Kolbeck sounds ambivalent.
I found Kolbeck’s statement on Initiated Measure 21, the 36% rate cap on payday loans, particularly interesting. “This measure is targeting a specific group of businesses and may be in violation of the South Dakota Constitution,” says Kolbeck. He cites Article 23, but I checked with him and learned that’s a typo: Kolbeck is concerned that IM 21 may violate Article 3, Section 23, which prohibits private and special laws. Article 3 Section 23 bans eleven specific types of special laws, but none of them appear to apply to IM 21. We can’t pass a law saying, “Dollar Loan Center can only charge 36% interest, but North American Title Loan can charge 574%.” However, I see no ban on regulating all businesses in a specific industry—in this case, short-term lending.
Only the catch-all clause at the end—”In all other cases where a general law can be applicable no special law shall be enacted”—hints at relevance. But to invoke that clause, we need to identify some general law that already caps or can cap interest rates. Might there be some case law that says we cannot subdivide industries with special laws affecting one group of businesses but not others? Perhaps we cannot cap rates for payday lenders while allowing Citibank and Premier Bankcard to continue charging higher rates on their credit cards (funny how usurers rhymes with Huetherers).
But I don’t see that argument on the face of the text before us. IM 21 is not a special law targeting a specific individual or company. South Dakota already has statutes exempting various subdivisions of the lending industry from various regulations, apparently without constitutional trouble. If there’s a constitutional argument against a 36% rate cap on payday loans, I’m going to need to see some evidence.