The payday lenders may have shut down their loan shark shops in South Dakota following the voters’ sensible and overwhelming judgment last November that charging more than 36% interest on a loan exploits the poor and desperate. But in continuing sore-loser fashion, the payday lenders are throwing their corporate propaganda at us again to say we’re hurting something other than their sleazy profits by capping interest rates in South Dakota:
…”Unfortunately, customers are now paying higher costs for their credit products, when they can get them, and they’re forced to turn to illegal operators, as well,” says Jamie Fulmer, Senior Vice President for Public Affairs with Advance America.
…Fulmer says that the survey shows that 58 percent of its former South Dakota borrowers are now forced to pay late fees and 53 percent are neglecting their bills. In addition, the survey shows that 40 percent did not fix a vehicle, and 37 percent did not pay a medical expense, when faced with money troubles due to a lack of short term lending [Mark Russo, “Survey: Unintended Consequences of Payday Loan Rate Cap,” KELO Radio, 2017.04.28].
Hmm… survey conducted by a corporation, promoting its own corporate line… sounds about as independent and reliable as Donald Trump telling us how effectively he vetted Michael Flynn.
Even if their proprietary survey has uncovered any facts, I will maintain as I did right along with Al Novstrup and my Lutheran friends during the 2016 campaign that those South Dakotans who may have had more difficulty getting emergency cash are still better off having to turn to friends, family, employers, and churches for help than they were when the payday lenders could trap them in inescapable debt. Some industries are just too exploitative, too inhumane, and too evil to allow.
But hey—I’ll spot the payday lenders this line: according to the South Dakota Department of Labor, there are a few hundred more South Dakotans not working now than were working one year ago in our fair state:
The 36% rate cap took effect on November 16, 2016. In November and each of the four following months, South Dakota had hundreds more unemployed workers than it did in the corresponding months of the previous year.
Stop right there, and the payday lenders have their economic story: those hundreds of additional out-of-work South Dakotans are the hundreds of workers payday mogul Chuck Brennan said would lose their jobs because we’re such regulatory meanies.
But look more closely at the numbers. Unemployment over the winter isn’t much different from unemployment the previous winter. While there were hundreds more people unemployed this winter than last, there were also thousands more working in South Dakota this winter than last. Compare: there were 435,000 jobs in South Dakota in March 2016; there were 440,000 jobs in South Dakota in March 2017.
So even with the payday lenders out, there are thousands more jobs to do in South Dakota than there were when Chuck Brennan was squeezing thousands of low-income folks with his predatory triple-digit interest rates. Those thousands-more jobs are good for the people who used to work at Brennan’s loan-shark shops, and they are good for the tens of thousands of South Dakotans whom Brennan and his fellow loan sharks exploited.
And remember: if anyone is going to calculate why jobs might not be growing as fast as they might otherwise, they first have to calculate the impacts on employment of the sales slump that predates the 36% rate cap.
If the payday lenders really want to keep crying over their spilled sour milk, if they really want to demonstrate that our regulating their industry has hurt South Dakota’s economy, they’re going to have to produce more reliable, independent data than their in-house propaganda. Even then, they won’t sound much better than pimps and drug dealers complaining that their hookers and mules have had to find other sources of income.