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Real 36% Rate Cap Makes the Ballot! Vote Yes on 21!

Vote Yes on IM 21The real 36% rate cap on payday loans is on the 2016 ballot! Cap the Rate SD informs me that Secretary of State Shantel Krebs informed them this afternoon that she has certified their initiative petition to give all South Dakotans a chance to vote on stopping the abusive lending practices of payday and title lenders. Barring challenges (deadline January 27, 5 p.m.), the real 36% rate cap will appear on the ballot as Initiated Measure 21 (on which you all should vote yes!).

Secretary Krebs told Cap The Rate SD that out of a calculated 19,936 submitted signatures, the statutory 5% random sample indicates 17,222 are valid. That’s a 13.61% error rate, with 3,351 signatures to spare over the 13,871-signature requirement to place an initiated law on the ballot. Even with the payday lending industry hiring saboteurs to deceive the public and to harass its organizers and circulators, Cap the Rate SD still achieved a 24.16% signature cushion. Compare that to the performance of Jason Glodt’s out-of-state “professional” circulators who turned in petitions with a 35.87% error rate and a 24.12% cushion.

Secretary Krebs’s certification today of IM 21 fits the calendar I extrapolated from her performance on certifying Amendment T. If Team Krebs keeps working at this pace, we should expect the next petition news from her office, on the certification or rejection of Lisa Furlong’s fake 18% petition, by next Monday, January 4. Here’s my updated predicted timetable for certification of the remaining five petitions:

title issue submitted sigs estimated sigs* work days cert date
S Glodt 52,817 53,687 31 12/21/2015
T Redistricting 40,400 43,198 3 12/24/2015
21 36% rate cap 20,800 19,936 1.5 12/28/2015
U 18% decoy 60,028 60,912 4.3 01/04/2016
22 Anti-Corruption 25,216 25,587 1.8 01/06/2016
V Non-Partisan 39,182 39,759 2.8 01/11/2016
23 Fair Share 30,810 31,264 2.2 01/14/2016
24 MedMar 16,631 16,876 1.2 01/15/2016

IM 23 could be done a day sooner, but I’m fudging that number to include the extra busyness of the Capitol as the 2016 Session opens that week. Stay tuned!


  1. Steve Hickey 2015-12-28 15:36

    Thanks to everyone who signed and helped. Frankly I thought our error rate would be even lower as we didn’t cut any corners or tolerate anything questionable. We even tossed out a few dozen signatures gathered at an FHA event because our circulators had sheets on tables instead of face to face holding clipboards. Wait til you see how much we spent. Very proud that our petition drive was done with such integrity.

    Cory if you are doing a top ten list of political stories in 2015, Lisa Furlong and the 18% petition cheats needs to be in the top five.

  2. caheidelberger Post author | 2015-12-28 16:03

    Thank you, Steve, for helping bring this issue to the voters. Now IM 21 just has to withstand whatever legal challenges the payday lenders are waiting to spring to keep the measure off the ballot.

    Remember that some portion of the error rate calculated by the Secretary may include blank lines or cross-outs that you guys didn’t count but which figure into the Secretary’s sampling methodology. Beyond that, well, absent an electronic petitioning system like Denver’s that would check signers’ voter registration status immediately, maybe 10%–15% is the absolute lower bound for petition error rate.

    I’m thinking about my 2015 wrap-up articles right now, Steve. Ballot measures and the invasion of the payday lenders will most certainly figure in those articles.

  3. bearcreekbat 2015-12-28 17:14

    Well done Pastor Hickey! A provision that could actually help people in need will now be before the voters rather than our one party legislature. I admire your efforts on this provision. Thanks!

  4. leslie 2015-12-28 18:00

    outstanding hickey. truly exceptional thus far. will this be an important candidate issue too? good luck with scotland and everything else!

  5. jerry 2015-12-28 19:40

    Congratulations on a job well done by putting this up for public vote. I am sure that in South Dakota, there are those that are being taken to court over another racket that is fully supported by the federal government, the garnishment of wages due to credit card charges. These are much like the payday lenders and in some cases, it looks like the same crowd.

  6. grudznick 2015-12-28 19:45

    Are those work hours or work days in the penultimate column? If it is, as the label says, hours, then I’m calling French Math on this.

  7. caheidelberger Post author | 2015-12-28 22:54

    Days, Grudz! Sorry about that—error from old spreadsheet. I have edited the chart to accurately label the work times! (Note to everyone: Grudz can be useful.)

  8. caheidelberger Post author | 2015-12-28 22:57

    Leslie, the 36% rate cap should be a candidate issue. Every candidate of good conscience should raise the issue with voters, help them understand the difference between the real 36% rate cap offered by IM 21 and the fake 18% provision that the payday lenders are trying to write into our state constitution in Amendment U. Even conservative candidates who don’t support rate caps should help people understand the difference between the two measures and simply urge people to vote NO on both—no on the first to protect what they will assert are free market principles, but an even stronger NO on the fake 18% amendment to stop out-of-state business interests from perverting both the initiative process and the state constitution.

  9. barry freed 2015-12-29 07:28

    need a catchy one liner or rhyme to cement in voter’s minds: Yes 21, No (whatever IM )

  10. caheidelberger Post author | 2015-12-29 07:41

    Barry, I agree we need a catchy slogan. The problem with the 36 and 18 will be that 36% gets a number, IM 21, while 18% gets a letter, Amendment U. “21 Yes, U No!” sounds weird. Plus, it sounds like we’re telling people to vote against themselves: “Vote no on U!”

    We could try associating 21 with blackjack, but then people will get confused and think we’re voting on gambling.

    Hmmm… “U is for Usury”—do enough people know that word to be motivated to vote No on it?

    I may not have a catchy slogan, but I’ll be happy to circulate little voter cards listing each measure by number or letter and simply saying “Yes” or “No” as I see fit, with bold print for the measures that matter most, and then maybe brief titles and explanations on the back:

    RL 19: NO
    RL 20: NO
    IM 21: YES
    IM 22: YES

    IM 23: yes
    IM 24: no

    Am R: no
    Am S: no
    Am T: YES
    Am U: NO
    Am V: YES

  11. Tom L. 2015-12-29 08:50

    Question, can’t the PayDay lenders just make up the interest difference in fees? Or does this bill prevent a fee increase? As I see it, the rate may drop, but the origination fee may just go up to cover the difference. And so many people are hooked on these loans that they don’t care if they pay a larger origination fee as they feel they need the money. So will this measure have any impact or just shift the fee structure? Maybe I haven’t looked at this close enough.

  12. caheidelberger Post author | 2015-12-29 10:16

    Good question, Tom L.! Payday lenders are notorious for finding loopholes and shifting their business model to get around efforts to regulate their predatory lending. The 36% rate cap petitioners appear to have anticipated that possibility: by the language of their petition (see Section 2), their rate cap includes “includ[es] all charges for any ancillary product or service and any other charge or fee incident to the extension of credit.” As I read it, IM 21 will make it impossible for a payday lender to charge borrowers anything that would add up to more than 36% per year of what they are borrowing.

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