The payday lenders are waging a desperate multi-front war to stop South Dakotans from stopping their loan sharking. Payday lender boss Rod Aycox has spent $2.1 million so far to push his fake 18% rate cap (Amendment U for Usury) onto the ballot to confuse voters and sabotage the real 36% rate cap (Initiated Measure 21). Aycox’s lieutenant Erin Ageton this week brought her effort to bias the Attorney General’s official explanation of IM 21 in her industry’s favor to the South Dakota Supreme Court. Aycox’s minions have launched a specious challenge to the petition that placed IM 21 on the 2016 ballot.
And if all those efforts fail—if my challenge of his perjury-riddled petition succeeds, or if South Dakotans have the good sense to vote YES on IM 21 and NO on U—Aycox has allies pushing House Bill 1161 to evade IM 21 altogether. In testimony yesterday to House State Affairs, payday lender lobbyist Brett Koenecke confirmed the analysis friends of the blog helped me put together last week: Rep. Kris Langer’s (R-25/Dell Rapids) House Bill 1161 is an attempt to write short-term lenders into a new section of South Dakota law that would let predatory lenders skirt the changes proposed in IM 21:
Short-term lenders can’t make a profit or break even at 36 percent interest, according to Brent Koenecke, a Pierre lawyer.
He represents Multistates Associates, a lending company based in Alexandria, Virginia.
Koenecke told legislators on the House State Affairs Committee that creation of a new chapter of law for commercial lines of credit would move the short-term lenders out of the chapter of law targeted by IM 21.
He said the 36 percent limit would apply to the types of recurring loans in chapter 54-4, but those loans wouldn’t be made any longer.
The House committee approved several amendments sought by Koenecke and later endorsed the measure, HB 1161.
Koenecke said he worked with the Division of Banking on the amendments.
“This is a new chapter of code and a new product, not those old products,” Koenecke testified.
The full House of Representatives could consider the bill as early as Friday afternoon [Bob Mercer, “Short-Term Lenders Try Another Tactic to Get Around Proposed Interest Limit,” Mitchell Daily Republic, 2016.02.18].
These usury millionaires appear to have endless tricks up their sleeves. We must stop House Bill 1161.
Five committee members voted against HB 1161, including the influential Rep. Mark Mickelson (R-14/Sioux Falls). They heard good testimony from opponents of the bill, including the AARP, the National Association of Social Workers, and the Presentation Sisters. Call your Representatives and encourage them not to the bidding of the loan sharks and instead let South Dakotans decide their fate in November.
Now would also be a good time to review my explanation of why Amendment U is another nefarious payday lender trick that we should vote down in November. Here’s my February 8 speech to the Brown County Democratic Forum on the topic, from Ken Santema’s video. I have edited the video to correct on error I made doing math on the fly during the speech (yes, Grudz…) to calculate how much the payday lenders spent per signature on their Amendment U petition. If we add the $1.7 million Aycox’s company Select Management Resources gave to Lisa Furlong’s ballot question committee and the $455,000 SMR gave to Bradley Thuringer’s ballot committee, Aycox disbursed $51.70 for every valid signature the Secretary of State calculates his thug-petitioners submitted.
Yes on 21, No on U!