Lisa Furlong and the peddlers of Amendment U, the fake 18% rate cap, have demonstrated their willingness to lie to block Initiated Measure 21, the real 36% rate cap. Reviewing Furlong’s proponent statement for the usury amendment in the official 2016 Ballot Question Pamphlet leads me to contend that Furlong is breaking state law concerning false or erroneous information about ballot questions.
Review South Dakota Codified Law 12-13-16 (I emphasize the key phrase):
Any person knowingly printing, publishing, or delivering to any voter of this state a document containing any purported constitutional amendment, question, law, or measure to be submitted to the voters at any election, in which such constitutional amendment, question, law, or measure is misstated, erroneously printed, or by which false or misleading information is given to the voters, is guilty of a Class 2 misdemeanor [SDCL 12-13-16].
Now review the first two paragraphs of Furlong’s Pro statement on Amendment U (again, I emphasize key passages):
This measure places a strict 18% cap on interest rates, is far more stringent than that of other measures being proposed, and takes the extra step of amending the South Dakota constitution, which will ensure that the cap placed on interest rates are not undone or weakened by politicians.
This measure takes a balanced approach to protecting poor and middle-class people and families from predatory lending, while also protecting their access to money in cases of emergency. This measure places greater protections for borrowers in South Dakota by putting an 18% cap on interest rates right in the constitution – making it much more difficult for special interest groups and politicians to undermine or weaken it [Lisa Furlong, proponent statement on Amendment U, 2016 South Dakota Ballot Question Pamphlet, published August 2016].
Furlong has used the word “strict” before, in the misleading flyer her petitioners handed out last fall and in the rare press release she issued last August. As was the case with those 2015 statements, the 2016 statements I bold in Furlong’s ballot question pamphlet explanation are misleading and false. To understand why, we must review the language of Amendment U:
That article VI of the Constitution of South Dakota be amended by adding new sections to read as follows:
- No lender may charge interest for the loan or use of money in excess of eighteen per cent per annum unless the borrower agrees to another rate in writing. No law fixing an annual percentage rate of interest for the loan or use of money is valid unless the law provides borrowers the right to contract at interest rates as may be agreed to by the parties.
- No law fixing a rate of interest or return for the loan or use of money, or fixing the service or any other charge that may be made or imposed for the loan or use of money, for any particular group or class engaged in lending money is valid. Any rate of interest or charge fixed by law shall apply generally and to all lenders without regard to the type or classification of the lender’s business [Amendment U, as submitted 2015.08.10].
Amendment U imposes an 18% rate cap on loans made on oral agreements. Amendment U’s rate cap does not apply to loans with written agreements.
SDCL 54-4-70 requires that title loans be evidenced by a written agreement. On title loans, U is thus not a “strict” cap; it is a non-existent cap. It is not “more stringent” than IM 21’s 36% rate cap on title loans, nor does it provide “greater protections for borrowers”; U forbids any specific protection for title borrowers and annuls any protection for all borrowers signing written agreements, which under current law includes every South Dakotan taking out a title loan.
Wading into deeper water, I find SDCL 53-8-2 requires certain contracts be in writing. Among oral agreements that are unenforceable in South Dakota is “An agreement for a loan of money or for an extension of credit, which agreement may be enforced by a beneficiary for whom the agreement was made, including, but not limited to, vendors of agricultural goods, services or products.” That language suggests (and I invite the finance experts of my comment section to correct me, if necessary) that any loan, including ag loans, have to be written down to amount to a hill of beans in court. If my interpretation is correct, then Amendment U’s 18% cap on oral loans is a complete legal fiction.
Even if my interpretation is incorrect, I feel confident stating that no payday lender in South Dakota will let me walk out their door with fresh cash in hand without getting my signature. Either under law or under current business practice, Amendment U’s 18% rate cap applies to no significant loan currently offered by any lender affected by both Amendment U and Initiated Measure 21. Amendment U provides no “strict” or “more stringent” rate cap and no “greater” protection for borrowers. Amendment U restricts only the ability of the Legislature and the voters to put stringent caps on interest rates, a fact Attorney General Marty Jackley himself admits in his official explanation of Lisa Furlong’s fake rate cap.
Amendment U is unenforceable trick, and Lisa Furlong’s proponent statement is misleading and false. The latter makes Furlong guilty of violating South Dakota law.
Are you going to file a complaint with the AG or your states attorney asking them to prosecute Furlong?
That statement does not fall under the category of “the truth, the whole truth, and nothing but the truth.”
What payday loan shark makes loans that are not in writing? If no loans are made that are subject to Amendment U because all of these loans are in writing, how can she compare IM21 and Amendment U and conclude that U is more strict? They are apples and oranges. U is a rotten apple, admittedly.
This is simply a fraudulent attempt by the loan sharks to say things that aren’t true and mislead voters. The payday loan sharks have the unmitigated gall to claim that U provides protection from “predatory lending” and “greater protections for borrowers” at the same time it constitutionally limits the state’s right to limit predatory lending.
I agree this is a violation of SDCL 12-13-16. No reasonable person could read Lisa Furlong’s ballot explanation of Amendment U and not be mislead as to its effect.
These people are the scum of the earth and we need to oppose the politicians that supported them in the legislature, including the sponsors of HB 1161 Representatives Langer, Deutsch, Heinemann (Leslie), Rounds, Solum, and Willadsen and Senators Rampelberg, Olson, Shorma, and White.
Recall HB 1161 was an attempt to nullify the IM21 36% rate cap preemptively so it would not matter if voters approved IM21. Rarely have we seen a more cynical attempt to go around voters and to favor loan sharks over people.
The twenty-one House members who voted in favor of HB1161 are as follows: Campbell, Cronin, Don Haggar, Kris Langer, Rounds, Schaefer, Solum, Werner, Willadsen, Wink, Gosch, Harrison, Stalzer, Beal, Brunner, DiSanto, Haugaard, Roger Hunt, Marty, Verchio, and Wiik.
Jackley MUST protect the ordinary majority of SD voters who are being misled up to election day as long has he allows this misrepresentation to be perpetrated on SD consumers.
Bearcreekbat, before I consider taking any such official action, I’d like some rigorous evaluations of my readings of SDCL 54-4-70 and SDCL 53-8-2. Am I reading them correctly? Do they apply to lending as I interpret? Do they really render the oral contract provision of Amendment U moot? Or is there some crazy backwards way that this new constitutional mention of an oral loan contract could thus render unconstitutional statutory requirements for written loan contracts?
Cory, I think your reading of 54-4-70 and 53-8-2 (statute of frauds) are correct and thus, as you say, “U is a complete legal fiction.”
But I don’t think you have to wade in that deep even. No where in Furlong’s fraudulent explanation is there any mention that the 18% cap only applies to oral loans.
She says “This measure places a strict 18% cap on interest rates . . .”
No it doesn’t. I can go get a loan at 575% interest and it will not be subject to Amendment U unless it is an oral loan. If there is a major exception, especially one that eats up the rule itself, it is misleading and fraudulent not to mention that fact in the explanation, especially when they use the word “strict”.
They compound their lies as you have stated with comparisons that are untrue, “more stringent” and “greater protections for borrowers.”
There is no cap on interest for all the loans covered by Amendment U both in practice and possibly because of SDCL 53-8-2 statute of frauds.
Sounds like a legal challenge needs to be mounted by the AG’s office to this fraudulent propaganda. If the law allows this, it is an ass.
Darin, is a Class 2 misdemeanor worth mounting a legal challenge? I’m assuming a violation of election law is a criminal matter, not a civil matter. Would an interested citizen merely file a complaint, as Bear suggests, or must an aggrieved citizen lawyer up and sue?
I agree, Darin, that the statutory argument is gravy; Furlong’s desription of her (bosses’) initiative is misleading in practice: Amendment U imposes no strict cap on any loan that would be governed by IM 21.
Other legal opinions?
I thought maybe the AG should challenge Furlong’s description not as a Class 2 misdemeanor, but as a fraud on the public or some other public interest basis. The AG should get a court to strike the obviously false description. The Class 2 misdemeanor would be a bonus.
Contact the AG’s office and see if they are going to stand for the public being lied to in the worst way. I’m sure that there is wide latitude given on these, but they cannot possibly allow outright lies and falsehoods, can they?
The loan sharks may be able to get away with their many omissions regarding the effect of the law, but they can’t affirmatively state things that are patently false.
There’s the problem, Darin: statute seems to be written specifically to avoid any such challenging of the ballot question pamphlet. SDCL 12-13-23 says “The secretary of state is not responsible for the contents, objectivity, or accuracy of the statements written by the proponents and opponents.” SDCL 12-13-16 says false or misleading statements are a Class 2 misdemeanor, meaning the legal remedy is punishment of the false speaker. Can you find any other statute related to this malfeasance that would motivate A.G. action?
The secretary of state is not responsible as in not responsible for damages, but can’t the court order the fraudulent statements to be stricken from the ballot? It is common fraud perpetrated by the proponents.
How about this for a class action:
20-10-3. Fraud against public or class as fraud against individual. One who practices a deceit with intent to defraud the public, or a particular class of persons, is deemed to have intended to defraud every individual in that class, who is actually misled by the deceit.
20-10-2. Acts constituting deceit. A deceit within the meaning of § 20-10-1 is either:
(1) The suggestion, as a fact, of that which is not true, by one who does not believe it to be true;
(2) The assertion, as a fact, of that which is not true, by one who has no reasonable ground for believing it to be true;
(3) The suppression of a fact by one who is bound to disclose it, or who gives information of other facts which are likely to mislead for want of communication of that fact; or
(4) A promise made without any intention of performing.
20-10-1. Liability for damage caused by deceit. One who willfully deceives another, with intent to induce him to alter his position to his injury or risk, is liable for any damage which he thereby suffers.
Continuing stream of consciousness here, if 12-13-16 is a class 2 misdemeanor, is that the only remedy? Can’t we get an injunction against the continued usage of the false information?
Or can someone continue to publish false information and the only repercussion is another class 2 misdemeanor? Then, someone could pay for an ad in the paper each week until the election and there would be no way to stop the misinformation?
Here, the advantage is that the false statements are yet to be reviewed by voters at the time when they vote. The harm is yet to come and an injunction might fit the situation.
This may a weird question but 12-13-16 begins with “Any person knowingly printing, publishing, or delivering to any voter of this state a document…. ”
Is Furlong ” printing, publishing, or delivering” the 2016 Ballot Question Pamphlet?
She certainly is misleading. But so is Brad Thuringer in his Con for IM21 paragraph, specifically “If passed, Initiated Measure 21 will:If passed, Initiated Measure 21 will….end access to short-term loans in South Dakota.”
As do others. It seems quite a few of these are opinion pieces, where claims are made, without regard to facts.
Read through them all, and spot the false sentences and logical fallacies…Who the heck proof reads or approves these pro/con statements? I think that person should be held accountable and responsible!
Wait, maybe I should advocate for a position in Pierre, for someone (me!) to review these for veracity and fallaciousness! We could but a glossary in the front with a list of fallacies, and then each statement would have a footnote annotating which fallacies are present (appeal to emotion, ad hominim, appeal to popularity, etcetera…). There would also be annotations for statements that are false.
To make it even easier for the voter, at the top of each statement page, the number of fallacies and percentage of false statements would be provided.
Or at the very least, it could be provided to the secretary of state, who could then decline to print the statements if they contained fallacies or false statements.
I love this idea. Secretary of Ethics?
Darin, note that we aren’t talking about information on the ballot. This false information appears on the ballot question pamphlet, a separate document.
I’m inclined to believe that the payday lenders can and will pay big money to put the same lie in every newspaper in the state on a regular basis between now and election day. If we fine them, they’ll pay the maximum $500 for each instance and laugh. If we imprison them—max 30 days—maybe they’ll take us seriously.
Joe, the fact/opinion distinction is where enforcement of the statute in question against Furlong and other proponents and opponents gets tricky. We can’t lock people up for stating opinions or making good-faith claims that turn out to be incorrect. The prosecution would have to establish that the key terms—”strict”, “more stringent”, and “greater protections”—are statements of fact, not subjective evaluations.
You may have killed our prosecution by asking the “printing, publishing, or delivering” question. Furlong wrote it, but the SOS did the printing, publishing, and delivering, and statute specifically exempts the SOS from responsibility for the contents, objectivity, or accuracy of the pro/con statements. We Brown County Democrats handed out the ballot question pamphlets at the Fair, so we “delivered” those misleading statements—can we be prosecuted? I’d like to excuse us by saying we didn’t “knowingly” distribute them… but now that we do know, can we in good conscience circulate the entire pamphlet?
I wonder: has anyone ever been prosecuted under SDCL 12-13-16?
The legal question is murky, but the U-opponent/21-proponent strategy is clear: publicize Furlong’s lies vigorously, defuse the impact of her proponent statement.
Pro-choice advocate Jan Nicolay alleged that anti-choice advocates were lying about 2006’s Referred Law 6 when they advertised that it had exceptions for rape and incest victims. A.G. Long declined to prosecute:
Long apparently held that one must misstate the language of the measure itself, not just misrepresent its actions or impacts. Hmm….
21-8-14. Circumstances permitting grant of permanent injunction. Except where otherwise provided by this chapter, a permanent injunction may be granted to prevent the breach of an obligation existing in favor of the applicant:
(1) Where pecuniary compensation would not afford adequate relief;
(2) Where it would be extremely difficult to ascertain the amount of compensation which would afford adequate relief;
(3) Where the restraint is necessary to prevent a multiplicity of judicial proceedings; or
(4) Where the obligation arises from a trust.
21-8-1. Kinds of injunctive relief. Relief by injunction is either temporary or permanent. Temporary injunctions may be referred to as interlocutory injunctions, and are either temporary restraining orders or preliminary injunctions. Permanent injunctions may be referred to as final injunctions.
21-8-2. Purposes for which injunction prohibited. An injunction cannot be granted:
(1) To stay a judicial proceeding pending at the commencement of the action in which the injunction is demanded, unless such restraint is necessary to prevent a multiplicity of such proceedings;
(2) To stay proceedings in a court of the United States;
(3) To stay proceedings in another state upon a judgment of a court of that state;
(4) To prevent the execution of a public statute, by officers of the law, for public benefit;
(5) To prevent the breach of a contract, the performance of which would not be specifically enforced;
(6) To prevent the exercise of a public or private office in a lawful manner, by the person in possession;
(7) To prevent a legislative act by a municipal corporation;
(8) To enforce a penal law, except in case of nuisance or except when specifically authorized by statute;
(9) To enforce a penalty or forfeiture in any case.
21-8-3. Provisional writ abolished–Temporary restraining order and preliminary injunction substituted. The writ of injunction, as a provisional remedy, is abolished, and temporary restraining orders and preliminary injunctions by order are substituted therefor. A temporary restraining order or a preliminary injunction is obtained by order of the court.
21-8-12. Order granting restraining order or preliminary injunction. An order granting a temporary restraining order or preliminary injunction may be made by the court in which the action is brought, or by a judge thereof, and when made by a judge may be enforced as an order of the court.
Keep in mind Marty Jackley has aspirations of higher public office and he wouldn’t want to be known as the guy who went soft on the payday lenders. That most certainly could come back to haunt him in a future campaign.
Let’s also keep in mind that even if the penalty is minor, seeing the payday lenders on the wrong side of a headline as they are criminally charged is a fantastic way to get the message out without spending a lot of marketing dollars.
My reading agrees with Darin. When Furlong wrote “This measure places a strict 18% cap on interest rates . . .” she was being deliberately dishonest, false, and misleading. This is clearly in violation of the statute.
Lisa F. did the “delivering” when she submitted it to the Sec’y of State.
We should all stop distributing these pamphlets to the voters.
I agree on both counts with Mr. Brechtelsbauer.
Darin, check out 21-8-2(4): a judge can’t grant an injunction “To prevent the execution of a public statute, by officers of the law, for public benefit.” The SOS is executing her obligation under 12-13-23. I agree that Furlong’s statement is a lie, but the statutes we’re piling up here indicate we don’t have grounds to ask the A.G. to gather up all the existing ballot question pamphlets and burn them.
I do agree with C Brechtelsbauer that Furlong “delivered” that false statement to the SOS, who is a voter, and is thus by extension knowingly delivering it to voters across the state.