The payday lenders have not fooled the Sioux Falls Area Chamber of Commerce. In its combo brief on Initiated Measure 21 (the real 36% payday loan rate cap) and Amendment U (the fake rate cap thrown onto our ballot by the payday lenders), the Chamber correctly explains the effect Amendment U will have on payday lenders’ interest rates: absolutely none.
The first section creates an 18 percent rate cap on interest rates, but only on verbal loans. If the parties to the loan agree in writing to higher interest rate terms, there is no cap. This would allow payday, car title, and installment lenders to continue business as usual [Sioux Falls Area Chamber of Commerce, issue brief on IM 21 and Amendment U, approved 2016.08.17].
The Chamber properly explains that only way to keep Georgia millionaire (that’s how the Chamber describes him!) and payday lender Rod Aycox from beating back a real payday rate cap is to vote NO on Amendment U and YES on IM 21. Oddly, the Chamber errs in describing how hard it will be to undo U if it passes:
Since these changes are being made to the constitution any attempt to repeal this new constitutional amendment would require a two-thirds vote in both houses of the legislature and require the Governor’s signature [SF Chamber, 2016.08.17].
Unless I’ve missed some arcane bit of South Dakota constitutionalia, the only way to undo a constitutional amendment is another constitutional amendment. Two processes can put new amendments on the ballot: voters can float a new amendment by collecting signatures equal in number to 10% of the voters in the last gubernatorial election, or a majority of members of each house of the Legislature can propose an amendment. Either way, a new amendment requires a majority vote by the electorate. There’s no two-thirds vote, and there’s no gubernatorial veto.
But let’s avoid all that complication. Let’s listen to the Chamber, recognize that Amendment U is a fake, and vote U down hard this November. And let’s pass IM 21 to check those fakers’ exploitation of our neighbors.