Director Bret Afdahl said, “The Division of Banking is investigating the matter. The investigation is similar to our regular examination process. The Division sends a list of documents we want to review and goes onsite to review them. In addition, the Division will review the terms of the product in conjunction with Chapter 54-4 to make a determination regarding the product for compliance with South Dakota law. Those findings will be communicated to the company.”
Additional information will be released when publicly available [South Dakota Department of Labor & Regulation, Division of Banking, press release, 2017.07.11].
I had thought that the 36% rate cap we voters overwhelmingly passed last November made clear that payday lenders could not charge more than 36% interest, and that said charges included any sneaky fees they could tack on. But sure enough, it appears the Legislature undid that protection, too. Check out House Bill 1090, Section 4, now SDCL 54-4-44.3:
For the purposes of § 54-4-44 for all loans, late fees, return check fees, and attorney’s fees incurred upon consumer default are not fees “incident to the extension of credit.”
That statute came into effect July 1; Brennan started offering his one-week loans right afterward. And somehow we let the Legislature pass this change unanimously to let Brennan come back in to exploit South Dakotans. Aaarrrggghhh!