Reaction to payday loan cap, Initiated Measure 21 passes

Payday loans, a hot topic in this year’s South Dakota election, with two conflicting ballot issues.

And Amendment U and Initiated Measure 21 dueled it out over payday loans.

In the end amendment U, which would have limited the ability to set interest rates for loans, failed to pass.

While Initiated Measure 21, which will set a maximum finance charge of 36% for money lenders, passed with more than 74% voting yes.

“It's going to help a lot because the people who use pay day loans are poor people, low income, bad credit because they can't just go to their local bankers or credit unions. 36 percent is going to put a lot more money into their pocket because they won't have to pay those high interest rates,” Terry Mills, with Consumer Credit Counseling said.

He says at the end of the day it puts more money back in the pocket for people using those places.