Voters to decide South Dakota payday loan industry's fate

Lifestyle and BudgetAssociated Press

Short-term lenders say the passage of a ballot measure capping payday loan interest rates would destroy the industry in South Dakota.

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That's how a recent rate cap initiative played out in Montana. State figures show regulated short-term lenders plummeted from over 100 to none within several years of its 2010 approval.

Lending companies argue that they provide consumers with important access to short-term credit.

Ballot measure supporters say people have options for help other than a snare engineered to profit off the poor.

A 2014 Pew Charitable Trusts report says the average annual percentage rate charged for a payday loan in South Dakota is 574 percent. The ballot measure would cap interest rates for products such as payday loans at 36 percent annually.