The Missouri Supreme Court recently issued a ruling that would allow three controversial initiatives to hit state ballots in November, and one such decision involves payday loans.
The three initiatives — which also included a change in the state’s minimum wage and a tax on tobacco products — were consolidated into one case a few months ago and approved for public vote earlier this week, according to a report from the St. Louis Beacon. The initiative involving payday loans would allow the state to cap interest rates on this type of lending at just 36 percent. It was largely considered to be part and parcel with the minimum wage increase proposal.
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“Today’s ruling is great news for the 350,000 Missourians who signed petitions to cap the rate on payday loans and raise our minimum wage,” said Rev. James Bryan, treasurer for Missourians for Responsible Lending, according to the site. “The payday lenders and corporate special interests have tried everything in the book to silence Missourians and keep these petitions off the ballot — unsuccessfully. We are happy to put this very long legal process behind us.”
However, there is still work to do for advocates of the initiative, the report said. Now that it has been approved by the state’s Supreme Court, all three proposals need between 91,818 and 99,600 certified signatures from registered voters each to appear on the ballot.
The decision might allow Missouri to join a number of other states that have passed similar legislation related to greater control of the payday lending industry, the report said. Opponents of the provisions say that allowing any sort of unilateral decision from the Missouri Secretary of State — who must approve ballot initiatives — is unfair because language on these specific issues was “deceptive” and “misleading.”
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Critics of payday lending have often noted that the interest rates on these types of loans can be sky-high and, because they’re typically only taken out by consumers with lower incomes who may not have access to other types of credit or financial management accounts, ultimately damaging. These loans, which are usually worth approximately $1,000 or more, typically require no credit check and therefore charge borrowers interest rates higher than any other types of lending.
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