Voters pass measures on loans

Montana voters on Tuesday passed ballot measures capping the interest rate on payday loans at 36% and amending the state constitution to block the government from ever imposing a certain type of real estate tax.

They also appeared be in favor of abolishing 7,800 outfitter-sponsored hunting licenses. But voters rejected calling a convention to rewrite the state constitution.

With relatively low-profile races at the top of the Montana ticket this year, the four ballot measures garnered a good deal of publicity this campaign season.

Voters overwhelmingly adopted the ballot initiative to put a 36% cap on payday loan interest rates, which can now run at annualized interest rates of up to 650 percent. With 77% of precincts reporting, about 73% of voters approved the payday loan cap.

Supporters of the initiative say payday lending aims to trap vulnerable segments of the population in debt, but add they wouldn’t have been able to fight the industry without the initiative process. Opponents failed in a legal challenge of the initiative’s legitimacy.

“We’re really pleased the people of Montana had the chance to vote on this despite (the industry’s) efforts to knock this off the ballot,” said C.B. Pearson, the campaign manager for the group backing the initiative. “I think it’s going to be a good opportunity for people who get into a cycle of debt to get out.”

The loans typically allow a person to borrow up to $300 for a short period, usually two weeks.

The lender can charge up to 25 percent of the value of that loan, or $75 in the case of the $300 loan.

Opponents argued their business is already regulated by the state, and the cap would allow them to charge just a $1.38 fee for a $100 loan, which would effectively put the lenders out of business.

Bernard Harrington, the owner of six EZ Money Check Cashing stores, said he couldn’t imagine a scenario where he’d be able to continue lending money under the new rules.

“There will be nobody who is doing loans,” Harrington said. “I’m sure there will be a downsizing in the industry and a lot of people who will be unemployed.”

 

News source: greatfallstribune.com

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