Wednesday, January 5, 2011

Yikes! Usury is good to go in South Dakota

I emailed the following question in to the State Senate round table. They were about to end without it, and my wife was good enough to enter the chat and nudge them to ask it. Argus Leader's Yvonne Hawkins read it to the panel:

"Are there plans to revisit limits on the excessive interest charged by
'pay day lenders' and other financial institutions in South Dakota?"

Only Sen. Shantel Krebs attempted to answer, and she wound up saying that efforts to restrict interest would be "starting to mess with an industry that employs a lot of people in South Dakota."

"Pay Day" loans are short term but can be rolled over for more than one cycle. Their actual interest rates are as high as 900%.

"Internet payday loans cost up to $30 per $100 borrowed and must be repaid or refinanced by the borrower's next payday," said Jean Ann Fox, CFA's director of consumer protection. "If payday is in two weeks, a $500 loan costs $150, and $650 will be electronically withdrawn from the borrower's checking account."


caheidelberger said...

If all Sen. Krebs and the GOP are worried about is jobs, why haven't we legalized prostitution? We could generate lots of jobs with that.

TLF+ said...

Yes, and the sale of any and all narcotics. If the position is, "As long as there's a job created, we stay out of the impact on customers," then why not?

Having moved from California, of course, it is all relative. I would rather have South Dakota's inconsistencies than the psychodrama club meeting in Sacramento.

Still, I get angry at the hypocrisy of those who say "Citizens and government should be prudent with money" while going all out to defend an industry that cultivates finanical imprudence.