South Dakota Voters,

I encourage you to vote yes on Initiated Measure 21 and no on Amendment U. 

Initiated Measure 21 would enact a 36% rate cap on short-term loans. Currently, there is no limit. In South Dakota, the average interest on payday loans is 574%. These high-interest loans trap our low-income neighbors in a dangerous cycle of debt. It’s clear that we need better options for people who can’t qualify for loans at most banks, but let’s not pretend that payday loans serve anyone but payday lenders. Charging 574% interest on loans to people with few financial options is predatory and morally wrong. It should be illegal.  

Amendment U would amend the state constitution to say that, in the absence of a written agreement, interest rates are capped at 18%; otherwise, there is no limit. No one gets a loan without paperwork, so the 18% cap is both misleading and meaningless. If this passes, it will be impossible to put any cap on interest rates. Long-time Republican state legislator Bill Peterson called it “the most deceitful thing I ever saw on a ballot.”

The South Dakota Conference of the United Church of Christ, the South Dakota Synod of the Evangelical Lutheran Church in America, and the Dakotas Conference of the United Methodist Church all voted to support IM 21 and to oppose Amendment U. While these votes are not binding on church members, they are an important witness to the Judeo-Christian tradition that has always opposed economic arrangements that exploit the poor. “If you lend money to my people, to the poor among you, you shall not deal with them as a creditor; you shall not exact interest from them” (Exodus 22:25). We should be protecting the most vulnerable in our midst. Let’s not protect a predatory industry that makes its profit by exploiting them. 

-Rev. Sara Olson Dean, Wessington Springs 

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