Battle lines have been drawn over a ballot initiative to regulate the short-term loan industry.
A rally Wednesday to thwart the petition drive drew hundreds of loan business people to the Capitol steps.
For years, critics of the short-term, high-interest loan industry have sought to put limits on the business. Columbia Democrat Mary Still would cap the interest rate at 36%.
“It will not (cut off access to money),” Still said. “You can get loans at credit unions and they can make money at 36% as well.”
Traditional installment loan company workers say an initiative petition that targets payday loan stores will put them out of their jobs.
“It overreaches and eliminates traditional installment loans which are safe, responsible and needed,” Stand Up Missouri's Tom Hudgins said.
These advocates say it's a question of choice for people who often cannot qualify for bank loans.
Critics draw no distinction between payday loans and traditional installment loans, which can also feature triple-digit interest rates.
“Seventeen other states and the District of Columbia have put interest-rate caps on small-dollar loans and we've found that in states like North Carolina or Florida that they can still make reasonable, ethical loans at lower interest rates,” said Sean Soendker Nicholson of Progress Missouri.
Both the ballot initiative and legislation filed in the General Assembly would set the cap at 36%.
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