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Could payday lenders come back to Southern Dakota?

Could payday lenders come back to Southern Dakota?

Simply an interest rate cap on pay day loans wasn’t enough.

The set of lawmakers whom crafted the language in Southern Dakota’s current restrictions on payday advances, which restrict rates of interest to 36 %, knew the industry would try to look for techniques to work across the guideline.

So they really included some additional defenses into the statute, making use of language meant to stop non-bank loan providers from making use of any “device, subterfuge or pretense” to circumvent the state’s price limit.

Loan providers have discovered a method to complete exactly that, partnering with banking institutions to have around comparable defenses various other states

Now loan that is payday seem to have the aid of federal regulators, and state officials are worried regarding how well South Dakota’s statute will endure.

“We expected that there was clearly likely to be some erosion,” said state Sen. Reynold Nesiba, D-Sioux Falls.