Rate Cap on Payday Loans Not Making It To the Ballot In Missouri

It seems that, for now anyway, interest rates will stay the same for payday loans in Missouri.  Supporters of a rate cap have given up trying to get the initiative on the ballot.  In the end, it was the funding that made the difference.  The law, which would cap the interest rates on payday loans at a respectable 36%, will sadly not make it to a vote this time around.  This means the rates will continue to be way above this at their average of 445% per year.  The crippling rates will continue to send the neediest of the state into a spiral of debt if something is not done, but whatever is to be done, this will not be it.  The best bet is likely education.  There is a place for these loans, but an interest cap would help a lot.

So what happened?  Grass-roots supporters started a petition to get it on the ballot, but why did they not follow through?  Well, despite countless volunteers and support from Churches and other advocacy groups, the payday loan industry simply had more money.  They spent more than $2 million fighting to keep this measure off the ballot.  This should tell the state something.  They know what they are doing, and they do not care.  They also know that had the measure made it to the ballot, it would have passed.  They were scared.

The action they put to their fear paid off, as they made it all but impossible for supporters of the bill to get the signatures they needed to get the job done.  The poor and working class of the state are who will suffer however, and it brings up another serious issue.  The opposition funneled every bit of their money through a not-for-profit that has not to date named its donors, while supporters accounted for all of the $600,000 they spent, as is noted in reports from the Missouri Ethics Commission.

What does this say for the ability of those in the state to take action for something they believe in?  Does it mean it is pointless?  Payday loans are the issue this time, but it could be anything.  It seems that if the opposition is rich enough, there is no point.  For now, the best bet for those concerned about the issue is to make sure the truth about payday lending is out there.  People should know that they are available if needed for the short term, but they also need to be aware of exactly how much it could cost them in the long term.

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