Good news/bad news on Missouri's payday loans

News broke today on the Missouri payday loan petitions and the effort to get the whole mess on a ballot this Fall.

If you've been following this, there have been people in the state, trying to get an initiative voted on this Autumn so payday loan businesses would be more regulated than they are. At present, they are very loosely regulated and the interest rates they charge sometimes exceed 400%. It's shameful. What used to be looked down on in any form as usury--and there were laws against loans, period--is now virtually a lawless "Wild West" of predatory loans.

So here's some good news out today:

Supreme Court ruling clears way for payday loan and minimum wage petitions

Missouri voters may get a say in November on whether to raise tobacco taxes, increase the minimum wage and limit interest rates on payday loans after a state Supreme Court ruling Tuesday.

A variety of legal challenges were filed seeking to keep three initiative petitions addressing those topics off the Nov. 6 general election ballot. Tuesday’s ruling means the petitions are now eligible to appear on the fall ballot if the Secretary of State’s office determines supporters gathered enough valid signatures.

In its ruling Tuesday, the high court unanimously rejected six separate legal challenges that claimed ballot descriptions for the petitions were insufficient or unfair. The descriptions were prepared by the Secretary of State’s office. Four of the six challenges dealt with payday loans.

So this is some great news, really.

And for anyone who would ask why Missouri needs such a measure to vote on at all, they can look no further than a study by the Pew: Charitable Trusts, also released today, showing the 9 worst states for payday loans, with Missouri squarely in the number 2 spot:

2) Missouri
%19> Median income:
> Number of payday lending storefronts: 1,275
> Pct. below poverty line: 15.3%
> Median income: $44,301

The state of Missouri prohibits payday loans above $500 and requires loans to have a minimum term of 14 days and a maximum of 31 days. The state also prohibits lenders from charging a total of more than 75% of the principle in interest and fees on any loan. However, these policies do not protect Missourians who take out payday loans, which can legally be accompanied by an APR as high as 1,955% for a two-week $100 loan, according to the Center for Responsible Lending. Much of the industry’s profits in Missouri, 90% according to Communities Creating Opportunities (CCO), are derived from borrowers who are consistently paying off past debts to avoid default. According to Molly Fleming-Pierre, Policy Director at CCO, after Joplin, Mo., was ravaged by a tornado, payday lenders were among the fastest to arrive at the scene.

Naturally, these companies prey on the poor, which is bad enough, but they also prey on young American soldiers with storefronts right outside and nearby army and other military bases. It's disgusting.

So good for us, at least for now. People are creating petitions and getting out there and having others sign them so we can vote on this foul business. I will also mention, in case you weren't aware of it, the Catholic Church, statewide, has gotten behind this measure, too, so I'm personally very grateful for that. Hopefully more churches are also behind it.

I will say, too, as one last note, if you go to the link to the article, below, you'll see that Kansas, Oklahoma and Texas are also on the list, with Kansas at number 7.

If an end isn't put to this, at least it should be regulated, first, and curbed, second. The military and poor deserve far better than this. We owe some decency and fairness to them and to all humankind.

Links: Nine States Where Lenders Take Your Paycheck - 24/7 Wall St. http://247wallst.com/2012/07/27/nine-states-with-the-most-payday-lending/

http://www.news-leader.com/article/20120801/NEWS01/307310085/Supreme-Court-ruling-clears-way-payday-loan-minimum-wage-petitions?odyssey=mod%7Cnewswell%7Ctext%7CSpecial%20Reports%7Cs