AARP Says There Needs To Be A Cap On APR
A state with no usury laws means interest rates can exceend 50 percent
A poll conducted by American Association for Retired Persons, (AARP) of South Dakota, shows that 63 percent of South Dakotans over the age of 50, are in favor of capping high interest rates on payday and auto title loans.
South Dakota is one of only seven states that does not regulate how high these rates can go. The AARP says that the older generation are likely to hurt more from the increased rates.
“How strongly do you agree or disagree that South Dakota law should be changed to cap interest rates and fees that payday and auto title loans businesses can charge borrowers at 36 percent?”
That’s the question that Sarah Jennings, South Dakota Director of AARP, says was asked to over 900 South Dakotans from Sept. and Oct. 2015.
“We hope that this is something that will spur people to take action,” she adds, “because obviously we all feel strongly about this issue or so many people do across the state.”
South Dakota doesn’t have usury laws, or laws that regulate interest rates. But for 58-year-old Myron Beauvais Sr. sometimes a loan is the only option.
“I feel like you are more likely to go for whatever they say when you need the money,” says Beauvais, “it’s taking a big chance. But that’s life for me.”
Beauvais received his loan instantly from the Dollar Loan Center. He says that he was told about missed payments.
“Well, if you pay on time then it’s alright, but if you don’t? I don’t think it’s very much.”
But the Dollar Loan Center website says, depending on the loan size, the annual percentage rate (APR) could be as high as 363 percent; and there, Jennings says, lies the problem.
“We believe that we really do need to take action so that no South Dakota family gets in the situation that using one of these products can often put themselves in.”
‘South Dakotans for Responsible Lending’ needs more than 13,000 signatures to get this on the ballot.
KDLT News did reach out to the dollar loan center today — they declined to comment.