I don’t think I’m telling you anything you don’t know if I note that I think a lot of Governor Daugaard, and believe him to be a good an decent person. But, I’m truly, truly disappointed in him for a statement he made this past week.
South Dakota will be fine without payday lenders that pay excessive interest rates, Gov. Dennis Daugaard said Friday.
The statement came in response to the news that dozens of short-term lenders across the state plan to shutter following the implementation of a voter-approved cap on the industry’s interest rates.
“Certainly to the extent that they were only economically viable because they are subsidized by the earnings from excess interest charges, it’s certainly unfortunate, but I don’t think it justifies unreasonable interest charges,” Daugaard told Argus Leader Media. “So if we have to do without those things, then we have to do without them.”
It’s not the first time it’s happened, where the Governor has seemingly substituted his personal morality in an issue and expressed a desire to limit freedom. If you recall the 2013 fight over changing laws to allow MMA fights to happen in South Dakota:
South Dakota Gov. Dennis Daugaard says he opposes a bill that would create a state athletic commission because it would legitimize mixed martial arts fights, events he says are so violent they don’t deserve to be called sports.
and..
But Daugaard says he is offended that the state would legitimize what he calls cage fighting. He says it’s absurd to call such violence a sport.
Along similar lines as his opposition against Mixed Martial Arts bouts because he likened them to “violence,” we again had the Governor speaking out because he believes businesses charging a sufficient amount to cover the costs of loaning money for a matter of a few weeks or months is not something they should do in South Dakota.
For long-time readers, I don’t think I have to express my personal disdain for the nanny state.
Why would we spend millions in tax dollars through state government for economic development to attract businesses, when the Governor declares that we only need certain businesses that he approves of, and we’ll do fine without them? I think it’s an incredibly dangerous thing for the Governor to say.
Because what happens if another Governor comes along and decides they dislike a certain type of mining? Or wants to ban energy production from the use of coal?
I’m sure I could argue until I’m blue in the face that there are going to be a number of people of common means affected by the loss of short term lending, as very few (or no) banks are going to want to take on the high risk/low return lending activity at an unsustainable lending rate. Because now, those disenfranchised people are going to be stuck.
But as big an issue as that will become, there’s a bigger one. We’ve established that sparsely populated South Dakota’s is a little less free. And we’ve started down the road our chief executive telling us we’ll be “fine” without a certain type of business.
Personally, whether or not I chose to patronize them is a decision I would have rather made myself.
Well said. Also, with tax revenue waaaay down, I don’t think the governor is in a position to opine on the types of businesses we should have in our economy. Clearly he hasn’t done enough to diversify our portfolio and now he’s willing, nay wanting, to divest parts of the financial sector.
Couple this with his and office’s tweets during the election about Trump which led to his being asked to step aside from the ag advisory committee, the governor has given up a seat at the table when it comes to advising on trade and ag issues.
2019 can’t come soon enough for a governor who came into office with the tough love we needed by cutting the budget across the board. He’s ending his tenure embroiled with scandals, budget short falls and vitriol toward a Republican administration in Washington that is determined to grow jobs in America. Sadly, I don’t think that South Dakota jobs will be high on the list for Trump after the governor’s poor judgement and performance.
100% agree
MIke Rounds right hand man for 8 years !
That doesn’t make any sense.
And we will do fine without Governor Daugaard
Again, I like Dennis, but his comments on this came out of left field.
I’d point out that it wasn’t Governor Daugaard who acted to drive out Payday Lending. It was the voters.
I suppose the voters were stupid on this one too. Repeal it, we can’t let the “stupid” voters make the choice, say those that voted for Duuubbyyaa twice and now to turn the White House into Kremlin West…
No charges of nanny stating from this blog against the GOED incentives for biz. Selectively free-market Repubs in SD see nothing wrong with incentivising industry that is good for our state. This is merely decentivizing industry that isn’t good for our state, and by not good I mean costs taxpayers dearly in other ways. This is sending a message that business in South Dakota needs to be win-win or we don’t want it here. No place here for the poverty industry who only win when the poor and elderly lose.
I applauded Daugaard for taking a stand against cage fighting. And he’s right here too.
Steve Hickey is not a person I’d want cheering my actions. He’s just a liberal who hates abortion and gay sex.
http://www.slate.com/blogs/outward/2014/05/07/steve_hickey_obsessed_with_anal_sex_makes_new_crude_analogy.html
Please, I’m reading over lunch.
I too was disappointed with the Governor’s comments. I’m no fan of that industry, but then I don’t like Remington’s either (a Winchester or Benelli please), but why disparage a business that obviously meets a need in the marketplace (they weren’t making loans to inanimate objects).
The people that so hated this industry have yet to explain what will step into that need in the marketplace. Best guess: Guino and/or off-book, unregulated loans by folks you don’t want doing business in the state
Have either the Governor or Pastor Hickey suggested any alternatives to the businesses they object to?
As you say, they weren’t making loans to “inanimate objects.”
William, I’m been saying these kinds of thing over and over and over again. Turn up that hearing aid.
1. Some should not be lent money as they have no capacity to pay it back. The irresponsible lenders don’t care because they get paid back with the bigger loan the debter gets from across the street.
2. Assuming people going for a PAYDAY loan have jobs and a paycheck coming in, we encourage these people to ask their employer for a payday advance at zero interest. Maybe there is a legislative way to incentivize or encourage our small and large businesses to offer an employee benefit in the form of 2-4 payday advances a year. We challenge our business community to be good corporate citizens in the regard. We’ve heard loud and clear that employers hate the hassle of these lenders in garnished wages and illegal collection activities, even re-possessing cars which make it harder to get to work. But, come on, these loans are supposed to be PAYDAY loans. If indeed a payday loan is needed it should come from the person issuing the pay check. This is a great way for our business community to give back as a thank you for the low-tax, low-regulation environment they enjoy here in South Dakota.
3. Some states (like PA) help credit unions fill the need for small dollar loans by offering a loan guarantee so lenders can better afford the risk of making these types of loans affordable. That would entail our state government allocating a fraction of it’s reserves to loan guarantees for the poor. This should be a no-brainer because the state and taxpayer pay so dearly when these unscrupulous lenders toss these people in a far worse condition to the curb. These are all good ways forward to actually help the poor.
4. Even Gordon Howie is to be commended for offering a low-interest non-profit healthy alternative to payday lending and these models increase in states with rate caps.
5. Need some political leaders brazen enough to challenge the big check writers in our state to group up to help the poor instead of building more stadiums with their names on them. To whom much has been “given” (through our lax usury laws), much is expected.
6. We have a network of over a 1000 churches who care about helping people in real financial crisis.
It works this way. Go to your church, or if you don’t go to a church, show up at one. Explain your legitimate need. Be open to advice. In a city like Sioux Falls be willing to be sent to the Community Church Crisis Fund office which many city churches give to for this very reason. They weed out the bums who are just on the take. Bills get paid – medical, utility – there are grocery vouchers, aid for rent, car repairs. Our church folks regularly gives cars – a better thing to do when upgrading your car is to give the old one away as the dealer won’t give you much anyway. On occasion we’d take special love offerings to save a member in financial crisis from foreclosure. We’d require they enrol in Dave Ramsey’s Financial Peace University.
Need some political leaders who champion good old fashioned South Dakota neighbourliness and our state will be just fine without these lenders bilking 80 million a year in fees alone from our state’s poor.
I could go on and on. BTW, the sky doesn’t fall on the poor in the 15 states where the rates are capped. There is no increase in crime. There is no increase in online leading (any greater than non rate capped states).
If all businesses were okay in our state we’d still have brothels. I know Lee well enough to know he knows better than to compare these loans with just another product for sale out there like Winchester or Remington. This is more comparable to a brand that blows up in your face while the rest of us get to take car of your family.
Where’s Steve’s lending program?
He doesn’t have one. He just dumps it on everyone else and says figure it out.
What “leadership.” Or maybe I should form that as a question in reference to Steve. “What Leadership?”
It’s been reported a few times that the thing that got me mad enough to do something about this blight on our state was that I was weary of the numerous times I’ve bailed people out of these loans personally and as a pastor. My money is where my mouth is on this one and that can be easily verified.
“Turn up that hearing aid”
Seriously?
Apparently, Steve has added mocking people’s disabilities to his repertoire in his time trying to study the word of God.
Sad!
Between mocking people with disabilities and attacking the veracity of sex assault victims, it’s a wonder Steve gets anything done.
I’m sorry for the zinger, William. Docs say I need one too.
Pat, when will you start blocking for me all the low blows that come my way from your anonymous groupies here?
You publicly attacked the veracity of a victim when the perp acknowledged most of the conduct. And if you used the CFPB mandate for rate reporting, the Morrell’s credit union would be over the 36% rate cap when you add in the application fee and the membership assessment for non-associated employees for any two week loan of less than $500. Keep spewing the lies and misinformation Steve, it suits you.
Morrell’s credit union isn’t effected by the rate cap.
And no one knows who the victim is – which is good – and we can all hope law enforcement will do their job – which isn’t btw to ignore extenuating circumstances. All that can be done behind the scenes with the victim not even being aware, much less harassed.
Pat keeps tolerating off topic smacks from the anonymous spite-rs.
Which is why you publicly questioned the veracity of the victim. Bravo. Extenuating circumstances of sex assault? She was asking for it by wearing that dress? She wanted it? This is a new low, even for you.
On topic, of course the credit union isn’t regulated by the measure. The point is you’re suggesting someone with short term loan needs go to an entity that is charging over the rate you railed against. That makes you a hypocrite. Further, you’re suggesting they go to an entity that doesn’t pay taxes at the expense of an entire industry and close to 500 employees. To which you’ve stated that you don’t feel for those employees at all, even just before Christmas. Wow, just awful.
Low blows? Ask the victim of sexual assault who you attacked as being paid by the payday lenders to set up Nesiba.
You are a low person. If you think something is low then they aimed accurately.
Ah, a “zinger!”
How could one have missed that…
Right on. Where can these people with no credit or assets get a loan to fix their junker so they can, in some cases, get to work? The banks certainly won’t and currently don’t. Maybe Hickey’s church will.
The credit union at Morrell’s in Sioux Falls offers $1000 at 18%. So does Black Hills Credit Union. I expect to hear more in the near future on the ways the credit unions are re-positioning to help people.
People in Sioux Falls can ride a bus anywhere in the city and still get to work. 56 loan shops were in Sioux Falls. There were 110 loan shops statewide effected by the rate cap.
A few years back the Credit Union Association of the Dakotas leaders lamented to me how they were talking as an association about how it came to be that the predatory lenders emerged into the market that was most suited to them. I see the credit unions having an opportunity here. They get it. They know there is no way to make money on these loans but they offer them and want to offer more of them because there is a need. Like any business, there are products you make money on and products you sell where you hardly break even, or don’t. You still offer the non-money makers because your business is as much about your customers as it is about your bottom line. That’s win-win.
I’m a big fan of the credit unions and hope those reading this will be as well. We have four different banking associations in our state somehow, apparently, threatened by credit unions. I’ve been hopeful that will change.
I know of no one who would recommend a payday or title loan to a family member. Any other way forward is far better and the ease of people getting these toxic loans has diverted the responsibility off the rest of us to help our neighbor.
Neighborliness.
So Steve, how’s your drive to get that murderer Peltier out of prison coming?
I’ve shared my opinion on this one, but have not done any advocacy for it. Yep I’ve read both sides including the American Indian Mafia book Pat likes to bring up on occasion. I hate it when our justice system goes dark to get convictions they want. All Patriots should. The FBI worked as hard by any means to make sure Peltier was convicted as they did to make sure by any means Hillary was exonerated. But those aren’t my reasons for saying let him go. And, all this is off topic and Pat insists I abide by his rules. If he deletes this let’s hope he also deletes the off topic snark comment that precipitated my reply here.
“People in Sioux Falls can ride a bus anywhere in the city and still get to work.”
“Anywhere in the city?” Not quite.
And obviously, not everyone in the state lives in Sioux Falls (although, some folks tend to forget that).
Speaking of inanimate objects, I’m surprised that Gov. Daugaard hasn’t announced that we don’t need Wells Fargo in this state over the fake account scandal.
Daugaard is turning into the Bloomberg/DiBlasio of the Great Plains.
By this logic, I assume you support legalizing drugs and prostitution as well.
If you’re looking for philosophical consistency you came to the wrong place.
Short-term lenders serve a purpose in this world, unlike Steve Hickey.
Steve,
#1: This is nonsense. Bankers which depend on the greater fool go out of business when the greater fool goes out of business.
#2a: Assuming you can get both the Feds and state labor law to consent to employers become lenders (good luck), regarding your comment “Maybe there is a legislative way to incentivize or encourage our small and large businesses to offer an employee benefit in the form of 2-4 payday advances a year” you should know the answer to that since you proceeded to eliminate the current source of pay day loans.
#2b: If you heard loud and clear about opposition to wage garnishments, you think they are going to get in the business of directly deducting wages? C’mon, you know better than that.
#3: You were a legislator. I’m sure you know how big a reserve they’d have to allocate and what the loan losses would be. What is it?
#4: Good for Gordon. I hope it is successful and spreads to the rest of the state.
#5: Everyone is called to help the poor as directed by their conscience not by political leaders. Political leaders shaking them down for promises of what? Talk about corruption.
#6: Churches are called to help the poor as they feel called. If a church wants to become payday lenders, they are free to do so.
Maybe the poor will be better off and maybe not but the reality is what it is: The poor have no lender of last resort as of a month ago.
It dawned on me when you noted your reply 2a – Steve is demanding a return to a “company store” system of lending to employees much like coal mines had to their employees in the olden days.
Ask the coal miners what they thought of that.
Hey Hickey, credit union do not pay taxes!!!! No wonder they can loan at lower rate. Should be lower than 18%.
Pat,
Here is another wrinkle: Make a $1,000 loan to an employee who then quits, the IRS will consider the unpaid portion wages and the employer has to make a 15% payment for Social Security (half employer’s contribution and half employees contribution) and whatever the withholding was on those “wages” without any recourse to the employee who quit. Just try to get that rule changed by the IRS. Won’t happen because it creates an incentive for employers and employees to get loans that aren’t repaid because both avoid Social Security and withholding.
Troy, don’t you have a payroll? Maybe not. The last year I was there we had 52 w-2s on our PT/FT payroll and we’d advance dollars earned on occasion. There are ways to structure this an an employee benefit and perhaps news to you… some of us have been doing it for sometime.
Alternative lenders are all great ideas, but, there will need to be enormous revisions to the Patriot Act, Dodd-Frank, Sarbanes-Oxley, and the South Dakota Constitution
For example Steve’s #2 option makes those Businesses subject to the Money Service Business provisions of the Patriot Act designed to fight terrorist money laundering. The compliance issues are horrendous for national banks, it would be impossible for small businesses to comply.
#3 is unconstitutional in South Dakota: our state bars a public guarantee of a private debt.
#4 There are a lot of non-profits already doing this, they’re called Credit Unions. They don’t pay taxes and are free from the most onerous federal regulations. Why don’t they make higher risk loans? because they are not forced to by the Community Reinvestment Act, the OCC, the Fed, etc. Make these country clubs for money actually do something for the community rather than build big buildings and we’ll never need payday lenders again.
Thanks Pat for being very consistent with the anti nanny state positions.
Hey Steve H. and Steve H.
Since you two crusaders are on a roll when are you going to take on those mean, predatory cedit card companies like First Premiere Bank?
They too are exploiting the common folks too, right?
No, First Premiere isn’t on our radar and we’ve been clear on that all along. All they have to do is pay $150 to recharter in another state and they can keep sending their slimy high interest solicitations to our state’s working poor. Instead, as I have occasion I push them to give back since we can’t do anything about how they take.
Since you are wondering, on the short list of next steps in our war on poverty profiteers are bail bonds. They are only legal in two countries and four stands presently don’t tolerate them.
http://www.justicepolicy.org/news/4389
Pat, this is on topic – should any type of business be welcome here even if the rest of us have to pay a high price for them to make their big profits?? I provide the link only to give reference for those who have never thought before about bailing bonding being a player in the poverty industry.
four states – not four stands
Interesting group you’ve aligned yourself with, Steve.
The Justice Policy Institute
“As a member of Alliance for Justice, your organization will become part of a national association of organizations working for the public interest. You will be in the great company of more than 100 national, regional, and local leaders working for a wide range of progressive causes, including civil rights, human rights, women’s rights, children’s rights, and consumer rights, and ensuring legal representation for all Americans.”
http://www.afj.org/about-afj/member-organizations
Really interesting group, some of the pro abortion organizations Steve is hooking up with include:Planned Parenthood Federation of America ,National Family Planning and Reproductive Health Association, National Abortion Federation, Abortion Care Network, Center for Reproductive Rights and last but not least the euthanasia promoters Compassion and Choices. Steve, what the hell is the matter with you?
I’m not aligned with them or any other. That link spells out the concerns with bail bonding and I obtained it through the googles. I could easily give you five others I’ve saved in my little folder on the issue. Relax.
Not aligned, just championing their issues and using their resources to promote your personal causes?
Thanks for the clarification.
Steve,
Maybe because of your size, being a church, the nature of the advance (a few days), or how you documented or didn’t document the advance, it is permissible under federal/state labor, IRS, and lending law or ignorance of the legal procedure and didn’t get caught? I don’t know.
But I do know an employer of any size and who does it with any regularity has substantial requirements to jump through including procedures to protect themselves from not being discriminatory.
Three things: 1) I have a hearing problem. I didn’t feel slighted by Steve’s hearing-aid comment. Such jokes, exchanged back and forth, are as much a part of any old-man’s (at 65, I think I qualify) gathering as PSA-level comparisons. You’ll understand that in a few years, Pat. 2) I pretty much hunted and fished my autumn away, so I might have missed something. But I didn’t notice Dennis Daugaard crusading for the payday loan ballot measure. This is all about a comment he made to a newspaper reporter? Expressing his opinion — an opinion, I’m guessing, that most South Dakotans would share? Perhaps an overreaction on your part, Pat? 3) As is the case on many issues, Schoenbeck is wrong with the shotgun analogy. Remington beats Winchester any day. If you’d watch us shoot during the annual Blogmore Hunt, you could see that in the field. (And don’t get me started on hunting dogs, another area where he’s wrong …)
KWost –
The good news for you is twofold. First, I think Medicare covers mental health counselling. Second, Mary will wheel you into the sun every day and keep the flies off of you.
The bad news, while your political assessments may not have diminished too much (other than that Hillary thing – try and sell that back home in Lyman County!), you’re still lost on dogs, guns and meat gathering
William,
The interesting link I see between the two issues is how defeatist and small thinking they are– both deal with symptoms of poverty and pat themselves on the back for doing something.
Frankly, the war on poverty has been one big failure as every effort is really an effort to alleviate the effects of poverty by a paternalistic interest group alleviating their own guilt instead of doing the hard work to both expand opportunity and demand accountability. People rise to meet both and stick thumbs in their mouth when promised relief by the nanny state.