Missouri Supreme Court Rules on Cash Advance Loans
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UPDATED: Aug 7, 2012
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On Tuesday July 31, the Missouri Supreme Court ruled that cash advance interest rates should be capped. Voters must decide on the issue on the upcoming ballot in November.
If approved in November, the interest on cash advances—as well as all other small consumer loans—lent within the state would be capped at 36 percent. The average interest rate for these types of financing is currently at a towering 445 percent.
“Missouri’s borrowers currently pay significantly more in interest on payday loans than borrowers in any other state in the nation,” said Katie Wood, a local community leader, to the Hannibal Courier-Post.
Voters are expected to vote in agreement with the Supreme Court’s decision.
“This is great news and a clear victory for the democratic process,” said Wood. “Now the voters will decide if Missourians should cap the rate on payday loans or if payday lenders can continue to run roughshod over our citizens by charging borrowers more than 400 percent interest.”
Missouri is seemingly united in driving out the industry from their borders.
“I think it’s a bipartisan issue all over this state. We have community leaders like Katie and Branson Wood in Hannibal and state leaders from every corner of Missouri united on this. This is an opportunity for justice and to help Missouri’s economy and working people,” said State Representative Mary Still in an interview with the Hannibal Courier-Post.
Commenting on the ongoing national backlash against the cash advance lending industry, Still said, “I would say this industry is on its last legs in Missouri with the high interest rates they were charging. I am thrilled about it.”
Leading the charge to push the cash advance cap onto the November ballot was the group Missourians for Responsible Lending. The group managed to obtain enough signatures to qualify for putting the issue forward. The signatures await verification and certification by state authorities but Rep. Still doesn’t believe that process will be a problem.
“We turned in 180,000 signatures-double what we needed-so I feel confident the signatures will be certified,” she said.