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percent of the borrower's gross monthly income.
• The measure also would have limited loan renewals or rollovers, allowed extended payment plans with no additional finance charge and required lenders to provide information on loans to the state Banking Division. That database would have been used to determine whether a borrower was capable of taking another loan.
• Bret Afdahl, director of the state Banking Division, opposed the bill, saying it would require his office to hire an additional four employees to oversee the additional regulations and the database. South Dakota has 396 licensed lenders of all kinds, but the state received only 12 complaints about those lenders last year, he said.
• People who need short-term loans for small amounts use payday lenders because commercial banks mostly no longer make those loans, Afdahl said.
• Carol Stewart of Advance America, a South Carolina-based company that has offices in South Dakota and 28 other states, said she worked with Hickey on the bill, but the measure still has some confusing provisions. Such a measure would only work if the state Banking Division supported it, she said.
• Stewart said her company would be willing to keep talking with Hickey and others to find a compromise measure that could pass.
• Other industry representatives said short-term lenders already are heavily regulated and their fees are reasonable because they charge a specific amount for a loan, usually payable in a couple of weeks after a borrower gets a paycheck. Those fees work out to a very high annual percentage rate of interest, but most customers repay loans on time, they said.
• Doug Abraham, a lobbyist for the Consumer Lending Alliance, which represents lenders who make short-term loans using vehicle titles as collateral, said such operations only make loans they believe will be repaid. Customers file only a handful of complaints a year, he said.
• "Frankly, we don't have a problem," Abraham said.
• Rep. Tim Rounds, R-Pierre, said he voted against the bill because it might have driven borrowers away from regulated short-term lenders in South Dakota to Internet lenders that are not regulated. Lawmakers should spend some time seeking a compromise that could be passed in a future legislative session, he said.
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