A South Dakota lawmaker has come up with a proposal he hopes the Legislature can pass to put restrictions on the short-term loans he says can trap poor people into crippling cycles of debt.
Rep. Steve Hickey of Sioux Falls says that after he started an effort to put a proposed interest rate cap on the ballot for a statewide vote, representatives of the payday lending industry agreed to help write compromise regulations.
The bill Hickey has filed in the Legislature would not limit interest rates for short-term loans, but instead would impose additional state regulations and limit the size of loans based on a borrowers' ability to repay.
The House Commerce and Energy Committee is to hold a hearing on the measure Wednesday.
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