SIOUX FALLS, S.D. - A new Sioux Falls business says it's filling a huge need after voters passed Initiated Measure 21, which put a 36 percent cap on interest rates and caused payday lenders to close across the state.
Emily Degen is the branch manager of the new LPI Loans location in Sioux Falls.
"There are not a lot of options for people here, and we've been hearing that from a lot of customers so far," Degen said.
Within the first month, the finance company did 30 loans.
"We're here for those who might have had some unfortunate events in the past that can not get financing through a bank or credit union," Degen said.
Degen says the company is filling a huge need after payday lenders left the state, following Initiated Measure 21. Voters approved the measure, which put an interest rate cap on payday lenders.
"We worked with our lawyers to make this company a subsidiary of our bank holding company, Beresford Bancorporation. That's how we got around that. Banks, bank holding companies and credit unions are exempt from Initiated Measure 21," LPI Loans Owner Robert Farrar said.
Farrar says the company handles very small loans that credit unions and banks usually don't deal with. It also doesn't pull a credit score.
"People were going to illegal online lenders and pawn shops and paying exorbitant rates," Farrar said.
While there is just this one location in South Dakota right now, the owners say if it's successful, they'll open up several more across the state.
"It's a product people need. There's a big need for this kind of thing," Farrar said.
"We're here to help people who can't get a break anywhere else," Degen said.
A break that this new business is banking on.
While Farrar says the company does not have to follow IM 21, right now the highest interest rate the company has is 36 percent. IM 21 capped rates at that number.