This article first appeared in the St. Louis Beacon, April 27, 2012 - Missouri Auditor Tom Schweich’s court victory this week is seen by his staff as likely to keep alive the effort to cap interest rates on payday loans.
And Schweich appears to be happy about the prospect. “The payday loan industry spreads money around Jefferson City like butter, and this is only the latest attempt to protect their 400 percent interest rate on payday loans,” the auditor said in a statement.
Start of update: But Chuck Hatfield, the lawyer for the payday loan industry, disagrees. "I don't think they understand the law on this," he said. End update.
Cole County Judge Daniel Greene ruled Thursday against the payday loan industry’s effort to force Schweich to write a new fiscal note for the initiative-petition proposal to cap interest rates on payday loans.
The fiscal note estimates an issue’s cost to governments, state and local. The note must appear on petitions and on the ballot.
If Schweich had had to write a new fiscal note, said spokesman Spence Jackson, his action would have negated all the tens of thousands of signatures collected on petitions that seek to cap interest rates on such loans to 36 percent.
The initiative-petition backers would have had to start from scratch and likely could not have made the May 6 deadline for submitting their petitions to Secretary of State Robin Carnahan’s office.
The rates are currently 400 percent or more annually. Those in favor of the 36 percent cap say it would reduce the costs for the poor, who are most likely to seek such loans. The industry maintains that capping the rates will be make such loans far less available.
Both sides are still battling in court on various aspects of the petition effort, but Thursday’s ruling was helpful to the forces supporting the cap, Jackson said.
“We’ve preserved their work,’’ he said.
Jackson emphasized that Schweich, a Republican, isn’t taking sides on the issue. “Our aim is to give voters the opportunity to vote on that in November,’’ Jackson said.
Start of update: But Hatfield maintains that Greene's ruling could kill the payday initiative-petition effort because the judge earlier had tossed out Schweich's original fiscal note and Carnahan's ballot summary.
"Those signature don't count because they are being collected under a defective ballot title and a defective fiscal note," Hatfield said.
He asserted that it's the pro-petition camp's appeal of those earlier rulings that is keeping their petititon drive alive, "not anything Tom Schweich has done."
"They are taking a chance" that the appeals court will side with them and restore the old fiscal note and ballot summary, Hatfield added. End update.
Schweich also has ordered his staff not to write any additional fiscal notes until the Missouri Supreme Court acts on a different judge’s ruling that the auditor doesn’t have the authority to write up fiscal notes at all. The high court has yet to schedule a hearing on Schweich's appeal.
Jackson said Schweich's decision to hold off on other fiscal notes won't affect any of the current initiative petitions in the field, since the deadline is so close.
One of those initiative petitions – which calls for increasing the state’s minimum wage to $8.25 an hour – got a boost this week when Cole County Circuit Judge Jon Beetem ruled in favor of Carnahan’s ballot summary.
But Beetem has yet to rule on a separate suit that challenges Schweich’s fiscal note for the minimum-wage proposal. And he’s the same judge who ruled earlier that Schweich didn’t have the authority to write any of them.
