A special report presented this week by Stand Up Missouri asserts that Missouri’s small-loan ballot initiative is an effort by special interest groups to circumvent the legislature and mislead the public.
A special report presented this week by Stand Up Missouri asserts that Missouri’s small-loan ballot initiative is an effort by special interest groups to circumvent the legislature and mislead the public. “Although the initiative is claimed to be an effort to protect Missourians from high-cost loans,” the report states, “it's simply another example of a special-interest group taking advantage of the system.” The report points out that the “misnamed initiative” would actually eliminate all small-dollar lending in the state, including “an important small-dollar lending option for consumers in Missouri-traditional installment loans (TILs).” Although TILs are fundamentally different from the higher-cost loans with balloon payments apparently being targeted by the initiative, these traditional installment loans would also disappear from the state if the initiative passes.
The report quotes Tom Hudgins, chairman of Stand Up Missouri, a nonpartisan coalition dedicated to educating Missourians about their right to informed credit choices and continued access to safe and affordable traditional installment loans. Hudgins expresses concern about the ballot initiative’s impact on middle- to moderate-income consumers who use traditional installment loans when emergencies strike: “If traditional installment lenders were eliminated in Missouri, what would our customers do? Where would they go? When the transmission breaks down, or when your children need medical attention? Businesses would close down and thousands of jobs would be lost.”
On April 6, the Circuit Court of Cole County found that the ballot initiative title was indeed likely to mislead voters, because it failed to accurately assess its economic impact on Missouri by disregarding its detrimental effect on traditional installment lenders and other safe and affordable credit options. In his ruling, Judge Daniel R. Green vacated the petition used by the initiative’s proponents to gather signatures for the ballot initiative. The Missouri attorney general is currently appealing Judge Green’s decision.
Missourians have relied on traditional installment loans as a safe and affordable option for personal and household credit for over 50 years. If the initiative goes on the ballot in November and passes into law, TILs will disappear from Missouri and with them, a vital credit option for over 180,000 Missouri consumers.