News & Resources

Lawsuit aims to revise short term cap proposal

Aug 23, 2011 Todd Milner

A lawsuit has been filed to challenge the wording in a ballot proposal that would cap short term loans at 36 percent in Missouri, according to the Columbia Tribune. The suit, filed in the Cole County Circuit Court, claims that language used in the proposal is misleading. It states that the cap would cost the state between $2.5 million and $3.5 million - money that could be easily made up by reducing monitoring industry compliance expenses. However, estimates from University of Missouri economics professor Joseph Haslag point to a far more burdensome financial cost. Haslag surmises that the gross domestic product in Missouri would decrease by $57 million in the first year of the amendment and $57.5 during the second year. Furthermore, the state would owe approximately $8 million in unemployment benefits to those working for the approximately 1,600 short term loan stores in the state. The suit aims to get the verbiage of the proposal revised by Secretary of State Robin Carnahan before it becomes eligible for the November ballot. According to the Missouri Division of Finance, approximately 2.43 million short term loans were made in the state in 2010, Ballot News reports.