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Missouri groups continue to push for loan cap

Oct 17, 2012 Quinn Thomas

Many individuals have found themselves in tough economic spots since the 2008 recession. Not only were a large number of people in danger of losing their jobs, but some had to dip into savings accounts to make ends meet. If they faced an emergency expense during this time, they may have felt like the drain was never-ending. However, many found relief in short term lenders, like pawn brokers or short term lenders. But there are a some who want to restrict the amounts of loans available and the interest rates associated with borrowing. These moves could put the industry in jeopardy, adversely affecting borrowers and lenders alike. Missouri short term loan question won't be on ballot
This was the case in Missouri, but the proposed question that would have put a cap on interest rates did not make it onto the November elections ballots. Nonprofits supporting the restriction did not obtain the necessary amount of signatures needed, the Columbia Daily Tribune explained. However, some individuals will not let the issue go, despite the fact that the deadline for finalization passed in September. According to the St. Louis Post-Dispatch, a number of church leaders in the city have said they are still interested in restricting the interest rates associated with short term loans despite the fact that the issue can't qualify for appearance on the November ballot. Some members of congregations maintain that the groups did obtain the necessary number of signatures, but are being held back by authorities, the news source said. Many people affected
Should members of area churches be successful in their future endeavors, many individuals in Missouri will most likely be adversely affected. Putting caps on loans can severely limit the income of lenders, which sometimes either close their doors or stop offering the borrowing options. "As has been the case in other states, because of the numerous costs involved, virtually no operator can offer the product at that rate, and all of them will almost certainly go out of business," explained Joe Coleman, president of the Financial Service Centers of America, to USA Today, using the 36 percent cap in Arizona as an example. Should that scenario occur, many people will have to find alternative means of borrowing. According to a study by The Pew Charitable Trusts, 11 percent of individuals in Missouri take out a short term loan on a regular basis.