Short term lenders are often used by many individuals who are facing tough times. When an emergency expense comes up, it can be hard for a family to get back on the right track unless they have access to some extra cash to provide a cushion. However, Missouri residents may soon be facing restrictions on the borrowing options.
A judge in the Show-Me State is set to rule on a trial next month that could potentially allow new short term loan measures to make it to the voting ballot this fall. Trial may decide fate of short term lenders
According to The Associate Press, Cole County Circuit Judge Jon Beetem will be considering a case between September 5 and 7 that will decide if a proposed short term lending law will be seen on the 2012 ballot. The source explained supporters of the measurements did not garner enough signatures to make it a part of the November vote, coming in at 1,0191 supporters short. However, lawmakers are challenging the ruling, saying that some valid signatures were not counted. Those who signed the proposal, according to the AP, hope to limit the borrowing option for consumers across the state, thereby restricting their access to cash during tough times. The AP reported the measure would cap interest for short term lenders at 36 percent annually. However, when these fees are restricted, many companies have had to shut their doors or expand offerings to keep the business going. Usually, 36 percent revenue on a loan does not facilitate overhead and other expenses for lenders. Companies in the area may want to keep an eye out for the September judgement so they can rally forces against the measure if it does appear on the November ballot. Many would be affected by ruling
The most recent Missouri short term loan study released by the Better Business Bureau (BBB) revealed there is already a law in place restricting interest charges. The source said in 2002, state lawmakers passed a regulation that capped both interest and all fees at 75 percent annually, however, usury laws in the state make the cap relatively easy to bypass. The BBB study found there are hundreds of lending locations across the state, though the majority of storefronts are owned by the same handful of companies. Though the BBB stated there were around 1,275 lenders as of 2008, 56 percent of those, translating to 719 stores, were owned by the same 24 companies. Seventeen of those businesses, however, were based in other states, such as Georgia, North Carolina and Arkansas.