Judge Won’t Buy|Payday Lenders’ Claim

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     PIERRE, S.D. (CN) – South Dakota need not rewrite a ballot description for an initiative capping payday loan interest at 36 percent, despite lenders’ objections that it will ruin them, a state judge ruled.
     A payday lender sued Attorney General Marty Jackley on June 5, claiming his ballot description failed to state that the measure’s purpose was to drive payday lenders out of South Dakota.
     Hughes County Court Judge Kathleen Trandahl disagreed in her Friday ruling.
     “The Attorney General’s explanation states that the purpose of the initiated measure is to establish a limit or ‘cap’ on the amount that certain money lenders may charge on loans,” Trandahl wrote. “This maximum total amount for all charges, including interest and fees, is 36 percent (annual percentage rate).” (Parentheses in ruling.)
     Trandahl rejected the request of plaintiff Erin Ageton, who, the judge noted, “went so far as to suggest that the following language be added to the Attorney General’s explanation: ‘The initiated measure, if adopted, will eliminate short-term loans in South Dakota.'”
     The judge found that the Attorney General’s statement as written fully discloses the legal ramifications of the law: “First, the initiated measure creates a new misdemeanor crime that would subject a lender to criminal penalties for violation of the initiated measure. Second, the initiated measure creates civil legal consequences if the loan is made in violation of the initiated measure, which results in the loan being void and the lender being foreclosed from collecting any principal, fee, interest or charge.”
     Jackley, to no one’s surprise, agreed with the ruling, saying, “The court has reaffirmed the fairness of this process.
     “Pursuant to South Dakota law, I have worked to provide a fair, clear, and simple summary of the proposed measure in order to assist our voters,” Jackley said in a statement.
     Trandahl allowed a letter to Jackley from one of Ageton’s attorneys, Sara Frankenstein, to become part of the record, as it “evidences … that Jackley was aware of [petitioners’] position that the ‘purpose and effect’ of a cap of 36 percent is the elimination of short-term credit in South Dakota.”
     Citing the South Dakota Supreme Court’s 2004 ruling in Schulte v. Long, (superseded by statute,) which the state supreme court upheld in South Dakota Federation of Labor AFL-CIO v. Jackley, (2010, citing Schulte), Trandahl wrote that the court “cannot be concerned with what the Attorney General should have said or could have said or what is implied or suggested by what he did say. Rather, we must focus on the language chosen.”
     Trandahl concluded: “The Attorney General walks a fine line to ensure objectivity and neutrality. Language that might be desired by one side of the issue could subject the Attorney General to challenge by the other side as it would be considered advocacy rather than neutral explanation. This court concludes that Jackley did not abuse his discretion …” The judge denied writ of certiorari.
     Ageton’s attorney Rebecca Mann told Courthouse News that she “respectfully disagree(s)” with the ruling and is “exploring all options, which may include an expedited appeal as provided by law.”
     “The people of South Dakota have a right to know the purpose, effect, and legal consequences of what they are signing, and the current language does not provide that. This measure would eliminate short-term loans, making it nearly impossible for many South Dakotans to borrow money when facing tough times,” Mann said.