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Q. Thank you for discussing the differences between Amendment U and Initiated Measure 21 on payday loans. But I think you missed the mark when you didn’t point out that one of the proposed laws is an amendment and one is an initiated measure. Can you clarify the difference between the two and offer more information for the still-undecided voter?

A. You have made an excellent point, and since I’ve received a number of comments on my last column, I think it is worth the time to offer more information on this issue.

To clarify, South Dakotans are not voting on whether payday lending should be legal. Under the provisions in Amendment U and Initiated Measure 21, payday lending will remain legal. Initiated Measure 21 limits the interest rate to 36 percent , while Amendment U does not limit interest rates for written payday loans. Payday loans are in writing, so don’t be confused by any verbal limits — they would be ineffective.

An amendment supersedes an initiated measure. So if a person votes yes on Amendment U and yes on Initiated Measure 21, believing that there should be increased regulation on payday lending, then the result will actually be no regulation of interest rates on payday loans. The amendment will trump the initiated measure. Therefore, the 36 percent cap on payday loans will not exist, and payday loans will continue to have unlimited interest rates.

If you would like to see the interest rate on payday loans regulated, then you would vote yes on Initiated Measure 21. But you must also vote no on Amendment U. On the other hand, if you want interest rates on payday loans to remain unlimited, you would vote yes on Amendment U. Then it doesn’t matter whether you vote for or against Initiated Measure 21.

If you like having access to payday loans, then it would be in your best interest to vote no on Amendment U and yes on Initiated Measure 21. This would cap the interest rate at 36 percent on a payday loan, which a better deal than what is currently available. While 36 percent may seem high, you need to keep in mind that a payday loan is a short-term contract, and it is riskier than some other kinds of loans.

If you would like more regulation on payday loans, then you would also vote no on Amendment U and yes on Initiated Measure 21. While this would not stop payday loans, which isn’t an issue on the ballot, it would at least limit the interest rate to 36 percent.

Regardless of the stance you take, it’s important for you to make your voice heard. Please take the time to consider the provisions of Amendment U and Initiated Measure 21 and vote on Nov. 8.

Bonnie Spain is the executive director of Consumer Credit Counseling Service of the Black Hills, a United Way member agency. To contact her, email

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