Film shows sky did not fall when payday lenders stopped charging 574% interest

South Dakota – A new 30-minute documentary released today by the Center for Responsible Lending (CRL), in cooperation with South Dakotans for Responsible Lending, follows the movement to cap the state’s payday, car title, and installment loan interest rates, which previously soared up to 574%. The film captures the relentless spirit of the broad coalition of South Dakotans that took on the firmly entrenched and well-financed predatory lending industry – and won. A resounding 76 percent of voters passed Initiated Measure 21, which capped interest rates on these loans at 36%.

Let My People Go: South Dakotans Stop Predatory Lending features stories from people stuck in the trap of these high-cost loans during the time that predatory lenders had free rein to charge triple-digit interest rates. South Dakotans from Sioux Falls, Rapid City, and Eagle Butte speak of lenders’ harmful practices, the difficulty in escaping the trap, and the freedom they feel once they are no longer paying on such high-cost loans. The film also shows what happens to former payday loan stores, many now occupied by churches, credit unions, restaurants, and other productive and helpful businesses and organizations.

The film itself is a powerful example of people sharing their stories of the harms caused by predatory lending practices, as well as their ability to change them.

“When we’re vulnerable with our stories, there is more power in our voices,” said Lakota Vogel, Executive Director of Four Bands Community Fund, which is located in Eagle Butte on the Cheyenne River Indian Reservation. “It’s important to create space for people to tell their stories, either through organizations such as ours, or through churches or community groups. If we come forward and tell those stories, we build collective power. This makes us stronger to change things for the betterment of all.”

Bipartisan cooperation and strong faith leadership marked the campaign. One co-chair was a conservative pastor and former Republican lawmaker, the other a noted Democrat strategist. Other diverse groups concerned about the well-being of South Dakota’s working families contributed grassroots legwork to passing the reform.

"South Dakota has an inspiring story to tell. It is a story about how everyday regular people can come together to take on giants like the payday lenders,” said Steve Hickey, former South Dakota legislator and co-chair of the rate cap campaign. “At one time, predatory payday lenders just seemed like part of everyday life. Now they’re gone. I hope our story emboldens working people and families in other states to do the same.”

South Dakota became the fourth state to pass a ballot measure capping interest rates on payday loans.

“Fifteen states and the District of Columbia now stop the payday lending debt trap by enforcing usury caps of 36% or less,” said CRL EVP and Director of State Policy Diane Standaert, who co-produced and co-directed the film. “South Dakota’s rate cap saves South Dakotans an estimated $84 million a year in fees that would otherwise be paid on high-cost payday, car title, and installment loans.”

“As a lender, what is important to me is our borrowers are able to see there is indeed a positive end to the cycle; there is a way to come out of it. Within the payday loan cycle, you’ll never see an end,” said Onna LeBeau, Executive Director of Black Hills Community Loan Fund in Rapid City, who is featured in the film. “Our clients still have access to credit, but they use the credit as it’s intended to be used, to buy a house or a car and not to get them from payday to payday.”

For more information, or to arrange an interview with a CRL spokesperson on this issue, please contact Ricardo Quinto at ricardo.quinto@responsiblelending.org.