Opponents of interest rate cap seeks to prevent I-164 certification

2010-08-19T18:02:00Z 2010-10-07T11:05:00Z Opponents of interest rate cap seeks to prevent I-164 certificationCHARLES S. JOHNSON Gazette State Bureau The Billings Gazette
August 19, 2010 6:02 pm  • 

HELENA — Rebuffed by the Montana Supreme Court, opponents of an initiative to cap interest rates charged by payday lenders asked a Helena district judge Thursday to stop the secretary of state from certifying it for the November ballot.

An attorney delivered the legal document to Secretary of State Linda McCulloch’s office at 1:14 p.m. Thursday to stop certification of Initiative 164.

However, McCulloch’s office had already had sent out separate e-mail notices at 11:45 a.m. to election officials in the 56 counties certifying the candidates and measures for the fall election ballot, said Harper Lawson, McCulloch’s chief of staff.

By law, the secretary of state’s office is required to issue the certifications by Thursday, 75 days from the election, Lawson said.

Attorneys for Bernard Harrington of Billings, treasurer of the Coalition for Consumer Choice Against I-164 and an owner of some payday loan businesses, took the legal action.

They asked Helena District Judge Kathy Seeley to prohibit or temporarily stop McCulloch from certifying the ballot statement drafted by Attorney General Steve Bullock’s office earlier this year and amended by the Supreme Court this week for the November ballot.

I-164 would cap at 36 percent annually the interest rate that payday and title lenders could charge customers for their loans.

Harrington and his group were thwarted by the Montana Supreme Court earlier in the week in their attempt to have I-164 struck from the ballot. They contended that I-164’s statement of purpose failed to specifically mention that Montana consumer loan licensees are covered by the imitative and thus the measure should be taken off the ballot.

A majority of the Supreme Court denied the request, but did slightly amend the for-and-against statements and statement of purpose that will appear on the ballot for I-164.

Harrington’s attorneys said the court’s amendments voided all the petitions signed by Montana voters because people signing the petitions saw different versions of the initiative than voters would see.

“Regrettably, this is a risk that the I-164 proponents ran by starting their initiative campaign at the eleventh hour and then submitting a proposed statement to the attorney general, which required at least one set of revisions,” wrote attorneys Milton Datsopolous and Terance Perry and Chris Gallus of Helena.

Without a court order, McCulloch may unlawfully certify I-164 for the ballot Thursday, they said.

“By doing so, respondent (McCulloch) — perhaps unwittingly — will have allowed a bait and switch in which Montana voters will have signed petition pages on one statement, but will be asked to cast votes on a measure bearing a different statement,” Harrington’s lawyers said.

Backers of I-164 criticized the filing.

“This is just the type of dirty tactics we expect from the predatory lending industry,” said Matt Leow, field director for 400 Percent is Too High — Cap the Rate. “Greedy special interests with deep pockets will go to great lengths in their efforts to deny Montana voters a deciding voice on this issue.”

Leow said the Supreme Court’s changes were not substantive because the basics of the measure have not been changed.

“Payday lenders charge Montana families annual interest rates of 300 to 650 percent, while car title lenders charge 300 percent interest,” Leow said. “I-164 will reduce the rates these lenders may charge to 36 percent.”

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