Michigan Payday Loan Interest Rate Cap Initiative (2022)
| Michigan Payday Loan Interest Rate Cap Initiative | |
|---|---|
 | |
| Election date November 8, 2022 | |
| Topic Banking | |
| Status Not on the ballot | |
| Type State statute | Origin Citizens |
The Michigan Payday Loan Interest Rate Cap Initiative was not on the ballot in Michigan as an indirect initiated state statute on November 8, 2022.
The ballot measure would have provided for an annual interest rate cap of 36% for payday loans.[1]
Overview
What would this measure have done?
This measure would have capped the annual interest rate and service fees a payday loan lender can charge annually in Michigan at 36%, and any violation of that rule would have rendered the payday loan void and unenforceable. The measure would have allowed the attorney general to prosecute those who charge beyond the maximum cap.
What is a payday loan?
A payday loan is a short-term cash loan that is typically due in a single payment two to four weeks later. The maximum loan amount varies by state, but varies between $200-$1,000. These loans generally have high interest rates. According to the Consumer Financial Protection Bureau, a $100 payday loan with a $15 fee that spans two weeks equates to an annual percentage rate (APR) of almost 400 percent.[2]
Did other states cap annual interest rates for payday loans?
According to the Center of Responsible Lending, 18 states—Arkansas, Arizona, Colorado, Connecticut, Georgia, Maryland, Massachusetts, Montana, Nebraska, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, South Dakota, Vermont and West Virginia—plus the District of Columbia, capped annual interest at 36% in 2022.[3]
Text of measure
Full text
The full text of the ballot initiative is below:[1]
Sponsors
Michiganders for Fair Lending led the campaign in support of the initiative.[1]
Path to the ballot
Process in Michigan
In Michigan, the number of signatures required to qualify an indirect initiated state statute for the ballot is equal to 8 percent of votes cast for governor in the last gubernatorial election. Signatures older than 180 days are invalid, which means all signatures must be collected within a 180-day window. Petitions for initiated statutes must be filed 160 days prior to the election. Successful initiative petitions are sent to the legislature, which then has 40 days to pass the proposed law. If the legislature does not approve the initiative, it goes on the ballot. If the legislature approves the initiative, it becomes law without needing the signature of the governor.
The requirements to get an initiated state statute certified for the 2022 ballot:
- Signatures: 340,047 valid signatures were required.
- Deadline: The deadline to submit signatures was June 1, 2022.
Signature petitions are filed with the secretary of state and verified by the board of state canvassers using a random sample method of verification.
Stages of this initiative
- The ballot initiative was filed with the Department of State on November 29, 2021.[1]
- Michiganders for Fair Lending filed a second version of the initiative on January 18, 2022.[4]
- On June 1, 2022, the Michiganders for Fair Lending campaign submitted 405,265 signatures to the Secretary of State.[5]
- On July 19, 2022, the Bureau of Elections reported that the initiative did not have enough valid signatures to qualify for the ballot.[6]
- On July 21, 2022, the Michigan Board of State Canvassers voted 4-0 to accept the Bureau of Elections’ recommendation that Michiganders for Fair Lending does not qualify for the ballot. The Bureau's sample review found that 274,668 signatures were found valid out of the 405,265 submitted.[7]
See also
Footnotes
- ↑ 1.0 1.1 1.2 1.3 Michigan Board of State Canvassers, "Michiganders for Fair Lending," accessed December 5, 2021
- ↑ Consumer Financial Protection Bureau, "What are the costs and fees for a payday loan?," accessed Sep 27, 2022
- ↑ Center for Responsible Lending, "Map of U.S. Payday Interest Rates," accessed June 9, 2022
- ↑ Michigan Secretary of State, "Michiganders for Fair Lending Petition Summary Announcement," January 18, 2022
- ↑ MLive, "Just 1 Michigan ballot issue of 10 submitted before deadline," June 3, 2022
- ↑ MLive, "Payday loan reform should not qualify for Michigan ballot, state review finds," July 19, 2022
- ↑ MLive, "Payday loan initiative will not make Michigan ballot, canvassers rule," July 21, 2022
