A Georgia auto title lender has contributed nearly $240,000 in additional funds to two South Dakota political organizations waging campaigns over a pair of short-term lending ballot measures, according to campaign finance records released Friday.  

Alpharetta-based Select Management Resources LLC is the organizations' sole reported financier in filings covering January through May 23. The company has spent a total of $2.4 million on efforts to block an interest rate cap on payday lenders. The company reportedly is the only source bankrolling South Dakotans for Fair Lending (SDFL), a committee pushing to approve a constitutional amendment allowing payday lenders to bypass an annual interest rate cap if a client agreed. 

The company in 2015 contributed $1.7 million to SDFL and $455,000 to Give Us Credit South Dakota, which was formed to oppose a ballot measure that would cap annual interest rates for payday lenders at 36% without exception.Short-term lending opponents have put forward a ballot measure to cap yearly interest rates, while the company is funding a constitutional amendment that would impose no limit on interest rates if a borrower agrees to a rate in writing.

The convoluted campaign means South Dakota residents likely will face a confusing scenario at the polls in November: a ballot with two proposals about payday loan interest rates that could have divergent consequences for borrowers and businesses across the state.

Payday lending in South Dakota is currently unregulated, leading to annual interest rates of up to 574%, among the highest in the nation according to a 2014 study by the Pew Charitable Trusts. Most payday lenders do not recover payments on time and high interest rates add up fast. The controversy led to the formation of SDFL, which circulated a competing ballot initiative capping interest rates at 18%, unless the borrower agreed to a higher rate in writing.

Payday lenders argue that capping payday loan interest rates will put them out of business. They argue, for example, that a $500 loan paid off in two weeks would earn just $6.90 at a 36% interest rate, which is not enough to cover the risk of the loan.

Select Management operates car title lending locations in South Dakota under the name North American Title Loans. 


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