Initiative to cap interest rates for payday loans submits signatures for Michigan ballot

On June 1, the campaign Michiganders for Fair Lending submitted signatures for a ballot initiative that would appear on the November ballot.

The initiative would put an annual interest cap of 36% in place for payday loans. Michiganders for Fair Lending argues that the typical payday loan carries a 370% annual rate, and that high interest rates can be financially harmful to Michiganders. According to the Center of Responsible Lending, 18 states, plus the District of Columbia, cap annual interest at 36%.

“Payday lenders have been using the lure of quick cash to prey upon vulnerable Michiganders for too long,” said campaign spokesperson Josh Hovey, “These extreme interest rate loans are designed to trap people in an endless cycle of debt, and we’re giving voters a chance this fall to fix this problem.”

Out of the 10 initiative campaigns in Michigan, the Michiganders for Fair Lending campaign was the only one to make the June 1 signature submission deadline.

The campaign stated that out of the 575,000 signatures they collected during the petitioning process, they submitted 405,265 signatures. In Michigan, 340,047 signatures are required in 2022 to qualify an indirect initiated state statute for the ballot. This number is determined by calculating 8% of the votes cast for governor in the last gubernatorial election.

The measure is an indirect initiated state statute. Out of the 21 states that allow initiated state statutes, nine states, including Michigan, use an indirect process for citizen-initiated statutes. In Michigan, citizen-initiated statutes that receive enough valid signatures are sent to the Legislature, which then has 40 days to pass the initiative into law. The governor cannot veto indirect initiatives that legislators approve. If the legislature does not approve the initiative, then it appears on the next general election ballot.

The nine other initiative campaigns that did not submit signatures on time may appear on the ballot in the next election cycle.

Currently, there is one other measure on the Michigan ballot—a constitutional amendment referred by the legislature, which would change term limits for state legislators. 

Since 1996, 26 citizen-initiated measures have gone to Michigan voters for approval. Out of the 26, 8 (31%) were approved, and 18 (69%) were defeated.

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