LINCOLN — Nebraskans voted overwhelmingly for a ballot measure capping payday loans at a 36% annual interest rate.
The outcome for Initiative 428 never appeared in doubt. With the new law, Nebraska will join 16 other states that have similar limits on payday lending costs or prohibit the practice altogether.
A coalition of groups called Nebraskans for Responsible Lending collected more than 120,000 petition signatures to get the measure on the ballot. The effort began after advocates struck out with legislative attempts to limit the costs of payday loans.
Such loans, also known as cash advances, check advances or delayed deposit loans, are a type of short-term, high-cost borrowing that people use to get small amounts of immediate cash. Last year in Nebraska, fees charged by payday lenders equaled an average of 387% annual interest.
Advocates had argued that the current rates are exorbitant and prey on poor people. Industry representatives said the limits could kill their businesses and harm people who can’t get credit elsewhere.
Supporters said Tuesday that Nebraska voters took matters into their own hands and made it clear they want to end predatory rates.
“Now all Nebraskans will have better access to credit that is fair and reasonable,” said Kate Wolfe, campaign manager for the petition.
Kent Rogert, a lobbyist for the Nebraska Financial Services Association, said he had no immediate comment on the election outcome. However, he said the industry group will consider its legal options this week, meaning the measure may not be out of the woods.
People tied to the quick-cash industry filed three legal challenges before the measure made the ballot. All failed.
Voters also passed:
Slavery. Nebraskans voted to remove the last vestige of slavery from the state constitution by approving Amendment 1, which strikes language that has allowed slavery or involuntary servitude as punishment for a crime. The constitution bars other forms of slavery or involuntary servitude.
State Sen. Justin Wayne of Omaha, in introducing the measure, said the exception allowed a practice known as convict leasing, in which prisoners were leased out to provide labor. The practice ended in 1940 but the language remained.
Tax-increment financing. Voters also approved Amendment 2, which will allow enhanced tax benefits for developments in “extremely blighted” areas. The proposal will allow municipalities to offer up to 20 years of tax-increment financing, instead of 15 years, in areas with high unemployment and high poverty rates.
With tax-increment financing, cities put the additional property taxes generated by a development project into paying project-related costs, such as sidewalks and sewers. Wayne introduced the proposal to help North Omaha and other struggling areas.