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Payday lending measure will be on November ballot after courts reject remaining challenges

Payday lending measure will be on November ballot after courts reject remaining challenges

LINCOLN — Opponents of a measure seeking to cap loan rates for payday lenders have struck out in court, meaning the proposal will stay on the Nov. 3 ballot.

The Nebraska Supreme Court on Thursday ruled against Trina Thomas, the owner of Paycheck Advance, who had objected to using the term “payday lender” in describing the measure on the ballot. The court said the term is known by the public and commonly used, even in the industry.

A day earlier, Lancaster County District Judge Robert Otte dismissed a legal challenge brought by Brian Chaney of Omaha. That decision followed the dismissal of a separate case brought by Paul Bencker Sr. of Omaha. Both men have ties to the quick-cash industry.

Aubrey Mancuso of Nebraskans for Responsible Lending described the legal challenges as “a desperate tactic” to block the measure.

“The payday loan industry doesn’t believe they can win in the court of public opinion so they’ve filed these Hail Mary lawsuits to try to stop voters from having their say,” she said.

Chaney’s challenge sought to have the measure removed from the Nov. 3 ballot for lack of signatures. He offered affidavits from 188 people who said they wanted to withdraw their signatures from the petition to put the measure on the ballot. If they were removed, the petition no longer would meet the requirement to have signatures from 5% of registered voters in each of 38 counties.

Otte ruled that, under state law, the withdrawals should have been filed before the petitions are submitted for signature verification. He also questioned the credibility of the affidavits, which were identical and were signed five to eight months after people signed the petition.

Bencker’s case claimed that the ballot measure contains more than one subject, in violation of the Nebraska Constitution, and that it would put payday lenders in violation of state usury laws.

The court rejected both arguments, ruling that the various parts of the ballot measure all related to the same general subject. The order said that the issue regarding usury laws could not be addressed before the election.

Secretary of State Bob Evnen announced last month that the proposal had enough signatures to go before voters in the general election. Supporters collected well over the 85,628 valid signatures needed to qualify.

The measure would cap payday loans at a 36% annual interest rate. 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.

The lenders typically charge a 15% fee, rather than traditional interest, for a short time period.

For example, a customer could write a $100 check dated two weeks into the future, and the lender would give that person $85 cash.

Photos: Our best staff images of September 2020

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Martha Stoddard keeps legislators honest from The World-Herald's Lincoln bureau, where she covers news from the State Capitol. Follow her on Twitter @StoddardOWH. Phone: 402-670-2402

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