Law limiting payday lenders fails in panel

PIERRE (AP) � A South Dakota House committee has rejected an effort to cap the interest rates charged by so-called payday lenders.

Republican Rep. Steve Hickey of Sioux Falls had sponsored two bills targeting payday loans, which consist of small amounts payable at interest rates that can exceed 300 percent, and title loans made with a person's car as collateral.

Hickey's proposals would have raised the licensing fee on payday and title lenders from $1,000 to $5,000. He also wanted to cap the interest they could charge at 36 percent.

But lawmakers on the panel said they believed many people who use payday lenders have no alternative.

Banking and trade groups opposed Hickey's legislation. They said the bills would put many lenders out of business.

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