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A proposed ballot measure in Missouri that attempts to limit costs for borrowers using payday loans, as well as other small loans, are being legally challenged by critics.
The measure’s opponents filed a lawsuit against the proposal in the Missouri Capitol’s home of Cole County. The lawsuit is challenging the cost estimates and summary that would appear on the voters’ ballot next year.
The proposed measure is seeking to limit the interest, fees and other charges for payday, car title and installment loans at only 36 percent. Payday lending critics have declared that the annual interest rates for these types of loans can exceed 400 percent.
Ballot measure supporters, on the other had, revealed that they are planning to start gathering signatures this week for the proposed measure to be on the 2012 ballot. In order for the measure to qualify for the ballot, its supporters must be able to gather signatures of registered voters equal to at least 5 percent of the votes cast from six of the nine congressional districts in Missouri during the governor’s election in 2008.
The lawsuit that was filed by the measure’s opponents argues that the ballot summary is insufficient and unreasonable. This is because the measure does not mention that the costs of a wide variety of loans would only be up to 36 percent and that the limitation would broadly apply to consumer and small-term loans. The measure’s critics also argue that the ballot summary incorrectly implies that the state does not have limits on the interest charged for loans.