Missouri election results: Springfield voters approve fee on payday lenders

A key part of the Springfield City Council's rules designed to crack down on payday and car title lenders will soon be law. 

More than 56 percent of voters on Tuesday backed a proposal to impose a $5,000 annual fee on short-term lenders, or a $2,500 fee if they register halfway through the year. 

The measure is intended to make sure lenders comply with city rules, and the money will be used to provide alternatives to short-term lenders, help people get out of debt and educate the community about the reality of taking out a payday or car title loan. 

Advocates say while the vote was a victory, the fee and local regulations are just the first steps in regulating "predatory" lending. Only the state can cap the borrowing interest rates, which sit at an average of 450 percent statewide. 

"We are incredibly happy that voters in the city limits see that it's important to continue this first step toward reform," said Susan Schmalzbauer, an organizer with Faith Voices of Southwest Missouri. "But really, it's a message to Jefferson City that we need a rate cap because we know that is the best reform." 

St. Louis, Kansas City and Liberty, Missouri, also have similar regulations in place to require disclosures and registration from lending institutions. 

It took Springfield more than two years to pass its own rules. 

Some council members initially opposed the regulations, saying they didn't think local rules and fees could do much to curb the problems that lead people to seek a payday loan or the interest rates that trap people in a cycle of debt. 

But after a task force studied and backed local regulations, as well as measures to cap interest rates at the state level, council unanimously approved it. 

"The only real solution is probably the interest rate legislation at the state level," Mayor Ken McClure said at a May council meeting. "I join my colleagues in urging the General Assembly to take appropriate action on that."

Katie Kull covers local government for the News-Leader. Got a story to tell? Give her a call at 417-408-1025 or email her at kkull@news-leader.com. You can also support local journalism at News-Leader.com/subscribe.