An Initiated Amendment to the South Dakota Constitution Limiting the Ability to Set Statutory Interest Rates for Loans
South Dakota Ballot Measure - Constitutional Amendment U
Election: Nov. 8, 2016 (General)
Outcome: Failed
Categories:
ConstitutionFinance and Banking
Summary
Under this constitutional amendment, there is no limit on the amount of interest a lender may charge for a loan of money if the interest rate is agreed to in writing by the borrower. If there is no written agreement, however, a lender may not charge more than 18% interest per year. A law setting an interest rate for loans is not valid unless the law gives the lender and borrower the ability to agree to a different rate. If an interest rate for loans is established by law, it must apply to every type of lender.
The amendment eliminates the ability to set statutory interest rates that are inconsistent with this amendment.
A vote Yes is for adding provisions to the Constitution that limit the ability to set statutory interest rates for loans.
A vote No will leave the Constitution as it is.
Measure Text
Section 1. That article VI of the Constitution of South Dakota be amended by adding new sections to read as follows:
29. No lender may charge interest for the loan or use of money in excess of eighteen per cent per annum unless the borrower agrees to another rate in writing. No law fixing an annual percentage rate of interest for the loan or use of money is valid unless the law provides borrowers the right to contract at interest rates as may be agreed to by the parties.
30. No law fixing a rate of interest or return for the loan or use of money, or fixing the service or any other charge that may be made or imposed for the loan or use of money, for any particular group or class engaged in lending money is valid. Any rate of interest or charge fixed by law shall apply generally and to all lenders without regard to the type or classification of the lenders business.
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