Payday loans and auto title loans continue to attract the consumers who can least afford to use them – the unbanked (have no bank account) or underbanked (have bank account and use alternative financial services); public assistance beneficiaries and Social Security or SSI recipients 1,2. Only military personnel and their families are exempt from the high interest rates and fees, and are charged 36% annual percentage rate (APR) on small predatory loans. Currently, payday lending is prohibited or nearly extinguished in thirteen states, and allowed in three states with APR’s of 36% or less, and 30 states and D.C. prohibit or extinguished auto title lending through low APR caps. South Dakota allows payday loan and auto title lenders to charge up to and beyond a 500% APR. Older South Dakotans want to see their state cap payday and auto title loans too – at 36%.
Learn: More from AARP Research
Key findings include the following:
- Nearly 2 in 3 South Dakotans strongly agree that the state should change the current law around payday and auto lender loans to stop allowing 500% or more APR’s.
- Agreement is high across party lines.
AARP engaged Alan Newman Research to conduct this survey among South Dakotans ages 50 and older about legislative issues in the state. 904 interviews were completed via landline and cell phone. A statewide base of 703 interviews was conducted with a boost of 201 interviews in Sioux Falls. Percentages may exceed 100% due to rounding. Data are weighted by age and sex according to 2013 Census estimates from American Community Survey (ACS). South Dakota and Sioux Falls data were weighted separately to accurately reflect geographical distribution of age and sex according to Census estimates. For more information contact Jennifer Sauer at JSauer@aarp.org.