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Contact: Karen Klugh

American Financial Services Association Welcomes Missouri Ballot Determination

Initiative to Limit Lending Falls Short of Necessary Signatures
Washington, August 8, 2012 … Missouri Secretary of State Robin Carnahan’s determination
that a ballot petition related to payday, title, installment, and consumer credit loans failed to collect enough signatures to be on the November ballot is a victory for consumers. The American Financial Services Association (AFSA) has long considered the initiative to be too broad and likely to negatively impact traditional installment loans alongside its payday target, leaving moderate- to low-income families without access to small-dollar credit.
Last week, the Missouri Supreme Court overturned a Cole County Circuit Court ruling that had struck down the ballot petition as misleading to signers (Francis, et al. v. Carnahan, et al., SC92571). The Cole County decision had found that that the petition language misled signers by disregarding the initiative’s damaging effect on traditional installment lending, a form of credit that radically differs from payday lending.
While the initiative primarily targeted payday lenders, traditional installment lenders have been caught in the crossfire. Traditional installment loans differ substantially from payday or title loans because they are structured to be repaid in regular installments – equal payments made up of both principal and interest that systematically reduce a borrower’s total debt over the term of the loan. Traditional installment loans also differ from payday loans in that they report to credit bureaus, giving borrowers the opportunity to build or rehabilitate their credit score.
“Today’s decision is welcome news for the hundreds of thousands of Missourians that rely upon installment loans to make car repairs, replace broken appliances or cope with other unexpected expenses. This overbroad ballot initiative would have stripped moderate- to low-income Missouri families of safe and legal small-loan options,” said Chris Stinebert, AFSA President and CEO. “We will continue to work with our local colleagues to educate Missourians about the value of installment lending and urge consumers to resist any future attempts that might inadvertently limit access to installment loans.”
Based in Washington, D.C., AFSA (www.afsaonline.org) is the national trade association for the consumer credit industry, protecting access to credit and consumer choice. Its 350 members include consumer and commercial finance companies, auto finance/leasing companies, mortgage lenders, credit card issuers, industrial banks and industry suppliers.
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Adobe Acrobat File American Financial Services Association Welcomes Missouri Ballot Determination
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