State Sen. Steve Hickey proposes regulation for short term loans - KSFY News - Sioux Falls, SD News, Weather, Sports

State Sen. Steve Hickey proposes regulation for short term loans

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One state lawmaker proposes new regulations which could affect your ability to get some quick cash when you need it.

KSFY News spoke with some lenders who want to take a wait and see approach before commenting on the pending legislation.

But one short term lender who grew up in Sioux Falls had a lot to say about how this could affect his business.

Promises of easy money are everywhere on the streets of Sioux Falls. And state representative Steve Hickey wants to change that.

"It's the wild west, other states have a lot more parameters and regulation and right now we have people with 400, 600, 800, 900 percent interest. They borrow $200 and owe $2,000  in a short amount of time," Hickey said.

Sometimes people just need a little extra cash to make ends meet.

And Dollar Loan Center CEO Chuck Brennan said comparing an annual interest rate to his type of loans is like comparing apples to oranges.

"These are very short term loans. For example, if somebody needed $200 for a week, it's going to cost them about $14 dollars. That's far less than any bad check fee or any late on the rent fee or any fee of any sort," Brennan said.

Hickey plans to introduce a bill during the 2014 legislative session to regulate short term loans.

"We're going to try to bring some regulation to a really unregulated industry, which is a move in the right direction, which is short of a rate cap which would kick them out of the state which was my initial approach," Hickey said.

But if Hickey's bill passes with an interest rate restriction, Brennan believes it could bring an end to a quick line of cash.

"The entire industry shuts down. We would close our doors immediately that day. Five hundred people would be out of work, and everybody, all of our tens of thousands of customers wouldn't have a place to turn when they needed cash," Brennan said.

Brennan said he offers a service to people who need quick cash but can't get the same type of loan from a bank.

KSFY News will follow up with Hickey to find out what new regulations he proposes for short term lenders in our state.

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