(From Gov. Jay Nixon)
Gov. Jay Nixon today vetoed two consumer-lending bills, saying that one bill does not provide true reform to payday lending and the other bill takes away the authority of local government to protect consumers.
In vetoing Senate Bill 694, the Governor said the bill “provides false hope of true payday lending reform while in reality falling far short of the mark.” Instead of true reform, Senate Bill 694 “appears to be part of a coordinated effort by the payday loan industry to avoid more meaningful reform.” The Governor pointed out that under the bill payday lenders could still charge 912.5 percent for a 14-day loan, and that borrowers could still be offered multiple loans by multiple lenders at the same time or be encouraged to take out back-to-back loans from the same lender.
“Payday lending often perpetuates an endless cycle of debt for consumers who can least afford it, and this bill fails to protect Missourians from being caught in this downward spiral,” Gov. Nixon said. “Missourians want meaningful payday lending reform, not a sham effort at reform that allows such predatory practices to continue. I encourage the General Assembly to approach this problem again next year, and present me with a bill that delivers true reform.”
The Governor’s veto message on Senate Bill 694 can be found here.
Similarly, the Governor has vetoed Senate Bill 866, which would create a new term (“traditional installment lender”) to describe a consumer lender not licensed as a bank or credit union lender. Gov. Nixon said the bill would restrict the authority of local governments over short-term lenders, eroding local control in areas such as zoning and permitting with respect to such entities. Such an erosion of local control is unacceptable, the Governor said. The Governor’s veto message on Senate Bill 866 can be found here.
It's not the government's business to monitor people's individual spending habits. It's a free society, we are all grown ups and we alone are responsible to manage our finances. Since these lenders don't check your income or credit rating in making the loan, it's even more important that the borrower makes absolutely sure they can pay it back. These proposals suggests that we're not capable of doing our own due diligence, and that we need the government holding our hands.
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