Money being taken from your account right now? You can stop it, and you don't have to clear the loan first. Read this first →

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Payday loans in South Dakota

Capped at 36% APR by ballot initiative in 2016. Charging more is a criminal offence, and the loan itself is void.

Initiated Measure 21, approved 8 November 2016

South Dakota capped rates at 36% and made exceeding it a crime.

Measure 21 caps what licensed money lenders may charge at 36% APR including total interest, fees and charges. Charging above it is a Class 1 misdemeanour, and a loan made in breach of the cap is void.South Dakota · Ballot measureInitiated Measure 21 — money lenders may not charge more than 36 percent; charging above the limit is a Class 1 misdemeanor and loans made without adhering to the cap are voided

It passed with roughly 76% of the vote. Banks and credit unions are not covered.

Amends South Dakota Codified Laws ch. 54-4

The industry ran a competing measure, and voters saw through it

On the same ballot sat Amendment U, backed by a payday lender, which presented itself as a rate limit but set an 18% ceiling only in certain circumstances while restricting the state’s ability to set rates generally.

Voters approved Measure 21 and rejected Amendment U by 63% to 37%. A payday lender also sued the Attorney General over the wording of the ballot explanation for Measure 21; the South Dakota Supreme Court upheld the explanation.

Worth remembering when reading any rate-cap proposal: check who is funding it.

Rate cap
36% APR, including total interest, fees and charges.
Exceeding it
A Class 1 misdemeanour.
Loans above the cap
Void.
Who is covered
Licensed money lenders. Banks and credit unions are exempt.
Passed by
Roughly 76% of voters, 8 November 2016.
Regulator
South Dakota Division of Banking
Statute
SDCL ch. 54-4, as amended by Initiated Measure 21

If money is being taken from your account

You can revoke authorisation and instruct your bank to stop the payment, whatever your agreement says.

What Regulation E says about automatic payments →

Every figure carries the jurisdiction and the exact provision it came from. Click to open the source.

Debt-collection law in South Dakota

A payday loan is a consumer debt. If it goes unpaid, two South Dakota rules decide what a lender can do next: how long it has to sue you, and how much of your pay a court can order taken.

Statute of limitations
6 years to sue on a written contractSouth Dakota · StatuteS.D. Codified Laws § 15-2-13(1) — written-contract statute of limitations 6 years. Same 6-year period for written and oral contracts.. compare all states →
Wage garnishment
20% (less $25/week per dependent)South Dakota · StatuteSDCL § 21-18-51 — 20% (less $25/week per dependent). 20% cap below the federal 25%; extra $25/week reduction per dependent.. compare all states →

Being sued over an old payday loan? A collector can still file, but the time limit is a defence you can raise — and you cannot be jailed for the debt. What can and cannot happen if you don’t pay →

Sources. Ballotpedia and South Dakota Secretary of State records of Initiated Measure 21 (2016). South Dakota Codified Laws ch. 54-4. South Dakota Supreme Court ruling on the ballot explanation.
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