Payday lending reform initiative short on signatures, likely won't be on November ballot

Beth LeBlanc
The Detroit News

Lansing — A ballot committee seeking to curb Michigan laws regarding short-term lending hit a roadblock Friday as the Bureau of Elections recommended the initiative be denied placement on the November ballot because of insufficient signatures. 

The Bureau of Elections' Friday report estimated Michiganders for Fair Lending was about 72,513 signatures short of the 340,047 valid signatures needed to earn a spot on the November  ballot. 

Michiganders for Fair Lending on Tuesday said it was disappointed it fell short of the requirement and noted it was "a tough year for all petition drives in Michigan." Spokesman Josh Hovey said the group took issue with some of the signatures disqualified from its total, but didn't believe it would be able to rehabilitate enough signatures to win certification.

But Hovey noted the drive allowed the group to gather stakeholders and supporters dedicated to payday lending reform and committed to finding a solution.

"Moving forward, we will be urging our stakeholders to hold local candidates accountable by urging them to support payday loan reform as part of their campaign platforms," Hovey said in a statement. "We will also be working as a coalition to push forward reform in the Legislature to ensure predatory lenders stop taking advantage of hardworking Michiganders."

The lending proposal was the only one of 10 petition initiatives seeking to change state law that actually submitted its signatures on time last month to the Secretary of State's office. Others fell short of their signature goals or continued collecting in the hopes that the GOP-led Legislature would adopt their changes. 

The proposal would have drastically cut the rates that payday lenders can charge customers for short-term loans, a topic that has been the subject of debate in Lansing for some time. 

Under the proposal, the service fees that lenders charge would be capped at an annual percentage rate of 36%, down from a reported current rate of about 370% APR among some Michigan lenders. 

Supporters of the proposal argued the state's current loose laws around payday lending trap vulnerable individuals in a cycle of debt, but opponents have said the small loans are a valuable resource in a financial emergency.

The Bureau of Elections' conclusion was based on a sample of 522 signatures from the total 392,009 submitted by the committee. Of those 522, 122 were found to be invalid because the signee wasn't registered to vote, had an incorrect or absent address or provided a signature that didn't match state records, was incomplete or wasn't provided at all. 

About 25 of the remaining 400 signatures were successfully challenged by opposition group Safe Lending Michigan because of various defects, including 13 instances of a signee signing multiple times, according to the Friday report.  

"This included one person who signed twice on the same sampled page and one person who signed once on a sampled page but an additional four times on pages elsewhere in the universe," the report said. 

The bureau's formula for extrapolating the validity of the sample to the total signatures recommends certification if more than 474 signatures are found to be valid, recommends further sampling if between 456 and 473 signatures are found to be valid, and recommends denial if fewer than 455 signatures are found to be valid.