One of the organizations campaigning for last week’s ballot Initiative 164 limiting payday loan rates to an annual 36 percent, Cap the Rate, took Veterans Day as an opportunity to remind people of the changes that were approved by 72 percent of voters last week.

    In rememberance of military members, and the protections they have had from lenders since 2006, the group issued a press release reminding supporters how important the new law is, citing “the cap for military families as evidence that a rate cap addresses the problem of predatory lending while opening the market for alternative products to take the place of triple-digit payday and car title loans.”

Virginia Zumbrun at Havre’s Title Cash, sees the issue differently.

“I just don’t think a lot of people understood what they were voting on,” Zumbrun said. “A whole industry is out of business. That’s a lot of people in the unemployment lines.”

According to Zumbrun, with the new rate limits, Title Cash will have to close since the company wouldn’t even be able to pay for the paper it uses. She said that closing the store at the end of the year is going to be difficult, because “after seven years, these people are more than customers.”

Zumbrun has had people call her, asking what they are supposed to do during financial crunch times, and she doesn’t know what to tell them.

Matt Leow, campaign field director for the initiative, on the other hand, has plenty to tell them.

“There’s been a lot of talk about consumers not having anywhere to go,” Leow said. “They said the same when the military cap passed. But that’s just not the truth. There’s going to be an openness in the market now.”

Leow said that banks and credit unions across the state are now starting new short-term loan programs.

A statement from the Montana Credit Unions for Community Development sent out by the Cap the Rate campaigners said that the number of short-term loans through credit unions has already gone up 25 percent in the past quarter, before the ban takes effect.

Leow said that even these lenders could still operate, they would just have to change their business model, from doing fewer high-interest loans to doing more low-interest loans, like the banks or credit unions.

“What they are saying is that they just don’t want to change,” Leow said. “All they want to do is charge 300, 400, 500 percent interest.”

Now that the change has been made, Leow said, he will be working with the attorney general’s office to make sure it is implemented properly. He will also be working on educating consumer’s about the alternatives and helping people who are in over their heads in debt with credit management classes.What’s next for payday loans