In a legislative session that isn’t being remembered for compromise, hard-fought legislation regulating payday lending in Minnesota takes effect Aug. 1 that is an exception to the polarization at the Capitol.
The state House and Senate unanimously passed and Gov. Tim Pawlenty signed a bill in May that payday lenders and consumer advocates, who spent weeks on opposite sides, are calling a compromise.
“We certainly moved the ball down the field but didn’t get the touchdown,” said Ron Elwood, a lawyer for St. Paul-based Legal Services Advocacy project, which argues that payday loans amount to predatory lending practices.
To continue the sports metaphor, the 2009 compromise on payday lending was a blocked shot for Brad Rixmann, CEO of Payday America.
Rixmann, of Prior Lake, a familiar television pitchman and frequent GOP campaign contributor, said in an interview that he began the session fighting legislation that would force him out of business. The effect of the early proposals, Rixmann said, would have cut off a financial resource for people who need a quick source of money, often in an emergency. Payday America, which he runs along with Pawn America, is the largest provider of payday loans in Minnesota and operates 17 stores.
“There were several bills that had been introduced. Most of the bills did one or both of the following: restrict customer ability to borrow money when they need it or reduce fees to a point where our business would not be sustainable,” Rixmann said.