South Dakota Voters Approve of Cap on Payday Loan Interest Rates

As the entire media landscape is covering Donald Trump’s improbable victory on Election Day and the Republicans control of both the House and Senate, other results from Tuesday’s general election are beginning to finally make their way through the news cycle.

In South Dakota, voters approved a measure to cap interest rates on payday loans.

The results show that 75 percent of voters supported Measure 21, which allows the state government to cap interest rates on short-term, high-interest online loans and car title loans at 36 percent.

Meanwhile, Amendment U, which is a competing measure that would amend the state constitution and permit payday lenders to charge any interest rate they want to borrowers, lost with 60 percent voting against it.

South Dakota, which is a Republican state, seemed to overwhelmingly favor caps on rates.

On the same ballot, South Dakotans voted in favor of adding crime victims’ rights provisions into the state constitution. But state voters didn’t give the thumbs up to dropping party labels from the ballot. They also rejected two other important initiatives: lowering the minimum wage for teenagers to $7.50 per hour and unions being allowed to charge non-union workers fees.

When it comes to the GOP politicians, Trump, Senator John Thune and Congresswoman Kristi Noem were victorious on Election Day.

Since the economic collapse, jurisdictions across the United States have attempted to implement legislation that would place a limit on interest rates charged for payday loans. Other public officials have attempted to take the issue to the ballot box.

A 2014 Pew Charitable Trusts study discovered that the average annual percentage rate charged for a payday loan in The Mount Rushmore State was a whopping 574 percent. Although it hasn’t been confirmed, a quick Google search will show that there are dozens of payday loan businesses that claim to have the best rates and cheap interest scattered across South Dakota.

Soon after the Pew report was released, critics immediately responded. One of these included Republican State Representative Steve Hickey, who argued for imposing more regulation on the payday loan industry. He has gone far as suggesting that it’s time to prohibit payday lending completely in the state.

“They can tell us all that this is just about helping people, but it’s an intentionally crafted defective financial product that is marketed to the financially unsophisticated,” said Hickey, a Sioux Falls Republican. “They’re bilking billions of dollars out of poor neighborhoods, and the taxpayers get to clean up the mess. I want to get them out of the middle, and let society help these people in other ways.”

Despite his opposition to homosexuality and same-sex marriage, Hickey has received support from fellow Democrats when it comes to the issue of payday loans.

With the Consumer Financial Protection Bureau (CFPB) on the cusp of passing a federal regulatory framework for the national payday loan industry, states’ initiatives will be able to complement the new rules and regulations. That is if U.S. President Barack Obama signs the proposal before he leaves the White House.

Air France-KLM Plans New Budget Airline to Rival Gulf Carriers

Franco-Dutch airline company Air France-KLM has revealed plan to launch a new distinct airline that will operate long- and medium-haul international fights in a bid to wrestle customers from fast-rising airlines from the Middle East.

The new airline, which has yet to be named, will be used by Air France-KLM to provide business and economy travel on some new and reopened routes, the carrier said. It would operate international routes where its parent company has found it hard to operate for years due to profitability concerns arising from intense competition and low fares.

“It will be focused on ultra-competitive markets and will enable (Air France-KLM) to go on the offensive by opening new routes, re-opening routes closed due to their lack of profitability and maintaining route under threat,” the biggest European airline group said in a statement.

Discount airlines have started to grow their presence in Europe with low rates that put pressure on continental aviation powerhouses. Competition from Emirates Airline, Etihad Airways and Qatar Airways – three Gulf carriers – has especially been increasingly intense. These non-European airlines, along with Turkish Airline, have been using their geographically helpful hubs to full advantage on routes that connect Asia to Europe and North America.

Air France-KLM’s chief executive officer Jean-Marc Janaillac said the growing influence of the Gulf carriers was not acceptable in the European airline group’s bid to maintain leadership position in its markets.

“This new company will constitute the Group’s response to the Gulf State airlines which are developing at low production costs on key markets where Air France-KLM is pursuing its growth ambition,” the leading European airline holding company said.

The proposed airline is part of Air France-KLM’s nine-point plan christened “Trust Together” aimed at improving the company’s competitiveness. The plan also aspires at improving efficiency of plane use and greater cooperation with American partner Delta Air Lines.

The airline company will be providing fewer frills on the new airline, compared to its standard service, to enable it compete favorably against Middle East rivals. Pilots and cabin crew will be engaged on different terms to those of the main company.

Air France-KLM has, however, attempted to dismiss any thought that the proposed unit will be a full-blown discount one. It said business travelers and tourists will enjoy standards comparable to what it has been known for in terms of crew professionalism and product quality.

The initiative is seen as an attempt by new boss Janaillac to improve on years of job losses and conflicts with trade unions.

However, the Syndicat National du Personnel Navigant Commercial (SNPNC) cabin crew union has said the new airline would be “low cost” for its members. It is afraid that its staff would not enjoy similar work benefits as that of the main company.

This is not the first time Air France-KLM will attempt to create a reduced-cost unit. Previous attempts had been foiled by its workers’ unions.

One of the ways the company hopes to avoid confrontation with unions this time is to allow pilots move on their own volition to the new airline while continuing to enjoy previous pay.

The planned carrier is expected to have up to 10 planes by 2020.