The people's voice. [volume] (Helena, Mont.) 1939-1969, 1947-03-28

to the Governor. 1t reveals the same
by the loan sharks.
1t says 'the interest rate provided
is exorbitant and cannot he justified. "
1t does not say that the loan sharks
in open hearing admitted charging
more than the usury law allows 1t
does not say that affidavits obtained
borrowers showed that they were pay
ing 240 to 600 percent per annum to
the loan sharks. 1t does not say that
many states including: those around
ington have the same rate in their
small loan act and that reports from
the banking departments of those
states show that the net profit of lend
ers in those states varies from 5 to
z per cent per annum-a fair return
in keeping with those of other indus
tries.
1t says Small loans are being So
licited by every bank in the state at
the legal rate of interest fixed by
That is true, but the fact that there
are at least AZ high rate sharks in
the state prove that the banks with
their low rate cannot serve that type
of person intended to be protected by
this law. In 1941 Duke university
stated that the loan sharks had ST.
100000 outstanding in loans. 1t must
be much higher now.
AS regards security, this law did
not provide for loans on insurance
policies because this is not the risk
type business which justifies the rate.
The rate is made possible because of
the greater risk taken and because it
costs more to handle small unit loans.
the banks do not make per-
sonal loans secured by household fur
liture as they do not consider it ade-
luate. security at their rate.
1t says further 81 am convinced that
n those states having laws similar
% SD 81, borrowers of sums ranging
rom SIS to $50 are not being ade-
luately served" The facts are that
lnder this law there is an all around
oan service, and in Washington in
945 500 of the loans made were I'M
Ter 500. 1t does not say that loan
harks specialize in making small I'M
loans at high rate with
he purpose of keeping the borrower
in debt. Go to any loan
bark office in Montana and see if
ou can get loan for more than $50
egardless of the necessity and worth
ghileness of the purpose.
The next statement that "thiS has |
tendency to build up bootlegging of
mall loans with interest rates far in
xcess of go per month" is really a
oker because this is exactly what the
1an sharks are doing now, and the
experience with this law in 81 other
tates shows that it eliminates the
)an sharks.
1t further says under SD 81, the
mall loan agencies not operating in
ne state would be forced out of bust
ess."
This is definitely not the case be-
ause Senator Haight contacted vari-
us state banking departments and
eceived the information that the To-
al operator survived under this law.
his information was given to the
overnor. The loan shark who doesn't
ant to give up his racket in milking
le public made the same cry. The
an who wants to lend money under
lis law, and who wants TO conduct (
is business honestly and efficiently
as no trouble staying in business.
1t also says eff the small loan bust
ess is to be regulated, adequate pro-
sions must be made for examination {
Id close supervision" This bill was
'iginally recommended by the Rus l
III Sage Foundation after years of {
udy of the loan shark problem. 1t l
based on the 18th draft of the orig s
al bill and has been revised and i'm 1
owed on the basis of experience in
states. 1t is self sustaining, and t
q fees authorized would be put in /
special fund for it's administration
ne fees suffice in other states. Is
that our banking department is not
efficient? Did Superintendent of Z
,plr prOuy, iDo1Iiro oyd oot s