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

Honorable Sam w. Mitchell
Secretary of State
Helena, Montana
Transmitted herewith is Senate Bill
No. 81, entitled:
AN Act to define and regulate the
business of lending in amounts of
Three Hundred Dollars ($30000) or
less; to authorize the licensing of
persons engaged in such business; to
permit such licensees to make charges
at a greater rate than lenders not Ii
censed hereunder; to prescribe maxi
mum rates of charge which licensees
are permitted to make; to regulate
assignments of wages or salaries,
earned or to be earned, when given as
security for loan of or as considera-
ton for a payment of Three Hundred
Dollars ($30000) or less; to provide
for the administration and enforce
ment of this Act by the State Exam
iner as Ex-officio Superintendent of
Banks; to provide for the issuance of
regulations and orders therefore; to
authorize the making of examinations
of reports thereof; to provide for a
review of administrative acts here
under; to provide that State Examiner
may employ a deputy and other en-
ployees necessary for administration
of this Act; to provide disposition of
license and investigation fees; to pre-
scribe penalties; and to repeal all
Acts or parts of Acts whether general,
special, or local, which relate to the
same subject matter as this Act, so
far as they are inconsistent with the
provisions of this Act"
without my approval and with objec-
lions thereto
This measure provides for the regu- |
lation of the business of lending in |
amounts of 100000 or less at the in |
terest rate of 3 per cent per month.
The interest rate provided is exor-
bitant and cannot be justified.
Small loans are being solicited by
every bank in the state at the legal
rate of interest fixed by statute, name
ly, 10 per cent per annum.
Most banks loan these small sums
without security or endorsers, and
those that are secured, the borrower
pledges the same kind of security he
would under Senate Bill No. 81; that
is cars, household furniture, insurance
policies, and etc.
From a rather exhaustive investiga-
finr r,aono hxr, I pnnUinand thaf
in those states having laws similar
to Senate Bill No. 81, borrowers of
sums ranging from $500 to $4,000 are
not being adequately served. This
has had a tendency to build up boot
logging of small loans with interest
rates far in excess of per cent per
month.
There is great need in this state for
small loans of from $500 to $4,000, but ,
[ am convinced the borrower of such
small amounts would not be adequate
Iy served should this bill become a ,
law.
Under Senate Bill No. 81, the small ,
loan agencies now operating in the r
state would be forced out of business, !,
and the field left open to large con- :
Germs, whose principal interest would +
De the loaning of sums from $4,000 !,
70 $4,000 at 8 per cent per month :
! most lucrative business = but the !,
small borrower would find few lenders h
% serve his needs
If the small loan business is to
)e regulated, adequate provisions =
must be made for examination and
lose supervision. Otherwise, a con- a
lition might develop which would de- y
eat the provisions Of the law
The fees authorized under this bill !,
would not provide sufficient funds to :,
examine and supervise those n
'perating under it, thus tending to- ?
yard infraction and confusion. II
For these reasons, l must withhold .
ny approval of the bill. n
SAM C. FORD, Governor II
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MAI NCIc OE GOVERNOR EORD,S ID