JEFFERSON CITY — Two Missouri groups announced Monday that they were dropping their legal challenge to a ruling that they didn't have enough signatures to get initiatives tightening regulations on payday loans and raising the minimum wage on the November ballot.
Secretary of State Robin Carnahan last month told Missourians for Responsible Lending and Give Missourians a Raise they had not collected enough signatures for the issues to be placed on the ballot. The groups argued that a significant number of signatures were improperly invalidated and filed a lawsuit challenging her ruling.
The Kansas City Star reported that both groups concluded that legal hurdles erected by "the payday lending industry, their allies and their lawyers" were too high to get past before the Sept. 21 deadline to finalize the November ballot.
"We are sad to report that the payday industry and minimum wage opponents' unprecedented legal challenges effectively disenfranchised thousands of Missourians," the Rev. Martin Rafanan, one of the campaign's leaders, told The Kansas City Star. "It is another example of big monied corporate interests displacing the people's interests in the democratic process."
The groups still believe they have enough signatures for the initiatives to go to voters, he said.
Over the past year, a Kansas City-based nonprofit group founded by communications consultant Patrick Tuohey pumped $2.3 million into a political committee opposed to the payday loan measure. Legal challenges, which tied the initiatives up in courts for the past year, were funded with that money.
Also, Overland Park, Kan.-based QC Holdings Inc., a payday lender that operates primarily as Quik Cash, reported to the U.S. Securities and Exchange Commission earlier this year that it had spent "substantial amounts opposing the efforts to place this initiative on the ballot."
Tuohey's organization isn't required to disclose its donors because it is a nonprofit.
Supporters of both initiatives spent a combined $600,000 on the campaign, according to disclosure reports filed with the Missouri Ethics Commission.
Payday loans are typically between $100 and $500, and customers repay them when they receive their paycheck. The average interest rate for a payday loan in Missouri is 445 percent annually.
The payday lending initiative would have capped the interest rates and fees for the short-term loans at 36 percent.
The Rev. James Bryan, treasurer or Missourians for Responsible Lending, said supporters of the ballot measures faced harassment, dishonest ad campaigns, fake petitions in the field and an "interminable legal process."
"Since beginning this campaign more than a year ago, we have faced an opposition unrestrained by money, morality, truth or concern for the economic dignity of our neighbors and family members," Bryan said.
State Rep. Mary Still, D-Columbia, has been a leading proponent of restrictions on the payday lending industry. A candidate for the 19th District state Senate seat, she lamented the fact that voters won't get to weigh in during the general election.
"I share the disappointment of hundreds of thousands (of) Missourians, including ministers and lay leaders from 500 congregations statewide, who have joined together in pursuit of economic justice for the citizens of Missouri," Still said in a news release. "... The payday loan industry is a desperate industry, and they know that Missouri is their last stronghold."
The minimum wage initiative would have raised the state's rate from $7.25 an hour to $8.25, starting in 2013, with an annual cost-of-living adjustment in subsequent years.