SIOUX FALLS, S.D. — The passage of a ballot measure capping payday loan interest rates would destroy the industry in South Dakota, according to an executive at Advance America, a top lending chain in the state.

That’s how a recent rate cap initiative played out in neighboring Montana. State figures show regulated short-term lenders plummeted from over 100 to none within several years of its 2010 approval.

Lending companies argue that they provide consumers with important access to short-term credit, while South Dakota ballot measure supporters say people have options for help other than a snare engineered to profit off the poor.

Public records analyzed by The Associated Press show that short-term lenders hold at least 138 state licenses for operations located in South Dakota. That includes 31 in Sioux Falls, 28 in Rapid City, 14 in Watertown and 11 in Aberdeen.

The average annual percentage rate charged for a payday loan in South Dakota is 574 percent, according to a 2014 Pew Charitable Trusts report. The ballot question, Initiated Measure 21, would limit interest rates from businesses such as payday, auto title and installment lenders licensed in South Dakota to 36 percent annually.

The cap would cause “industry annihilation” because it would prevent lenders from earning enough to pay workers, rent storefronts and keep the lights on, said Jamie Fulmer, senior vice president of public affairs at Advance America, which has nearly a dozen locations in South Dakota.

The concerns of payday lending opponents largely aren’t shared by actual customers who use the company’s products and services, Fulmer contends.

That’s not the case with Sabrina Kastur, a part-time substitute teacher who took out a payday loan from Advance America to supplement the income from her Sioux Falls spa business after school let out for the summer.

The 57-year-old single mother ended up having to take on a third part-time job at a grocery store in part to help pay off the payday loan, which had a 223.7 percent annual interest rate. She said the lenders are taking advantage of desperate people and that she’s done with them.

While making a $150 payment late last month, Kastur said an employee mentioned a future loan. She responded, “‘No, honey. There won’t be a next time.'”

Payday loan stores don’t operate in the 15 states that ban payday lending or interest rates over 36 percent, according to Pew. People have reported cutting back on expenses, borrowing money from friends and family, and selling or pawning possessions, said Alex Horowitz, senior officer for Pew’s small-dollar loans project.

Horowitz said eliminating the loans is likely better for consumer welfare than the state’s current situation. Cathy Brechtelsbauer, coordinator of an anti-hunger group that is campaigning for the rate cap, said people could ask for help from their church, request an advance from their employer or tap a credit card.

“It’s worth it if some people have to struggle a little bit to find the money they need to spare the thousands and thousands that are suffering from these loans,” said Brechtelsbauer, of Sioux Falls.

A Georgia-based company appears to be singlehandedly waging the political campaign for the industry’s survival in South Dakota.

Alpharetta-based Select Management Resources LLC has sunk roughly $2.4 million into a pair of South Dakota political committees aimed at thwarting lending restrictions, according to state campaign finance filings.

The company has at least nine locations in South Dakota under the name North American Title Loans Inc., according to state records. Select Management Resources CEO Rod Aycox hasn’t returned 15 months of telephone messages from The Associated Press.

The company’s efforts also include funding a competing measure that would amend the state constitution to allow unlimited interest rates on loans. It would cap rates at 18 percent annually but allow higher ones if the borrower agrees in writing. The measure, named Constitutional Amendment U, is “deceptive,” Brechtelsbauer said.

The convoluted campaign means South Dakota residents will face a confusing scenario at the polls in November: a ballot with two proposals about payday loan interest rates that would have divergent consequences for borrowers and businesses across the state.

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