Initiated Measure 21
In November 2016, South Dakota voters approved Initiated Measure 21 by a 76% margin, capping the total cost of payday, title, and other short-term consumer loans at 36% APR — including every fee, not just stated interest. It's one of the most decisive citizen-led votes against high-cost lending anywhere in the country.
What Changed for Lenders
Because the 36% cap covers all-in costs rather than just interest, it made the traditional payday loan business model unworkable in the state. Reporting on the measure's aftermath found roughly 121 payday and title lenders left South Dakota in 2017 alone, either closing outright or converting to different, compliant loan products.
What's Still Allowed
Loans under $500 are permitted with up to four rollovers, but everything — principal, interest, and fees — has to fit inside the 36% APR ceiling over the life of the loan. Lenders who exceed the cap are committing a Class 1 misdemeanor under state law, so any offer priced above 36% APR to a South Dakota resident is operating outside the measure voters approved.
| Factor | South Dakota Rule |
|---|---|
| All-in rate cap | 36% APR (Initiated Measure 21, 2016) |
| Loan limit | $500 |
| Rollovers | Up to 4 permitted |
| Violation | Class 1 misdemeanor |
Because the 36% cap pushed most traditional payday lenders out of South Dakota, comparing licensed installment and personal-loan offers priced within that ceiling is the practical path for most borrowers here.
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