The doors at B&R Check Holders at the high-traffic intersection of Brooks and Russell have been locked since July 26. The large sign that once enticed passing cars with offers of instant money for the weekend or help with holiday shopping doesn't give an explanation for the closing. Two smaller signs taped to the payday loan office—"Your home for fast cash"—refer customers to a 1-800 number for existing loans, and apologize for any inconvenience. Long story short: Daddy ain't getting a new pair of shoes thanks to B&R—or, for that matter, getting a 300 percent annual interest rate on a short-term loan.
It's surely just coincidence that B&R closed its Missoula location—as well as storefronts in Great Falls, Billings and Butte—just one week after Secretary of State Linda McCulloch announced I-164, an initiative that caps the rates of payday lenders, garnered enough signatures to make the November ballot. If the initiative passes, businesses like B&R will no longer be allowed to charge upwards of 400 percent. I-164 calls for the industry to limit its interest rates to 36 percent.
Repeated requests for comment from Eric Graning, owner of the Denver-based B&R Check Holders, went unreturned. But Graning, who still owns 19 B&R locations in Wyoming, Colorado, Idaho and California, has been outspoken on the issue of payday legislation. In a "message to the people in Colorado" on the company website, he decried the state's efforts to similarly cap interest rates at 36 percent.
"I have listened to the arguments against our industry for years, but I feel people are misled and misunderstand our industry," he writes. "Please consider this: B&R Check Holders charges a $30 fee for a $300 cash advance for 2 weeks. This is a FEE for providing a valuable and popular service. It is nothing more than that."
Graning compares B&R's "fees" to charges for withdrawing cash at an ATM, and says if the Colorado legislation passes it will put thousands of people out of work. His argument apparently prevailed: Colorado Gov. Bill Ritter recently signed a compromised bill that, based on the legislature's fear of job losses in the payday loan industry, caps interest rates at 45 percent and allows plenty of leeway for businesses to charge additional fees. The law goes into effect Aug. 11.
The Montana ballot initiative offers less wiggle room for compromise. It either passes with the 36 percent cap or it doesn't. B&R's recent move would appear to show how some believe the electorate will vote.