The Nebraska secretary of state said an effort to put a ballot initiative capping payday loan interest rates at 36% before voters gained more than 9,000 additional signatures than was needed under state law.
The petition drive organized by Nebraskans for Responsible Lending submitted 120,000 names to Secretary of State Bob Evnen in late June.
Of those, 94,468 signatures were verified by county election officials — 110% of the number needed — including 5% of registered voters in 46 of Nebraska's 93 counties, leading Evnen to certify the measure for the Nov. 3 ballot.
But a lawsuit filed Monday in Lancaster County District Court alleges the number of registered voters who have withdrawn their signatures means the petition drive no longer has 5% of support in the requisite number of counties.
In the complaint against the initiative's sponsors, as well as Nebraska's top election official, Omaha resident Brian Chaney said circulators had failed to read the object of the petition drive to voters before they signed the petition.
Those voters, at least 188, later filed sworn and notarized affidavits withdrawing their signatures from the petition.
Included in removing their signatures from the petition were six signers in Loup County, eight in Grant County, 16 in Rock County, 13 in Wheeler County, 16 in Hooker County, 15 in Keya Paha County, 26 in Stanton County, 23 in Garfield County, 31 in Burt County and 34 in Butler County.
"If these withdrawals are given effect, the petition no longer has signatures from 5% of the registered voters in 38 counties," the complaint states, which would mean the petition drive no longer meets the requirements outlined in state law.
In the original petition, 6.18% of Loup County's 502 registered voters — a total of 31 people — signed the petition. After six people withdrew their signatures, support for the measure dropped to 4.98%, a spreadsheet included with the lawsuit states.
Likewise, in Butler County, the most populous county identified in the complaint, circulators originally gained 304 signatures, or 5.51% of the 5,514 registered voters. Removing 34 Butler County signatures from the petition sunk that figure to 4.9%, according to Chaney's lawsuit.
Because circulators did not read the object of the petition to each signer before they signed their name, those signatures "were obtained through legally insufficient means" and should be removed from the petition, the complaint states.
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Omaha attorney Scott Lautenbaugh, a former state senator who is representing Chaney, said an organization opposed to the ballot initiative discovered "an alarming number" of voters said they were not aware of the petition drive's goal, and if they had been, they would not have signed.
Lautenbaugh said even sampling a small number of counties demonstrated "widespread fraud" in how the signatures were gathered.
"We think the proposal is misguided, and it shouldn't be able to find its way to the ballot when signers are misled and circulators did not follow state law," Lautenbaugh said.
Nebraskans for Responsible Lending, which conducted the petition drive, dismissed the lawsuit as "just the latest in a long string of meritless attempts by the payday lending industry to undermine the wishes of the vast majority of voters" opposed to the current interest rate cap of 400%.
"We are confident that our signatures were gathered properly and in exact compliance with the law," said the organization, which includes religious leaders, military veterans, former borrowers and community groups. "We are confident that our signatures were gathered properly and in exact compliance with the law."
Chaney asked a Lincoln judge for an expedited hearing on his complaint.
The Nebraska Attorney General's Office will defend the secretary of state in the case.
An earlier challenge to the ballot initiative to cap payday loan rates will go before the Nebraska Supreme Court on Friday for oral arguments.
In late July, Trina Thomas, the owner of Paycheck Advance, said the ballot title and explanatory statement written by the Nebraska Attorney General's Office is "insufficient and unfair."
J.L. Spray and Stephen Mossman, Lincoln attorneys representing Thomas, say the state should not have used the slang term to title the initiative on the ballot, calling it "deceptive to the voters as it unfairly casts the measure in a light that would prejudice the vote in favor of the initiative."