Neon signs illuminate a payday loan business in Phoenix on Tuesday, April 6, 2010. (AP Photo/Ross D. Franklin)

Update: An earlier version of this post misspelled Jamie Fulmer’s last name.

Steve Hildebrand is one of the Democratic Party’s best organizers. He’s worked in senior positions for former Vice President Al Gore, then-Senate Majority Leader Tom Daschle (D) and President Obama’s 2008 campaign.

Steve Hickey is one of the most conservative members of the South Dakota legislature. He’s a pastor from Sioux Falls who has earned news coverage for his deeply socially conservative views on same-sex marriage and religion’s place in daily life.

On the face of it, they don’t have much in common. But they both think payday lenders that charge high interest rates for short-term loans do more harm than good, and now they’re teaming up to try to bring down the industry.

Hickey and Hildebrand will spearhead a ballot initiative to cap interest rates for those short-term loans at 36 percent, just a fraction of the industry average. They acknowledge — and payday lenders warn — that such a cap would, in effect, end the payday lending industry in South Dakota.

“We have an intentionally crafted defective financial product intended to be a debt trap that’s marketed to the financially unsophisticated and the desperate,” Hickey said in an interview. “I see what this industry has done to the poor and the elderly.”

Critics of the payday lending industry say the high interest rates trap borrowers into a cycle of reliance on short-term loans. A study published this year [pdf] by the Consumer Financial Protection Bureau found more than 80 percent of payday loans are rolled over or followed by another loan within two weeks. More than 80 percent of those loans are in amounts that are the same size or larger than the initial loan.

“We’ve got people working two and three jobs. It’s a low wage state. And it’s a heyday for people who want to make money on that,” Hickey said. “These predatory lenders are bilking billions of dollars out of poor neighborhoods and then leaving it to the taxpayers to clean up the mess.”

But the industry says it provides a needed service for people who need to cover unforeseen expenses. South Dakota state law requires borrowers to be employed for at least a month before they take out a loan, a regulation they say prevents abuse of the system.

“Overwhelmingly, the customers who take out loans from our company do so responsibly and to their satisfaction,” Jamie Fulmer, an executive at payday lender Advance America, told the Sioux Falls Argus Leader. “While consumer advocacy folks have a negative opinion of the products and services we offer, the actual customer doesn’t.”

Fuller said the end of the payday industry would hurt vendors whose customers would be unable to pay for goods and services, and landlords whose tenants can’t afford rent.

Hickey has tried to curtail the payday lending industry before. He dropped a previous effort to cap interest rates when payday lending companies said they would work on a reform package with him. Those companies later turned on the bill, and Hickey decided to try a rate hike again.

Hickey and Hildebrand’s coalition will try to collect about 25,000 signatures — about twice as many as are required by South Dakota law to qualify an initiative for the 2016 ballot.