The South Dakota Division of Banking is investigating whether Dollar Loan Center's new one-week loans violate state law.

Dawn Dovre, a spokeswoman for the division, on Monday said the agency is probing the new loans offered in Sioux Falls and Rapid City.

South Dakota voters approved a ballot measure in November capping annual interest rates at 36 percent. Payday lenders previously charged as much 400 percent, and most shuttered their stores following the change, citing inoperable conditions.

In January, Dollar Loan Center closed its 10 stores in South Dakota, but the chain quietly reopened two of its stores last week. The company began offering one-week loans between $250 and $1,000 at annual interest rates below the 36 percent cap.

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Borrowers don't need to put up collateral, such as an auto title, but they do need to disclose their income, address and, in some cases, credit rating. Those who don't repay the loans within seven days face additional fees.

"Our new loan product conforms specifically to the new laws that were voted into place by Measure 21," Dollar Loan Center CEO Chuck Brennan said in a statement Monday.

Industry opponents said the lender used a legal "loophole" to continue profiting on desperate South Dakotans. They said fees for those who couldn't pay back the loans in seven days would face similar rates to those charged prior to the implementation of the 36-percent cap.

"This action by Dollar Loan Center appears to us as an attempt to evade the spirit, if not the letter, of the law supported by 76% of South Dakota voters," said Reynold Nesiba, a state senator and spokesman for South Dakotans for Responsible Lending. "In any case, this new loan product is dangerously designed for default."

Follow Dana Ferguson on Twitter @bydanaferguson, call 605-370-2493 or email dferguson@argusleader.com

►Watch: Stu Whitney interviews Dollar Loan Center CEO Chuck Brennan (January 2017)