Should Cities Limit New Payday Lending Companies

Source: The Times-News, Twin Falls, IdahoDec.迷你倉樂器 19--BURLEY, Idaho -- Latino community representatives urged Burley and Rupert officials Tuesday to follow the city of Caldwell's lead and enact a law limiting where new payday loan companies can open, saying the "predatory lending" businesses target low-income and Latino families.The Caldwell City Council passed an ordinance Monday to prohibit new payday loan businesses in commercial areas, relegating them to manufacturing and light industrial zones. If new payday lenders want to open elsewhere in Caldwell, they must apply for a special-use permit, reports the Idaho Press-Tribune.The Burley City Council should do likewise, Krista Bustamante urged during the council's Tuesday meeting."We really need the local cities and counties to send a message to our legislators that this is something that is affecting our cities and our communities," said Bustamante, of the Idaho Community Action Network."This is an economic justice issue. This is a racial justice issue," she said.Payday lenders in Idaho charge an average of 350 percent and up to 500 percent interest on their short-term loans, Bustamante said.State Sen. Lee Heider, R-Twin Falls, introduced legislation in 2012 to cap the interest on those loans, but the bill failed to make it out of the House."Most people in Idaho are against payday lending, but there are people who use it," Heider said. "That means there is a need there, and it helps some people, but many more people are injured by it. I really want to help people not get caught up in this cycle."Here's how that cycle works, according to the Center for Responsible Lending:A low-income person who needs a quick loan to pay the rent, for example, will be required 迷你倉西貢o repay the loan within as little as two weeks, at 400 percent annual interest. But only 2 percent of such borrowers are non-repeaters. On average, these borrowers take out nine payday loans, and the "churning" of their loans every two weeks accounts for three-fourths of all payday loan volume, resulting in $3.5 billion in fees each year.Low-income people are particularly susceptible to financial illiteracy, living without sufficient emergency funds and making only partial credit-card payments, says "The Color of Money," a 2012 survey by the Financial Industry Regulatory Authority.Four storefronts in Burley and North Burley prominently advertise payday loans, and another offers short-term "signature loans." Other companies do business via the Internet.Internet payday lenders in Idaho must register with the state Department of Finance under legislation passed this year, Heider said.He said he'll introduce legislation in the next session to cap payday lending interest rates at 36 percent."It was mentioned to me that no one is putting a gun to their heads to take out these loans, and that's true," Bustamante told the Burley City Council. "But when you have to choose between paying your light and your gas bill, it's as if a gun were pointed toward your head. This is happening in our low-income communities."Rebeca Arteaga told the Rupert City Council on Tuesday, "A lot of the people who are taking out these loans are desperate, and they don't realize what they are getting into." She said she didn't know of any payday lenders now operating in Rupert.Copyright: ___ (c)2013 The Times-News (Twin Falls, Idaho) Visit The Times-News (Twin Falls, Idaho) at magicvalley.com Distributed by MCT Information Services迷你倉將軍澳