The moratorium, or ban on use permits for establishing new payday lender facilities in Pacifica, will be in effect for 45 days and can be extended to 22 months and 15 days with another city council four-fifths vote. 

The Pacifica City Council will hear the public’s opinion on a temporary moratorium on new payday lenders in Pacifica tonight. 

The possibility of a ban is partially the result of a study by the Insight Center for Community Economic Development in which it was found that Pacifica has the highest per capita rate of payday lenders in San Mateo County, and one of the highest in the San Francisco Bay Area.

If you work in the industry and are in the area, now is the time to step up and make your voice heard.

Gutierrez started Progreso Financiero — whose name translates to Progress Financial — as a “social entrepreneuring” research project six years ago while earning an MBA at Stanford University.

The proposition: If poor people from Bangladesh to Bolivia can be good credit risks, as a global boom in so-called microlending has proved, why not the millions of immigrants working in the United States?

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Progreso’s typical 26% interest rate, plus its $50 origination fee for loans, works out to an average annual percentage rate of 36%. That’s twice the average APR for bank credit cards. But it’s well below interest rates that can top 450% at some payday lenders or pawn shops, often the only options for low-income borrowers.

It depends on the size and length of the average loan, doesn’t it?

For the Record

Payday loans: An article in the Sept. 15 Business section about the financing that payday lenders receive from major banks said people who take out payday loans generally don’t have bank accounts. In fact, payday lenders require borrowers to have a bank or credit union checking account.

People who pay high fees to borrow from so-called payday lenders generally don’t have bank accounts, but that doesn’t mean banks aren’t making money from them.

Of course, 100 percent of payday loan customers have bank accounts.   The Los Angeles Times has never written a payday lending story that hasn’t been rife with inaccuracies.

The lenders, notorious for high fees and interest rates, have been pressing vulnerable customers to help them kill the proposed Consumer Financial Protection Agency.

How many loaded words can one reporter put in one sentence?  I count three:  “notorious,” “pressing” and “vulnerable.”     Objectivity is out the window with most reporters these days.

Under a new proposal, state Assemblywoman Nancy Skinner (D-Berkeley) wants to cap the interest rate on payday loans covered by unemployment checks to 36 percent.

Federal law already caps the interest rate for the military at 36 percent. This proposal is a state version aimed at extending it to California’s unemployed.

The industry points out the cap forced stores to cut back payday loans to military personnel because the rate didn’t cover their cost, and it warns the same could happen to the unemployed.

“What, in effect, you will do is limit the choices available for short-term credit in the marketplace for these consumers,” said Greg Larsen, a spokesman for the California Financial Service Providers Association.