The city of Parma, Ohio has moved to restrict the opening of new payday lending stores according to this article.    Here’s the meat of the piece:

       The law allows one store for each 10,000 residents. There are seven stores now in the city. With an 80,000-plus population, one more lender could open.

It’s astonishing to the Payday Pundit that city councils believe they have the expertise to know exactly how many payday loan stores a city should have.   And wouldn’t more stores, not less, drive competition and keep costs low? 

Funny blurb from the local Alexandria, Virginia newspaper:

“All lenders don’t treat everybody the same,” said former City Councilman Lonnie Rich, representing LoanMax before the elected officials. “Everybody can’t walk down to Burke and Herbert to get a loan.” 

They put restrictions on check cashing and payday loan stores.  Here’s the update in the Dayton Daily News. 

Another city council in Ohio is considering a “moratorium” on payday lending.  According to this article, the city of Xenia would halt licenses for check cashers and payday lending stories for a year.   Darryl Dever, a lobbyist for the state association, defends the industry:

    “They are reacting to the emotional side of sensational claims people throw out there,” Dever said. “People make a conscious decision to use this product.”

The Parma city council put restrictions on the number of “check cashing” stores in the city.   Currently, there are seven check cashing and payday lending stores in Parma.  The limit now is nine.

The Payday Pundit has a simple point to make:  It’s a $300 loan!

That’s right, the average payday loan is $300.   To paraphrase Churchill, never in the course of human history has so many made so much fuss over so little.    

The Alexandria, VA city council wants to impose a steep new tax on payday lenders according to this Washington Post article.   Advance America, the nation’s largest payday lending company is threatening to sue the city if it takes this step.  From the article:

Under the Alexandria proposal, payday and car-title lenders would face a business license tax of 58 cents for each $100 in gross receipts, up from 35 cents for each $100 of gross receipts, which is the general rate for financial services firms. The tax would generate an estimated $13,000 annually, which the city wants to devote to consumer financial education.

“I think it is a good symbolic gesture,” said Alexandria council member Rob Krupicka (D), but he said he is worried about the potential cost of litigation by payday lenders. “I don’t want to go down the path where we are paying more in legal fees than we are generating in revenue,” he said.

Show-Me Daily offers their take on Tuesday’s disappointing vote in Kansas City.  Unfortunately, when legislation like this is passed, it’s not just businesses that suffer.  Consumers end up feeling the squeeze. 

Last fall the Kansas City City Council passed new zoning regulations and additional restrictions on payday lenders, but the Council does not have the staff to oversee the new regulations, so they are now asking voters to approve a $1,000 annual fee per payday lending business in order to pay for 2-3 staff to oversee the new regulations. 

So, under the guise of “protecting consumers”, the Council passes more regulations, then wants to charge an extra $1000 per year per payday lender, a fee which will likely be passed on to their customers.  

Who exactly is being “protected?”

*Yossarian

A payday lender from El Dorado, KS, Mike Strong, engaged is some fairly vigorous debate with anti-payday loan activists.  Mike deserves lots of kudos for walking into the lion’s den and putting up a fight.  There are a lot of Mike Strongs in the industry, but we can always use more.