Saturday, July 12, 2014

Payday lending, a city can only regulate the location, Daly City

The Daily Journal (San Mateo), Michelle Durand, 7/12/14. "Daly City tries once more to regulate payday lending."

Can't regulate my meal
Can regulate my location
Three years after its last try fizzled, Daly City is renewing the fight to regulate where payday lending business can locate in the city as a way of preventing an overconcentration of them particularly in lower income areas. 

The previous effort, though, targeted not just the locations but the actual loan products. Canepa had proposed allowing short-term loans up to $500 with a maximum APR of 18 percent for residents and give users the ability to build credit by paying off loans over a period of up to a year. Canepa also wanted a cap of three loans per person per year and a financial education requirement for borrowers.
State law and court challenges preempts the city from targeting the actual loans which is why this second attempt is focused on the providers.

If the Daly City Council moves ahead, it joins Redwood City in regulating where the industry can set up shop. That city bans check cashing businesses downtown and some zoning districts and requires a use permit in others. Pacifica enacted a two-year moratorium on them which it has voted to extend. The city of San Mateo has recently begun exploring the possibility of regulations, too.   Read more.

Note photographs:  Great white shark (right) from,  turning shark (left) from, Sharks Research Institute.

Posted by Kathy Meeh


Anonymous said...

Interesting article. I stopped by the payday lender at the top of Manor, out of curiosity, (not to cash a check)....he's next to the Rice and Roll restaurant and laundromat, he said he does great business, even though he's in the middle of nowhere.

Anonymous said...

Cash call Rates:

Loan Product Loan Fee MAX APR Number of Payments Payment Amount
$25,000 $75 35.87 % 120 months $767.44
$10,000 $75 99.75 % 84 months $826.06
$5,075 $75 116.73 % 84 months $486.58
$2,600 $75 139.13 % 47 months $294.46

Anonymous said...

You can educate the borrowers all you want, there is always a demand for these types of loans. I think there's been one in Linda Mar Shopping Center for a few years. Tougher caps on rates and fees would
protect the desperate and/or foolish from these leeches.

Anonymous said...

Lost lives to bankers - who prey on those who have so very little. Getting that last bottom dollar from those least able to afford it.

Anonymous said...

Those don't include the pay-back rate. Not something most unsophisticated, resource-poor, education-poor borrowers understand. These institutions help keep those who can least afford it in permanent debt.