By Hugh Espey, executive manager of Iowa CCI Action Fund

The other day, Iowa City joined up with Des Moines, western Diverses Moines, Clive and Ames by becoming the city that is fifth their state of Iowa to split straight straight down on predatory lending and restrict where cash advance shops should locate inside town limitations.

The zoning that is local – first proposed in each city by Iowa CCI members – limit brand brand new construction to certain commercial areas and establish separation distances between payday loan providers and apartment structures, churches, houses, areas, and schools.

Payday advances are short-term usury loans with a yearly rate of interest near 400 %.

They trap huge number of borrowers in a period of misery and debt. In addition they strip our communities of hard-earned wealth – $36 million every year – which should be circulating in regional economies, but rather pads the pouches of big out-of-state corporations.

Cities across Iowa are performing whatever they can to break straight down on predatory payday loan providers, now it is time when it comes to continuing state legislature to adhere to suit by capping rates of interest on pay day loans at 36 per cent. A lot of other states have inked it.

Regrettably, legislation doing properly that’s been stonewalled by some Senate that is powerful Democrats.

Throughout the 2011 legislative session, Senate File 388 passed away from Senator Amanda Ragan’s (D-Mason City) Human Resources Committee, but ended up being relocated by Senate Majority Leader Mike Gronstal (D-Council Bluffs) to the Commerce Committee, in place of into the Senate flooring for a vote. That committee has become chaired by Senator Matt McCoy (D-Des Moines), whom sat from the bill through the 2012 legislative session, effortlessly killing it.

Assuming Democrats retain control over the Iowa Senate this Fall, the 2013 session that is legislative be the opportunity for legislators like McCoy and Gronstal to place communities before corporations and individuals before profits – by passing a good price limit bill that cracks straight down on predatory payday loan providers. It’s the right thing to do, also it makes lots of feeling.

Payday Lending: a continuing business Model that Encourages Chronic Borrowing

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