City business doesn’t include payday loan regulation
By Bill Dennis | 3rd July 2008
I loathe payday loan joints.
The people who own them are the scum of the Earth. They prey on those in need. And I am sick of looking at them.
I am sick of seeing them pop up, like malignant warts, all over Peoria, especially in the older sections of town, populated often where the most financially vulnerable live.
And now, the Peoria City Council has considered a 180-day moratorium on any new establishments of this sort. The details, from the Peoria City Hall:
“Payday loan establishments, also known as Title Loan establishments, have proliferated within Peoria as may be seen by the attached map. Concentration of these businesses in the area appears to have an adverse effect on the neighborhoods where they are established. In order to pursue reasonable regulation of available for payday loan stores or establishments and/or title loan stores or establishments, it is recommended that the Council adopt a moratorium on granting zoning certificates for new establishments while the City reconsiders reasonable regulations.”
The memorandum goes on to state that the “impact if denied” would be that “these establishments could continue to proliferate” and that the financial impact would be “minimal.” Really? Minimal? Tell me, then, about the minimal financial impact on the city if the city goes to court to defend itself, once again, if we are sued by the owner of an otherwise legal establishment that has been denied equal protection under the law.
There might be one or two local judges willing to look the other way, but some judge somewhere — in the state or federal courts, who is going to rule that that cities have no right to regulate financial institutions.
But please don’t think I am defending these places, or they way of doing business.
I did some original reporting on the issue several years ago for The Community Word. And there was some moderate reforms passed a year or two ago, yet the growth of these sorts of businesses continues.
Should these sorts of establishments be legal? Probably not, considering they are essentially loaning money at rates far exceeding what a bank, savings and loan or credit union could offer. And the fact that they pray on people of limited income is particularly repulsive to me.
But does a city have the right to ban a legal business that follows all the rules that are in place?
I think not. I applaud those who are trying to affect some change. But the fact that proximity to a payday loan joint might affect property values isn’t enough of a reason.
Regulating financial institutions isn’t a legitimate function of city government. Peoria needs to concentrate its limited resources to things that are essential city services.
This is was the Payday Loan Reform Act was supposed to do. According to a press release from Gov. Rod Blagojevich’s office, the act:
Limits the interest that can be charged for each loan to $15.50 per $100
Sets a cap on total loan amounts to $1,000 or 25% of a customer’s monthly salary, whichever is less
Prevents borrowers from having more than two loans at a time
Provides that payday borrowers cannot have payday loans for more than 45 days. Once they have reached the 45-day limit they must have at least a seven-day loan free period
Creates a new 56-day repayment period with no additional interest charges for borrowers who have trouble repaying their loans
Protects borrowers from facing criminal prosecution for unpaid loans, and from paying attorneys fees and court costs
Extends special protections to members of the military, including a ban on garnishing wages, deferral of collections for deployed personnel, and a prohibition on contacting a borrower’s commanding officer.
But some bad practices are still allowed, apparently. Some of these businesses operate by having their customers back-date checks, which the lenders will attempt to deposit if the customer doesn’t come in and pay on time. This makes the customer responsible for triple the amount of check, but not less than $100 nor more than $500 plus attorney’s fees and court costs. These penalties don’t seem out of line with what other states are doing.
And if you don’t pay? A loan shark might send a guy named Vinnie out to break your legs. But a payday loan joint can arrange for two deputies to haul your ass off to jail. It is disturbing to me that law enforcement officers are ultimately the ones who enforce this legalized loan sharking.
This is a problem than can only be fixed by state and federal legislators. Where is State rep. Aaron Schock on this issue? Where is State Rep. David Leitch? State Sen. Dave Koehler? These are the people who are responsible for fixing this problem, not the 11 people sitting around the horseshoe.
Peorians might be ready to hop on board in the future
Some news came out last month about Peoria’s bus system. The good news is that ridership is up 20 percent for the Greater Peoria Mass Transit District. The bad news is that fuel prices are up 65 percent. Fares will not increase in the 2009 budget.
I don’t know how long THAT will continue, or even if it should. Consider this: With ridership up, that means there are more people willing to ride the bus. So why not make riding the bus more of an option by creating “community circulators.” It’s an idea worth considering.
I was chatting with Dave Powers, a neighbor, the other day. I mentioned that bus ridership was up, because of high gas prices and probably a little bit because of environmental concerns. I said that I don’t ride the bus to work because the closest I could get to my place of employment is about four blocks away, and four blocks would have to be walked in the road because of a lack of sidewalks on Altorfer Road and a section of North University north of Pioneer Parkway.
He mentioned community circulators, which are used in his native city of Cleveland.
What is a circulator? Think of it this way: Peoria’s mass transit consists of a dozen or so bus lines that travel from one end of the city to another.
This works great for commuters who:
1. Happen to live and work along a single bus line.
2. Are willing to take one bus to one of a small handful of points where all buses converge, such as the downtown transfer station or Northwoods Mall, and then transfer from one bus to another. This doubles the length of a commute to work.
3. Are willing to walk many blocks to get on the bus at an approved bus stop, and possible another walk from the bus stop to your place of work. This includes during inclement weather.
I fit none of these categories. And because I can afford to do so (barely) I ride my car. Alone. Likewise, I take my car to a grocery store across town. There are two grocery stores that could be considered in my neighborhood. I don’t walk to these stores, because the distance is too far for me to walk carrying groceries. I am also not going to wait for a bus that’s going to drive by just ONE of these stores and then wait another half hour for the bus going the other way, especially considering there’s another walk to the bus stop on West Main.
Here’s what a circulator bus does: It cruises one specific neighborhood, giving residents a way to shop, socialize and commute within their own neighborhood far more efficiently that they would be able to do using a bus line that spends very little time in any one neighborhood.
Imagine how many people might want to live in one of Peoria’s older neighborhoods if they could catch a bus that passes right in front of their home, or maybe a block or two away, and take them to their place of employment, say Bradley University or one of the two hospitals. Someone living near the intersection of Armstrong and Ellis, for example, would have to drive to work because taking a bus would be too inefficient, require him or her to wait too long in the rain, take too long. etc. They might as well live in Woodford County, since they would be driving to work anyway.
But if there was a community circulator that’s going down, say Columbia Terrace or Armstrong at least every half an hour, and the bus circulates through the BU campus, they could take the neighborhood’s circulator bus.
In my own case, if there was a circulator making the rounds in the industrial park area where I work, I might be more willing to take the bus to and from work, especially if the University line could drop me off at a location where the circulator stopped to pick up passengers.
To work, I think these theoretical circulators would have to weave their way through neighborhoods, but make stops at all the major retail areas/major employers within a neighborhood. Each circuit would have to be completed within a half hour or less. To assist commuters in transferring from one line to another, each circulator would have to make stops at points that are also stops for major bus lines. The more such stops the better.
Anyway, it’s just an idea I think ought to be considered NOW, while the public is getting used to the idea that gas prices aren’t going to drop and will probably continue to rise.
Roy Modglin passes
Retired Fire Chief Roy Modglin, 61, died Sunday, June 8, at his home in Mapleton.
Right before his retirement, I asked him if he had any plans for public service — in other words, elected office —after his retirement. He just smiled and said he wanted to spend time on his boat. I am very sorry that he didn’t more time to do just that. But I cannot be said that he didn’t have a full and useful life.
I’ll remember Roy as a friendly guy who almost always had a smile on his face. He was a straight shooter when others were not.
But most importantly, it must be noted that Roy made it his life’s work to put his life in danger to protect the lives and property of his neighbors. Think about it for a moment: The man ran into burning buildings, which is something I doubt 99 percent of us could do. I know I could not. He was one of those unassuming guys in uniform who earned a paycheck being Superman — but without the benefit of invulnerability. My sympathies go to his family, friends and the entire Peoria Fire Department, heroes all.
Billy Dennis operates The Blog Peoria Network, a community citizen journalism/blog site that gives ordinary citizens the power to report on their communities to an audience of fellow Peorians. For more information, and to access member sites, visit http://blogpeoria.com.