Wednesday, October 3, 2007

In the 10 years since payday loans were legalized in California, at least 81 payday lenders have opened in Sacramento. Some city officials say that’s more than enough.

A committee of city council members voted unanimously Tuesday to recommend that the full council adopt an emergency ordinance placing a moratorium on new check cashing centers.

The 45-day moratorium would give city staff time to work on permanent zoning restrictions for new faxless payday advance lenders to prevent multiple businesses in the same neighborhood.

“They’re everywhere,” said City Councilwoman Sandy Sheedy, who proposed the moratorium. “How many do we need?”

Consumer groups say borrowers pay up to 456 percent APR for a two-week payday loan, and that payday lenders target low income communities.

Charisse Lebron, a consumer advocate who testified before the city council’s Law and Legislation Committee, said fast payday loans lead borrowers into a “quagmire” of debt because they often can’t repay the entire loan with their next paycheck.

The owner of a Broadway clothing store adjacent to a payday loan center said he worries about the people he sees going in and out of the business, but had reservations about the moratorium.

“It’s America,” said Eric Murrell. “It’s capitalism.”

This entry was posted on Wednesday, October 3rd, 2007 at 3:12 pm and is filed under California.