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PrintCOLUMBIA — On Monday, Columbia became one of the latest cities in Missouri to restrict companies that give payday loans.
Payday loans are small loans with high interest, taken out with the intention of paying them back quickly, usually within a month.
Supporters say these loans can help people in a time of need. For example, if a car breaks down between pay periods, a payday loan could go to fix the car.
But detractors — including Columbia state Rep. Mary Still — say the loan companies take advantage of poor people.
According to the most recent state Division of Finance report released in January about payday loans, the average loan in Missouri was $290.29, with an average interest rate of 430.68 percent. For a 14-day loan, that would mean a fee of $47.95. However, state law caps the total fees at 75 percent of the loan.
Fourth Ward Councilman Jerry Wade sponsored the new city ordinance, which would put a six-month moratorium on new payday loan businesses. He also commissioned a report that said the council's options include zoning restrictions that would stop payday lenders from clustering and an ordinance that would limit the total number of business licenses, based on population, that could be issued to such businesses.
Do payday loans need such regulation? If so, what should it be?
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