<<—  Iowa City CCI members celebrate last night after the Iowa City Council voted 7-0 to pass the first reading of our proposed ordinance to crack down on predatory payday lending. They’ve been working for several months to move the rule forward. Thanks for working to put people before payday lenders!

Here’s the resulting news story in the local press:

Iowa City looks to limit payday lenders

Greg Hennigan, Cedar Rapids Gazette

IOWA CITY – The City Council voted unanimously Tuesday night in favor of the first consideration of an ordinance restricting so-called payday lenders in Iowa City.

Two more readings are necessary for the ordinance to pass. It would ban the businesses from being within 1,000 feet of daycares, schools, parks and churches. Existing lenders would be grandfathered in.

Payday loans often are sought by people with problems accessing traditional financial institutions, like banks.

Supporters say they serve people who otherwise cannot get loans.

Critics say the loans have high interest rates that trap people in a cycle of borrowing.

Jeff Davidson, Iowa City’s director of planning and community development, said the city’s research found payday institutions nationwide are often in low-income areas with crime problems.

Iowa City has five payday loan businesses, all in south and southeast Iowa City.

The 1,000-foot rule is similar to restrictions on adult-themed shops and liquor stores in Iowa City.

Des Moines, West Des Moines, Clive and Ames also regulate payday lenders.

The Iowa City Council took up the matter after hearing concerns from Iowa Citizens for Community Improvement, an organization that speaks up on social-justice issues.


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We’ve put Bruce Rastetter on the defensive! This last week, he went on a statewide media blitz claiming that his AgriSol project was designed to benefit the people of Tanzania and that he never abused his position on the Board of Regents to secure Iowa State’s backing for the project.

Of course, we know better.

And now it’s time to make everyone aware of the real facts about his land grab and about his conflict of interest.

CCI members across the state are doing just that by writing to their local newspapers and speaking the truth about Rastetter’s unethical actions.

Find two of the many examples below:


Regent Bruce Rastetter should no longer serve

(Published in the Daily Iowan on July 23.)

Regent Bruce Rastetter should no longer serve on our state Board of Regents. Here are the allegations that deserve close scrutiny by the Iowa Ethics and Campaign Disclosure Board. His company, AgriSol, planned a Tanzanian refugee land-grab deal that was not reported to the regents until six weeks after he joined.

He created his own $1.75 million endowed professorship to help advance this project. He falsified state financial disclosures. He has a real or perceived conflict of interest with Iowa State University. He is using Iowa State’s prestige and our taxpayer dollars to promote his business interests. His company stood to make millions by bringing large-scale industrial agriculture to Africa at little or no benefit to the people there.

What more is needed to conclude that this man should not be an educational leader for our great university system? Well, consider that he has no background in education, that he asked the governor to make him a regent, and he was Gov. Terry Branstad’s largest contributor to 2010 campaign. We must stop corporate corruption from eroding the integrity of our university system.

-Virginia Meyer, Lone Tree


Be wary of corporate funds

(Published in the Ames Tribune on July 20.)

As an Iowa State graduate, former instructor, and 45-year resident of Ames, I am chagrined at the apparent intertwining of the interests of Regent Bruce Rastetter and Iowa State. It cheapens all Iowa State degrees and taints the reputation of all Iowa State scholars. It robs the citizens of Iowa of the benefits of their land grant institution.

The University is on a slippery slope when it accepts corporate sponsorship of research. Researchers can never fully dismiss the sources of their paychecks, as they affect selection and design of their work. The case of Bruce Rastetter co-opting Iowa State to line his own pocket and embarrass everyone is an object lesson in what can happen. Iowans must step up to fully fund their public universities. Administrators forced to carry tin cups to curry favor with corporate elites will be sorely tempted to cut crucial ethical corners. Iowa State University belongs to the citizens of Iowa, and we need to claim it and pay for it. Corporate money that destroy our institution is not a bargain.

Deborah Fink, Ames


Add your name to the petition calling on Branstad to Fire Bruce Rastetter:

Join hundreds of other Iowans calling on Gov. Branstad to fire Bruce Rastetter —  the man unable to separate his role as an Iowa public Regent from his personal financial interest.

Click here to read more and add your name.



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The following article appeared in The Daily Iowan on July 18, 2012. Read the full article online here.

By Aly Brown

The Iowa City Planning and Zoning Commission will discuss restricting where payday lenders may open outlets in the city after the Iowa City City Council approved discussions in March.

Senior city planner Robert Miklo said the commission is interested in regulating payday-lending operations after studies showed their potential negative effects on surrounding neighborhoods. The Planning and Zoning Commission will discuss a possible ordinance at 7 p.m. Thursday.

Payday lenders offer short-term loans to people between paychecks, charging high interest rates in return.

“They tend to be associated with high-crime areas and loitering, therefore having a negative effect on surrounding neighborhoods,” Miklo said.

He said Iowa City has not seen these effects, but the ordinance is intended to be a preventative measure.

Iowa City staff recommended zoning restructuring to force new payday lenders to build in community commercial zones, require a minimum of 1,000 feet between these operations, and separation from areas that may be negatively affected, and only allowing lenders licensed by the state of Iowa to build in the city limits, according to the report.

David Goodner, a community organizer with Iowa Citizens for Community Improvement, requested that the City Council regulate payday lenders in February.

City Councilor Rick Dobyns said he does not have an opinion on payday lenders yet, but he is interested in learning more from Iowa City citizens and city councilors.

“I think it’s a difficult situation to know the various options,” he said. “If they can’t be in the city at all, or separated by geographic distance, pushing them out to other areas of the city. I think we have to weigh those options.”

Dobyns said there are pros and cons with these lending operations, but he is interested in discussing a possible ordinance after similar legislation has been passed in other Iowa communities.

Miklo said officials researched similar ordinances in Des Moines, West Des Moines, Clive, and Ames.

According to a consumer-advisory bulletin from Iowa Attorney General Tom Miller, almost half of state payday loan borrowers borrow more than 12 payday loans a year.

“Leading to an average of $480 spent on borrowing fees alone per year,” he said in the bulletin. “Those dollars are down the drain.”

Nick Leyden, local associate financial adviser at Amerprise Financial, said he advises his clients against payday loans because of the astronomical interest rates.

“If people don’t have the money to do their daily life or if some extravagant event comes up and they don’t have the money to pay for it, they’ll borrow money at these payday-loan places,” he said. “What they offer is a huge interest rate on top but promise to cash the check one or two weeks out. The huge problem with that is how much you are paying in interest to get that money.”

Leyden said he advises consumers to live within their means, and retain a cash reserve to cover three to six months of living expenses.

City Councilor Connie Champion agreed that payday lenders make it too easy for people to borrow money, but said she is not sure how they should be regulated in Iowa City.

“Limiting them is fine, but the only thing that bothers me is it gives the people that are already out there a monopoly,” she said. “Ones that are already there will benefit from this. Getting more business, I don’t know. Not less business, but not more competition.”

The Daily Iowan Editorial Board writes an incredibly snarky editorial demanding the Iowa City Council crack down on payday lenders.

Read it online:  http://www.dailyiowan.com/2012/04/10/Opinions/27837.html


Beware the fat man scam


We all see and hear obnoxious low-budget commercials for payday lenders, usually featuring a sweaty man yelling at us to take out a “quick and easy” loan to soothe our fiscal anguishes until payday.

We sit back in our chairs, immediately irritated by the fat, sweating man, wondering who on Earth would fall for such a blatant scam — but there is a clear market of suckers for these loans, saddling many towns and cities, including our own, with the burden to regulate them.

Ladies and gentlemen, it’s time the Iowa City City Council defend its citizens against the savage vulture capitalists.

Some groups, such as Iowa Citizens for Community Improvement, have requested the City Council limit the number of such stores by using zoning rules to drive the predatory lenders out of Iowa City.

A fantastic idea, considering that the financially unstable University of Iowa student population would be easy prey for the payday lenders to sink their teeth into — a little extra money for the weekend out? Absolutely.

In case you don’t know, payday-loan suppliers turn a profit by charging people a fee for a loan that the customer will pay back by a certain date, typically their payday (hence the name.)

If the customer is unable to pay the company back before the date, they are charged an additional fee, which often causes the customers to find themselves in debt and even more financially desperation that may have been the initial cause of their visit to the store.

Think of a credit card but in a stationary building with snake-oil salesmen and nearly instant cash; that’s how the lenders operate.

Payday lenders have a tendency to set up shop in areas of a lower socioeconomic status, because this group of consumers will not likely have the ability to pay the loans back on time; in turn, providing the lenders with an indebted client that they can continue to use for money.

And not only do these desperate and uninformed consumers use payday lenders, but they file lawsuits when they find themselves in financial trouble — a consumer trying to file a lawsuit against a cigarette company, despite the surgeon general’s warnings.

But still, actions against these corrupt companies need to be taken.

In an attempt to regulate these lenders, the FTC has charged some of these lenders with “piling inflated fees on borrowers and making unlawful threats when collecting.”

The Citizens for Community Improvement has persuaded the City Council to consider a regulatory zoning plan in order to take back control of the neighborhoods: Restricting the businesses to one for every 20,000 residents; two miles between other stores and one mile from residential areas, churches, parks, and schools; and finally, stopping new stores from opening in neighborhood and pedestrian retail areas. The proposal is under consideration by the Planning and Zoning Commission.

These are fantastic zoning requirements, because they pretty much stop new stores from opening, period — they kill the carnivorous annelid worms before they are born.

Though these measures are enticing, an easier, and certainly cheaper, way to fight back is to better educate the consumer.

Although this is a good goal, it is unlikely that the public would be receptive to government advice, and it would be like pulling teeth to get people to listen. The FTC warns consumers about the dangers of payday lenders and even provides them with reasonable alternatives to taking out these loans, and the City Council can work hard to better inform people to make better choices instead of just making the choices for them.

But the government should put the heavy weight of regulation upon them, just as it regulates the smoke sticks that kill or the adrenaline-pumped casinos that rob citizens of their savings.

So, we must push the City Council to decide to use its zoning power to slowly push out these dangerous lenders without completely eliminating them — to protect the public from the scam of the sweaty, fat man.


>>Read more about our work to stop predatory payday lending.

>>Contact us to get involved in the Iowa City or Ames organizing efforts.


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Guest opinion

Written by Dick Greenwood

Appeared in the March 28, 2012 Iowa City Press Citizen: http://www.press-citizen.com/article/20120328/OPINION02/303280011/Iowa-City-must-act-now-curb-predatory-lending?odyssey=mod|newswell|text|Opinion|p

The Iowa City Council has an incredible opportunity to strengthen economic development and neighborhood revitalization and safeguard the welfare of the local community by using its zoning powers to restrict the number of predatory payday lenders that can operate in Iowa City.

Iowa Citizens for Community Improvement members support strong and effective public oversight that:

» Caps the density of payday loan shops to one for every 20,000 city residents.

» Requires separation distances of two miles between stores and one mile from residential areas, churches, parks, child care facilities and schools.

» Prohibits new stores from opening in neighborhood retail and pedestrian commercial districts.

These proposals are not controversial. In the absence of strong state action to cap interest rates on payday loans, the cities of Des Moines, West Des Moines and Clive have already passed similar local zoning ordinances, and Ames is considering a comparable proposal.

In Iowa, payday loans are effectively capped at $445 and are due in full in just 14 days. To get a payday loan for $445, a borrower must write a postdated check or authorize an automatic withdrawal from her/his bank account for $500. This means the average APR (annual percentage rate) for a payday loan in Iowa often exceeds 400 percent (as a point of comparison, Mafia loan sharks averaged just 250 percent in their hay day).

For a family living paycheck to paycheck, it can be impossible to pay back a $500 loan in just two weeks. That’s why 98 percent of all payday loans go to repeat customers. And 76 percent of all payday loans in Iowa go to customers getting a new loan every two weeks. Payday lending creates an instant debt trap and treadmill that can be impossible to escape.

But payday lenders rely on this debt trap to profiteer — which is why they are opposed to any attempts to curb the practice.

This might be a good business model to maximize corporate profits, but it’s not a good model to provide access to affordable credit to those who direly need it.

Payday loans are a bad financial product that hurt, rather than help, everyday hardworking families. And because so many payday loan companies are incorporated as out-of-state corporations, they do not pay income taxes on the profits they make in Iowa. $36 million in payday loan profits flee the state of Iowa every year, draining our local communities of hard-earned wealth that should be circulating here in our cities and towns rather than padding the bank accounts of out-of-state CEOs and unknown speculators.

Payday lenders also contribute to neighborhood blight and drive away legitimate businesses. In Iowa City, the majority of payday loan shops are located on the south and southeast areas of town. If the city is serious about developing those parts of town and ameliorating some of the social problems in those neighborhoods, then a tough new zoning policy to restrict predatory payday lending isn’t just the morally right thing to do, it’s also in the city’s long-term economic self-interest.

Iowa CCI members urge the Iowa City Council to put communities before corporate interests and to put people before profits and pass a strong zoning ordinance that includes a mix of the best density and distance restrictions on predatory payday lenders.

It’s time to put people first.

Vulture capitalism must be stopped.

Iowa City resident Dick Greenwood is a member of Iowa Citizens for Community Improvement.


>>Read more about members efforts to curb predatory payday lenders in Iowa.

>>In the Iowa City area and want to get involved? Contact us today.


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On March 6, the Iowa City City Council voted unanimously to consider CCI members’ model zoning ordinance to crack down on predatory payday lending.

This is an important step in our campaign to win local policies that put people first, and it’s because of the hard work of members just like you who called and emailed your councilors, attended meetings and public forums, and stood up and spoke out for what’s right. Thank you!

The Planning and Zoning Commission will now take up our proposal, and in the coming days and weeks we’ll make plans to weigh-in with city staff and the zoning board so they have all the information they need to move forward with the strongest ordinance possible.

We’ll also be convening a community meeting in the next week or two so we can gather our members together, educate ourselves on the issues, and make plans to keep the fires of justice lit underneath the city. Stay tuned.

Thanks again for all your support and hard work. We are making a big difference in Iowa City for economic development and neighborhood revitalization that puts communities before corporations and people before profits.

If you are more interested in getting involved with this issue, contact Iowa City organizer David Goodner at 515.282.0484 or david[at]iowacci.org

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