Cedar Rapids 6th city to take on payday lenders

In a unanimous vote Tuesday afternoon, the Cedar Rapids City Council passed an ordinance to restrict where payday lenders can locate. Cedar Rapids became the sixth city in Iowa to pass an ordinance.The ordinance, modeled after ordinances passed in Iowa City and Ames, will severely restrict where any new lender can locate within the city.Darrel Wrider, Cedar Rapids resident and CCI member, hailed its passage.

“I’m pleased the Cedar Rapids city council is working to crackdown on predatory payday lenders. This ordinance is a good first step in curbing their growth. It is my hope the Iowa state legislature will act next session and truly address the abusive practices of the payday lending industry by passing a statewide interest rate cap. ”

The state legislature, not cities, has the authority to regulate interest rates on payday loans, which currently average just under 400% APR. Despite strong grassroots support for interest rate caps, the legislature has failed to bring a bill to the governor’s desk. This leaves cities to address the problem through zoning, with Dubuque next on the list of cities poised to take action.Des Moines was the first Iowa city to pursue ordinances to control the growth of payday lenders in May of 2010. Since then, the state has seen an 18% decrease in payday lenders operating in Iowa.

CCI members will continue to push for interest rate caps on payday loans at the state level in next year’s legislative session. Until then, CCI vows to pursue all tools, including zoning ordinances, to curb the abusive practices of payday lenders.