Sunday, December 22, 2013

Payday Lending Debate Will Head to the Idaho Statehouse... Again

Posted By on Sun, Dec 22, 2013 at 2:00 PM

The issue of predatory payday lending practices is expected, yet again, to surface in the Idaho Legislature, which convenes Jan. 6, 2014. Previous efforts to put payday lenders on a short leash have been unsuccessful at the Statehouse, but this morning's Twin Falls Times-News reports that the Idaho Department of Finance and Twin Falls Republican Sen. Lee Heider are busy crafting a new measure that would institute new state regulatory guidelines.

On Dec. 16, the Caldwell City Council unanimously passed an ordinance that regulates where payday loan businesses can open. Simply put, they won't be allowed in commercial areas and can only operate in so-called manufacturing or light industrial zones. And if a new business wants to open in any other type of zone, they'll need special permission from the Caldwell Council. Existing businesses are not affected by the new ordinance.

A typical Idaho payday loan is a two-week loan of approximately $300, with a fee of $15 to $18 per $100 borrowed.

The Idaho Community Action Network says when Gem State residents borrow large sums of money from payday lenders, it begins a vicious cycle.

"They go to social services, which are already very crowded," ICAN's Yuliana Nogales told Citydesk. "It's just like home loans that were given to people who can't afford it. They're given money; they know they can't pay it [back]."

And Heider tells the Times-News that cities, armed only with zoning laws, shouldn't be left holding the bag in trying to regulate payday lending.

"We don’t want the Burleys, the Caldwells and the Idaho Falls to deal with it,” Heider told the Times-News.

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