SPRINGFIELD, Mo. New payday loan regulations could be on the way in Springfield.
The city council is weighing two measures that would require more transparency regarding the interest rates that people pay.
A grassroots group rallied outside city hall in favor of proposed changes for payday lenders.
“We have tried for several years to address the exorbitant rates that predatory loans are charging people the really high-interest rates and that hasn’t made any progress in the Missouri legislature,” said Emily Bowen-Marler, a minister a Brentwood Christian Church, who also works with Faith Voices, “so some communities in Missouri are trying to address it by having these permitting fees, because it will discourage predatory lenders from setting up shop in Springfield.”
Bowen-Marler was one of the people supporting one of two payday loan ordinances.
She said, “just gets people caught in the cycle of debt. Where they’re going to have to pay rollover fee after rollover fee after rollover fee and that’s what ends up making the interest rates so high.”
“Shy of actually committing a crime, I would urge anybody to try any other avenue other than a payday loan,” said Kathy Lutz, a woman who had a bad experience with payday loans, “talk to the family. Talk to friends. Talk to your boss. See if they can advance you on your pay. Anything but getting in the payday loan trap. Because 412% interest which is what we paid on one of them is outrageous. It is outrageous and obscene.”
The two ordinances both include requirements for lenders to provide information about the true cost of the loan.
The only difference between them is a $5,000 permit fee per company, which both Marler and Lutz said should be necessary, as the money these lenders make don’t even stay in the city.
“These stores that are providing these loans to people, the money doesn’t stay in Springfield,” Marler said, “so it’s money that is being earned by Springfieldians and then leaving Springfield.”
“Most of this is not staying in our city, it’s not even staying in our state,” Lutz said.
Some other people who spoke at the council agree.
Collin Douglas, a minister at the Christian Church Disciples of Christ said, “payday loans contribute to making poor people poor, by offering loans with hidden fees, and high interest with no expectation that the person taking the loan will be able to pay it back, but will instead take more money out to pay for that loan, simply contributing to a cycle which is never-ending.”
Edna Smith also commented, saying “the fee, to me, is a way to keep at least some of that money in our city rather than it going off to those multi-state corporations.”
Tonight was just the public comment and first reading… The council did not vote on it.