Group Pushing for Limit on Payday Loan Businesses & Pawn Shops
KANSAS CITY, Mo. — Some Jackson County legislators want to limit the number of pawn shops and payday lenders. Consumer advocates claim the shops exploit the poor by charging outrageously high interest rates.
The proposal would prevent two pawn shops or payday lenders from setting up shop within a couple of miles of each other in unincorporated Jackson County. Lawmakers say they want to prevent those areas from looking like the inner city.
These type of businesses are lined up one after another in areas of Kansas City like Independence Avenue, Troost and Main Street. Community groups claim concentrations of payday lenders and pawn shops breed crime and depress neighboring property values. A coalition of 40 churches called communities creating opportunity says these shops prey on the poor by charging annual interest rates that total 400 percent or more.
“Whether it’s a pay day loan, a check cashing place, a title loan, a pawn shop, they all provide services and remove wealth from poor areas of the city,” said Rev. Ernie Davis.
Under the proposal, businesses offering high-interest short term loans in unincorporated Jackson County could not set up shop within a thousand feet of a church, child care center, park, hospital, school or public building.
In a prepared statement, a spokesman for QC Holdings, the largest Payday lender in Missouri says:
“While there are no payday lending locations in unincorporated Jackson County, the proposed ordinance would hurt residents by denying them access to short-term loans that enable borrowers to avoid more-expensive and credit-damaging alternatives like bounced check fees and late bill payment penalties. This ordinance is a waste of time and taxpayer money.”
CCO members say this is just the beginning of an effort to crack down on an industry that has more storefronts in Missouri than McDonald’s and Starbucks combined.
“Our big work that we’re doing all together, all across the state, is to cap the rate,” said Rev Ernie Davis. “We’re not against people providing small dollar loans to the poor We are against the triple digit interest rates. we’d like to cap that.”
The Jackson County proposal also would prevent pawn shops and payday lenders from being within 500 feet of neighborhoods.