City council considers payday loan business regulations
COLUMBIA - The Columbia city council is considering new regulations on payday loan companies and money lending businesses.
The city manager's office presented ideas to city council on Monday to plan poverty relief throughout Columbia.
Within the plan were the regulations on loan companies. Currently there are 23 different title and loan companies in the city.
Second Ward City councilmember Michael Trapp believes without regulations, the businesses hurt the low-income community.
"It's an incredibly expensive financial product that's marketed almost exclusively to low-income individuals. There are 23 payday loan providers in Columbia. Almost all of them are focused among the Business Loop and our central city where we have big concentrations of low-income people," said Trapp.
All someone needs to qualify for a payday loan is an income and checking account. This makes getting a payday loan easy, and with little upfront information on interest rates, some borrowers can find themselves in a tough spot.
The regulations would include zoning laws that would require each payday loan business to be at least a mile apart from each other, more transparency up front on information about expenses and fees, and the stricter enforcement of the law that you can't have more than one payday loan at a time.
Trapp suggests an information-sharing network.
"They could very easily create an information-sharing network to be able to check if you have loans with other providers, and they don't," Trapp said. "So their lack of action means that city government has to look at our public policy toolbox and see if we can improve the situation."
KOMU 8 News reached out to Mid-American Title Loans, TitleMax, and Car Title Loans of America but none could comment.