Payday Lenders Now Restricted in Waukesha
Waukesha Common Council puts limits on where payday loan stores can locate in the city.
Payday lenders looking to locate in Waukesha will now have limited options about where they can place their business.
The Waukesha Common Council unanimously passed Tuesday night an ordinance that would restrict where the payday loan stores can locate. The ordinance prohibits payday lenders from locating within 3,000 feet of another payday lender and within 500 feet of any residential district.
The city currently has 10 payday lenders in Waukesha. Proposed changes would mean seven of the payday lending stores would be non-compliant; however, those stores would be grandfathered into the ordinances.
Between two and four payday lenders could locate in the city – depending on where the businesses open – under the new restrictions.
Neighborhood aesthetics, economic viability and high interest rates were among primary reasons for the payday lender restrictions.
Payday loan stores receive high criticism for high interests rates on loans given to conceivably the most vulnerable borrowers. About 70 percent of payday loan borrowers use the loans to pay monthly bills, according to the Huffington Post.
The immediate access to cash is attractive to some borrowers strapped for money. But the average borrow spent $900 in fees, interest and principal for a $375 loan in 2011, according to the Huffington Post.
Some states have implemented legislation to limit the short-term loans. Changes in Colorado saved residents there $100 million in 2011 by extending the minimum term from two weeks to six months, according to the Associated Press.
A State of Wisconsin document warns borrowers that annual interest rates can reach 500 percent of the loan. Wisconsin has limits on the loans that include capping interest charges after a loan meets maturity.
While approving the ordinance, Alderman Andy Reiland had some concerns about interfering with business.
“We are a free market society,” Reiland said. “Businesses open and close within the city. … It is customers that dictate whether these businesses survive or not. By restricting this, is it a feel good that we are doing?”
Matt
3:43 pm on Wednesday, March 6, 2013
This is a good move. I would personally like to see them banned in general. It is a legal form of loan sharking. They take advantage of the people in the most need and at the worst points of their lives, then bleed them into spiraling debt.
When you are most vulnerable (lost job, emergency medical bill or car repair) they offer you a micro loan and you have to take it, just to be put into a huge sum of debt, then if you fall behind they call you daily, stack up huge interest payments, until they lastly take you to court and garnish your wages and significantly hurt your credit scores.
How about the banks we bailed out with our tax money actually give people micro loans at a reasonable or fair interest rate.....what a concept.
TOM
7:57 am on Thursday, March 7, 2013
I don't like these scum bags either but they have a unique way of getting our welfare money back from anybody stupid enough to use their service. nobody forces anybody to go to the casino either!
the 'sha guy
4:52 pm on Wednesday, March 6, 2013
I agree with Reiland. It is not the councils place to be micro managing capitalism in the city. The market will dictate whether these stores are viable entities.
@Matt
Nobody is forcing someone to use them. Should the council also ban liquor stores and forbid cigarettes and lottery tickets from being sold in the city?
"They offer you a loan and have to take it" Says who? Trust me on this. Many of the people who can't pay their bills are also the ones with big screen hi-def tvs, xboxs, iPhones. The word to use shouldn't be vulnerable, it should be prioritization and personal responsibility.
Jaime Lannister
5:29 pm on Wednesday, March 6, 2013
Right on 'sha guy. These payday loan stores shouldn't need to have a physical location anyway. Can't they just send out employees to book loans and collect the vig on the streets? If anything set up a social club for them all to base their operations out of...
the 'sha guy
10:11 pm on Wednesday, March 6, 2013
Move to a Communist country if you like the government intrusion into the private sector.
Jaime Lannister
11:09 am on Thursday, March 7, 2013
@Sha guy, move to a communist country if you don't like representative government. What the common council did is completely normal in a republic such as the one here in the United States.
clearthinker
10:47 pm on Wednesday, March 6, 2013
A step in the right direction to enhance the quality of life in Waukesha!
Next they should ban all Woodman-like warehouse stores and insist that Sendiks open a store somewhere on the west side of town.
Mr Lundt
7:32 am on Thursday, March 7, 2013
The degree that the government acts as and people want the government to be a nanny is jaw dropping.
These contracts may be stupid but being stupid is not against the law.
Jaime Lannister
11:12 am on Thursday, March 7, 2013
Loan sharking and usury have been against the law in the United States pretty much since the nations inception. More concerning is how these "stores" have managed to disregard the laws governing interest rates by simply calling the exorbitant interests rates that they charge "fees".
Mr Lundt
7:55 am on Thursday, March 7, 2013
On the upside---if I am an existing payday lender I am thrilled. THe city has effectively blocked any competition. Now I can raise my rates or act like a blockhead to my clients without much fear of competition.
the 'sha guy
8:25 am on Thursday, March 7, 2013
If the people have income, they should be able to put off a bill for a month rather than get a loan. Bill collectors understand, and I'm sure a $5.00 late fee is less expensive than an 18% loan. If people don't have the money, a loan store is certainly not the answer to cover expenses for the month to stop what is inevitable. What will they do next month?
The key to figuring this out has remained constant through history. You don't spend more than you are take in.
Chaos78
12:41 am on Friday, March 8, 2013
and the credit card is what?
the 'sha guy
6:30 am on Friday, March 8, 2013
@chaos,
Exactly. A credit card when used properly is fine. However, if someone is using a credit card to live beyond their real income level, then it is a problem. Just like a loan store, nobody is forcing people to use a credit card.
Mr Lundt
11:18 am on Thursday, March 7, 2013
If a crime is being committed then prosecute.
Clearly there is NOT as the government is doing a weak end -around.
Mr Lundt
11:20 am on Thursday, March 7, 2013
Jaime
If a crime is being committed then prosecute.
Clearly there is NOT as the government is doing a weak end -around.
Jaime Lannister
11:41 am on Thursday, March 7, 2013
@Lundt they can't prosecute because the laws against white collar crimes have no teeth and have been left open to interpretation. Blue collar crimes are punishable by the most severe of consequences, however white collar crime is much safer.
Mr Lundt
12:10 pm on Thursday, March 7, 2013
Please Jaime
That is just rubbish.
They COULD prosecute if a crime was being committed. Heck an attorney would love a class action lawsuit and shut them down---but the reality is that NOTHING illegal is going on.
Allen Bieszk
1:38 pm on Thursday, March 7, 2013
Unfortunately, some people can't control their spending habits. My wife used to borrow from these loan sharks to pay off another payday loan store. Pretty soon she owed over $1000, and it would have cost her about $3000 to pay back her $1000 had I not found out about it and paid it off for her. Who charges 23% interest on a loan. I could have perfect credit, and they would still charge me the highest interest rate, but that is the difference. If I were smart enough to have perfect or near perfect credit, I would be smart enough to know to stay far, far away from these loan sharks.
Mr Lundt
3:46 pm on Thursday, March 7, 2013
Allen
We can discuss can't control or won't control another day.
The fact is that adults in this society have some personal responsibility and accountability. Let's not blame the business because people make choices.
annoyed with whiners!!
7:28 am on Friday, March 8, 2013
Who is really to blame if YOU are in a financial crisis?? Since when is it a good idea to rob Peter to pay Paul?? Payday companies charge higher interest because they do not loan based on credit. This is a business' with an open sign ready to help people in a pinch. People are told the interest rate and are shown what exactly they will be paying before signing. They also have 24 hours to change there mind interest free. "Legal loan sharking" is an ignorant comment. Nothing is free....look at the markup on any item you buy. Im pregnant and i want a good night sleep..i can buy a pregnancy pillow for $50-200.