New Study Tells Inside Story of how Local Communities use Ordinances to say ‘Enough’ to Payday Lenders
Robert Mayer of the University of Utah and I just finished an 18-month study of community approaches to controlling payday lending . The study concludes with ten lessons communities can use to pass similar ordinances on any subject matter. In The Power of Community Action: Anti-Payday Loan Ordinances in Three Metropolitan Areas, we document how local communities positively organize to control payday lending in their jurisdictions and thereby create important legal change. Our whole report as well as an executive summery can be found here.
We hope this study will galvanize local communities and show them how they can make a difference in changing the law and society as a whole, Payday loans, which are borrowed against future paychecks and can carry interest rates of 400 percent or more, often strip wealth from society’s most economically vulnerable individuals and communities. These loan outlets now outnumber all McDonald’s, Burger King, Starbucks and Walgreens stores combined. In states where legislative controls are weak — and in the absence of federal regulations — some local governments have stepped forward to address the problems caused by high-cost, predatory payday loans.The researchers traveled to three regions — Silicon Valley in Northern California; Greater Metropolitan Dallas in Texas; and Greater Salt Lake City in Utah — to see how local entities have produced numerous ordinances aimed at halting the spread of payday lending. The locations were chosen for their diverse demographic, cultural, political and legal characteristics.