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Code of Ordinances Amendment_Title 15 UDC Payday LendersPlanning Services Department City Hall 50 West 13th Street Dubuque, IA 52001-4864 (563) 589-4210 phone (563) 589-4221 fax (563) 690-6678 TDD planning@cityofdubuque.org The Honorable Mayor and City Council Members City of Dubuque City Hall — 50 W. 131" Street Dubuque IA 52001 Dubuque THE CITY OF J4Wrk1I mor -mit •mu DUBO'tJE Masterpiece on the Mississippi July 14, 2014 Applicant: City of Dubuque Description: Text Amendment to the Unified Development Code to amend Section 16- 7, Supplemental Use Regulations, by adding a new Section 16-7.5 Pay Day Lending Establishments and adding siting requirements. Dear Mayor and City Council Members: The City of Dubuque Zoning Advisory Commission has reviewed the above-cited request. The application, staff report and related materials are attached for your review. Discussion Associate Planner Kyle Kritz, representing the City of Dubuque, outlined the requested amendment, reviewed the definition of Payday lending establishments, the number of existing establishments and their locations within the city of Dubuque. Planning staff reviewed maps depicting potential separation distances from residential districts and from other payday lending establishments. Separation requirements for other Iowa cities were reviewed and the areas that would remain for new payday lenders to locate in if separation requirements are established. Staff noted that if the Commission was in favor of establishing separation requirements for payday lending establishments, that the same distances used for separation of adult entertainment businesses be used. There were several public comments in support of the proposed amendment, stating that by establishing regulations for payday lending establishments, it will put pressure on the state to draft legislation regulating pay day lenders and interest rates. Another speaker stated that she supports the amendment because she works with people who have been trapped by the high interest rates charged. The Zoning Advisory Commission discussed the request and felt it was appropriate. Recommendation By a vote of 4 to 0, the Zoning Advisory Commission recommends that the City Council approve the request. Service People integrity Responsibility Innovation Teamwork The Honorable Mayor and City Council Members Page 2 A simple majority vote is needed for the City Council to approve the request. Respectfully submitted, Patrick Norton, Chairperson Zoning Advisory Commission Service People Integrity Responsibility innovation Teamwork THE CITY OF DUB Masterpiece on the Mississippi ['Variance ❑Conditional Use Permit ❑Appeal ['Special Exception ❑Limited Setback Waiver ❑Rezoning/PUD/ID Dubuque bitzl AV1 •:JI1 20' PLANNING APPLICATION FORM ▪ Preliminary Plat ❑ Major Final Plat ['Minor Final Plat ['Simple Site Plan ['Minor Site Plan ❑Major Site Plan [Simple Subdivision ®Text Amendment ['Temporary Use Permit ['Annexation [Historic Revolving Loan ❑Historic Housing Grant City of Dubuque Planning Services Department Dubuque, IA 52001-4805 Phone: 563-589-4210 Fax: 563-589-4221 planning@cityofdubuque.org ['Certificate of Appropriateness ['Advisory Design Review (Public Projects) ['Certificate of Economic Non -Viability ['Historic Designation ❑ Demolition ['Port of Dubuque Design Review Please type or print legibly in ink Property owner(s): N/A Phone: Address: City: State: Zip: Fax #: Cell #: E-mail: Applicant/Agent: City of Dubuque Planning Address: 50 W. 13th St. Fax #: N/A Cell #: N/A Services Department Phone: 589-4210 City: Dubuque State: IA Zip: 52001 E-mail: planning@cityofdubuque.or9 Site location/address: N/A Neighborhood Association: N/A Existing zoning: N/A Proposed zoning: N/A District: N/A Landmark: D Yes ❑ No Legal Description (Sidwell parcel ID# or lot number/block number/subdivision): N/A Total property (lot) area (square feet or acres): N/A Describe proposal and reason necessary (attach a letter of explanation, if needed): Amend Seciton 16-7 Supplemental Use Regulations by adding a new Section 16-7.5 Pay Day Lending Establishments and establishing siting requirements. CERTIFICATION: I/we, the undersigned, do hereby certify/acknowledge that: 1. It is the property owner's responsibility to locate property lines and to review the abstract for easements and restrictive covenants. 2. The information submitted herein is true and correct to the best of my/our knowledge and upon submittal becomes public record; 3. Fees are not refundable and payment does not guarantee approval; and 4. All additional required written and graphic materials are attached. Property Owner(s): Date: Applicant/Agent: Date: FOR OFFICE USE ONLY — APPLICATION SUBMITTAL CH KLIST Fee: Received by: Date: 6�7//'7 Docket: STATE OF IOWA {SS: DUBUQUE COUNTY CERTIFICATION OF PUBLICATION I, Suzanne Pike, a Billing Clerk for Woodward Communications, Inc., an Iowa corporation, publisher of the Telegraph Herald,a newspaper of general circulation published in the City of Dubuque, County of Dubuque and State of Iowa; hereby certify that the attached notice was published in said newspaper on the following dates: July 11, 2014, and for which the charge is $22.33. Subscribed to before m Notary Public in and for Dubuque County, Iowa, this /7a day of , 20 /. Notary Public in and for Dubuque County, Iowa. MARY K, WESTERMEYER Commission Number 154885 !Ay Comm. Exp. FEB. 1. 2017 1 CITY OF DUBUQUE, IOWA • OFFICIAL NOTICE NOTICE IS HEREBY GIVEN that the Dubu- que City Council will conduct a public hear- ing . at a meeting to commence at 6:30 p.m. on July 21, 2014, In the Historic Federal Build- ing, 350 West 6th Street, on the follow- ing: Text Amendments Request by the City of Dubuque td amend the Unified Development ` Code to allow the keeping of Hens for I Egg Production as an 1 I accessory use in rest- I dentia) districts. t .Request by the City of 1 Dubuque -to. amend Section 16-7, Supple- mental Use Regula- ' tions, by adding a new Section 16-7.5Establish- ' D h Lending . ments and adding siting requirements. Request by the City of Dubuque to amend section 16-2-3 of the Unified Development Code to re•move the aetinnion or aisaonity and to redefine the definition of family to Include a reference to City Code Chapter 8-1.1 defining-di4abll lty. Written' comments re- garding the :above pub- lic hearings •-may be submittedto the City Clerk's Office oh or be- fore said time of public hearing. At sal d time and place of public hearings all Interested citizens and parties will be given an oppor- tunity to be heard for, or against said actions. Copies of supporting; documents for the pub- lic hearings are- on file in the City Clerk's Of- fice and may be viewed during regular working hours. Any visual or hearing Impaired persons needing special assis- tance or persons with special accessibility needs should contact the Gity Clerk's Office at (563) 589-4100 or TTY (563) 556-9948 at least 48 hours prior to the meeting. Kevin 5. Firnstahl, CMC, City Clerk 1t 7/11 Prepared by: Laura Carstens, City Planner Address: City Hall, 50 W. 13th St Telephone: 589-4210 Return to: Kevin Firnstahl, City Clerk Address: City Hall- 50 W. 13th St Telephone: 589-4121 ORDINANCE NO. 46-14 AN ORDINANCE AMENDING TITLE 16 OF THE CITY OF DUBUQUE CODE OF ORDINANCES, UNIFIED DEVELOPMENT CODE, BY AMENDING ARTICLE 16-7 SUPPLEMENTAL USE REGULATIONS BY ADDING A NEW SECTION 7-5 TITLED PAY DAY LENDING ESTABLISHMENTS AND ESTABLISHING REGULATIONS TO THEIR LOCATION IN THE COMMUNITY. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. That Title 16 of the City of Dubuque Code of Ordinances, Unified Development Code Article 7-5 is hereby added as follows: 7-5: Pay Day Lending Establishments 7-5.1 Purpose A. The special provisions of this Section are intended to regulate the location of pay day lending establishments as herein defined, by specifying districts in which such uses may be permitted and requirements for spatial separation of such uses. Nothing in this Code shall be construed or interpreted to permit pay day lending establishments in areas other than those set forth herein. B. The provisions of this Section shall govern the location and spatial separation of pay day lending establishments in commercial districts and industrial districts, and no such regulated use, as defined, may be permitted except in conformance with these provisions. 7-5.2 Definition: Pay Day Lender: a company that; 1) accepts a check dated subsequent to the date it was written, and/or; 2) accepts a check on the date it was written and holds the check for a period of time prior to deposit or presentment pursuant to an agreement with, or any representations made to, the maker of the check, whether expressed or implied. Ordinance 46-14 Page 2 7-5.3 Pay Day Lending — Siting Requirements A. Establishments may be established within any commercial or industrial zoning district, but shall not be located within 1,200 feet of any residential district. B. No pay day lending establishment shall be located within 2,500 feet of any other pay day lending establishment. Section 2. The foregoing amendment has heretofore been reviewed by the Zoning Advisory Commission of the City of Dubuque, Iowa. Section 3. This ordinance shall take effect immediately upon publication, as provided by law. Passed, approved and adopted this 21st day of July, 2014. Roy D. BJ/ Mayor Attest: ments as herein, de- /s/Roy D. Buol, Mayor fined, by `specifying`: Attest: /s/KevinS. districts in which such ` Firnstahl, City Clerk uses may be `permitted' Published officially in and requirements for ` the Telegraph Herald spatial separation of - newspaper on the 25th such uses. Nothing in day of July, 2014. thisCode shall be con- " /s/Kevin S. Firnstahl, strued or interpreted CMC, City Clerk to permit pay day lend'- it 7/25"` ing establishments in areas other than. those ' set forth herein. B. The provisions of this Section shall gov- ern the location and spatial " separation' of pay day lending estab- lishments in commer- cial,districts and indus- trial districts,- and no such regulated use, as defined;, may be per- mitted except in con- formance with these '( ['Provisions. 7-6.2 Definition: Pay Day Lender: a company'`:" that; ,1:) accepts a t check ,dated subse- querit ,to the date it i was written, and/or; 2) - ; accepts a.check on the OFFICIAL date It was written and PUBLICATION holds the check for a ORDINANCEN0.46.14 eperiod of time: prior, to I N CE NO.4 -14 deposit or presentment AMENDING TITLE 16 pursuant to an agree OF THE CITY OF DU meet with, or any rep,. BUQUECODE OF OR— resehtations made, to, DINANCES, ' UNIFIED'the•maker of" the DEVELOPMENT 1 plressedowrmpled. ex - CODE, BY AMENDING ay ARTICLE. ; L6 7 SUP Siti7ng53P. ReqDoryuirementsLending PLEMENTAL USE p ; I REGULPTIONS . BY mayti` be _ established ADDING %A; NEW .SEC- Establishments withiin;any commercial 710N 7-S �ITLEOPAY or 'industrial" zoning DAY LENDING ESTAB district, but shall not ITABLISHING"REGULA ,LISHMENTS AND ES - ' S ,be located within 1,200 ' feet;of.any residential ITIONS' TO THEIR' LO district. I [CATION IN THE COM B,"No pay day lending MUNITY 'establishment shall be .: NOW, THEREFORE, BE "located within 2,500`I IT ORDAINED, BY THE feet of any other pay CITY COUNCIL OF THE day lending establish - CITY OF DUBUQUE,, 10 meet INA: Section 2 forego - Section 1. That Titltrig e d t has Sec The orego amen men heretofore been re- viewed by the Zoning's Advisory .Commission of the City of Dubuque, Iowa. Section 3. This ordi- nance shall take effect `l immediately upon pub- lication, as provided by law. Passed, approved ands. adopted=this 21st day of July, 2014. 16 of the City of Dubu- que Code of Ordinan ces, Unified Develop- ment Code Article 7-5 is hereby added as fol- lows: 7-5: Pay Day Lending Establishments 7-5.1 Purpose A. The special provi- sions of this Section are intended to regu- late the location of pay day lending establish- STATE OF IOWA {SS: DUBUQUE COUNTY CERTIFICATION OF PUBLICATION I, Suzanne Pike, a Billing Clerk for Woodward Communications, Inc., an Iowa corporation, publisher of the Telegraph Herald,a newspaper of general circulation published in the City of Dubuque, County of Dubuque and State of Iowa; hereby certify that the attached notice was published in said newspaper on the following dates: July 25, 2014, and for which the charge is $27.25. Subscribed to before Notary Public in and for Dubuque County, Iowa, this 01_544 day of : , 20 /� /,�. . I_ otary Public in and for Dubuque County, Iowa. 'RMEYER Ar 154.885 1, 2017 Page of ?? Kevin Firnstahl FYI: Join us at the Dubuque City Council meeting next ? Monday, July 21! From:Mike Van Milligen To:City Council Members Date:7/19/2014 5:44 AM Subject:FYI: Join us at the Dubuque City Council meeting next Monday, July 21! CC:Firnstahl, Kevin;  Lindahl, Barry Begin forwarded message: From: "Sue Wilson" <wilsonsue@mchsi.com > Date: July 18, 2014 at 10:14:01 PM CDT To: "Sue Wilson" <wilsonsue@mchsi.com > Subject:Join us at the Dubuque City Council meeting next Monday, July 21! If you are free on Monday evening 6:30 p.m............please join us at the City Council chambers for a visible sign of community support. Thanks to all who have campaigned for this needed action. League of Women Voters Research Committee of DBQ Dems ICCI 11th Street Neighborhood Community Action Committee Subject: Join us at the Dubuque City Council meeting next Monday, July 21! Importance: High Hi folks! For the past 12 months, we've been working to pass a restrictive payday lending ordinance in Dubuque. We've met with dozens of community leaders, city council members and other city staff. We've made great progress and now I need your help on Monday, July 21. For years we've worked to rein in the abusive practices of payday lenders. At the Statehouse, we've worked to pass a bill to cap interest rates at 36% on payday loans. At the city level, we have passed ordinances that restrict where new payday lenders can locate. Cities cannot pass interest rate caps their tool in the toolkit is separation - distance ordinances. And we've been successful since 2010, CCI members have passed - eight ordinances across the state and seen a 20% decline in payday shops. The last two months, our campaign has really heated up. The Dubuque City Council held a work session on May 19 on the proposed ordinance where city staff recommended a strong ordinance that would restrict where payday lenders can locate. We showed strength in numbers, with lots of people coming to the City Council to show their support for the ordinance. All city council members agreed they wanted to move forward with the ordinance. file:///C:/Users/kfirnsta/AppData/Local/Temp/XPgrpwise/53CA05D2DBQ_...7/22/2014 Page of ?? The ordinance would: 1)Restrict where new payday lenders can locate <!--\[if !supportLists\]--<!--\[endif\]-- >> (the existing ones would be grandfathered in) 2)Establish separation distances 1,200 feet from <!--\[if !supportLists\]--<!--\[endif\]-- >>- residential and 2,500 feet from any two payday lenders; and prohibits new payday lenders from locating in Community Development Block Grant (CDBG) areas Two weeks ago, on July 2, the Zoning Advisory Commission met and unanimously approved the ordinance city staff presented. The next step is for the ordinance to go to the City Council for its first reading. It's crucial we have a lot of folks there in support of this ordinance. Join us at 6:30 on Monday, July 21, at the City Council Chambers. Please let me know if you can make it by calling me, Bridget Fagan, at 5152550800 or -- email me at bridget@iowacci.org . Thanks! Bridget Fagan Community Organizer 515.255.0800 (office) bridget@iowacci.org www.iowacci.org This email is free from viruses and malware because avast! Antivirus protection is active. Click here to report this email as spam. file:///C:/Users/kfirnsta/AppData/Local/Temp/XPgrpwise/53CA05D2DBQ_...7/22/2014 THE CITY OF DUBT'UE Masterpiece on the Mississippi MEMORANDUM TO: Zoning Advisory Commission FROM: Laura Carstens, Planning Services Manager V -t./ SUBJECT: UDC Zoning Text Amendment for Payday Lenders DATE: June 5, 2014 Introduction Dubuque AMlmettcaCm 11111! 2007.2012 •20I3 This memorandum transmits a request from the City Council for the Zoning Advisory Commission to consider a UDC zoning text amendment to regulate the location of payday lenders. The text amendment ordinance and background information previously submitted to the City Council for their May 19 work session are enclosed for your consideration. The enclosed list of stakeholders were notified of the Commission's public hearing on potential zoning regulations for payday lenders. Input received to date is enclosed. Background Enclosed is research on possible zoning regulations for payday lenders previously provided on March 17, 2014. Information on the nature, impacts, and regulation of payday lenders is enclosed from the Iowa Citizens for Community Improvement and the Pew Charitable Trust. Payday loans are defined as small, short-term, unsecured loans, and are sometimes referred to as cash advances. Payday loans generally require that the consumer have a previous payroll and employment record, generally charge a much higher interest rate than a standard bank loan, and carry a substantial risk to the lender. Opponents of payday lenders recommend that cities and states regulate the industry by capping interest rates, requiring credit checks for patrons and by implementing zoning regulations that limit new business locations using density and separation requirements. In Iowa, cities can regulate the location of payday lenders, but cities cannot regulate their interest rates or prohibit payday lenders. Des Moines, West Des Moines, Clive, Ames, Iowa City, Cedar Rapids and Windsor Heights require a physical separation between payday lenders as well as separation from residentially -zoned districts, as shown below. Work Session on Payday Lenders Municipal Zoning Regulations for Separation of Payday Lenders Iowa Community Separation between Lenders Separation from Residential Ames 1,000 feet 1,000 feet Cedar Rapids 1,000 feet 1,000 feet Clive 1,000 feet 1,000 feet Des Moines 1/2 mile 250 feet Iowa City 1,000 feet 1,000 feet West Des Moines 1/2 mile 250 feet Windsor Heights 1,000 feet 1,000 feet In April 2014, based on additional input from concerned citizens and City Council members, Planning Services Staff reexamined the Iowa ordinances that regulate payday lenders. Most require separation from residential districts and from each other. Some ordinances also require separation from schools, playgrounds, parks, pawn shops and liquor stores. Staff determined that a separation buffer from residential districts, where most schools, parks and playgrounds are located, serves to achieve the intended goal of making the existing payday lenders non -conforming and preventing others from locating in the buffer area in the future. This method would also be easier to regulate business locations. There are approximately 120 carry -out liquor outlets within Dubuque. Staff did not have to use liquor stores as a buffer because buffering from residential districts and from other payday lenders achieved almost the same effect and is easier to administer. Discussion First, Planning Services staff analyzed ordinances in seven Iowa cities that have varying physical separations between payday lenders as well as from residential districts. Staff explored zoning regulations for separation of the eight payday lenders in Dubuque. Six are mostly located in the west side commercial areas with two found in the downtown area. Map One shows each payday lender's location ringed with 500 -foot, 1,000 -foot and 2,500 - foot separation buffers from other lenders. At 500 and 1,000 feet, only two of the eight lenders would be made legally non -conforming, or "grandfathered". At 2,500 feet, six of the eight would be made legally non -conforming. Map Two illustrates that using a 1,200 -foot buffer from any residentially -zoned district, for example, would make seven of the eight payday lenders legally non -conforming and significantly reduce the area where new lenders could locate. The eligible locations for new lenders under this scenario would include areas at Asbury Plaza, Wal-Mart, Inn Plaza, Wacker Plaza, Westside Court / Menards, the former Dubuque Pack site, Historic Millwork District, Port of Dubuque, and Chaplain Schmitt Island. Next, Planning Services staff looked to the City's regulations for separating adult entertainment establishments as a way to regulate the location of payday lenders. These regulations require a minimum of 1,200 feet from residential districts and a minimum of 2,500 feet between each establishment. These buffers are the most restrictive separation requirements in the City's zoning regulations. 2 Work Session on Payday Lenders Map Three applies the buffering for adult entertainment establishments to payday lenders. The map shows the locations of the payday lenders, schools and liquor stores, as well as eligible areas left for new payday lenders. The residential buffer can be increased at the City Council's discretion to reduce the eligible areas for new payday lenders. Map Four compares the city's Community Development Block Grant (CDBG) target areas in relation to payday lenders. CDBG target areas are where most of the city's low-income households, those most likely to need the services provided by a payday lender, reside. Note that only two of the eight payday lenders are located in or near these areas. Both locations would become non -conforming and no new payday lenders could locate here. However, staff cannot predict how many payday lenders, if any, would be eliminated over time using zoning regulations. Zoning to separate payday lenders would have little effect on the existing businesses or on consumers using either an existing business or an on-line resource. Non -conforming businesses could remain open, and even reopen at the same location if closed for less than a year. On-line services generally are exempt from zoning. The City Council has discussed encouraging State lawmakers to establish more stringent banking and loan regulations for these businesses, in addition to local zoning restrictions. Recommendation By using separation requirements, the Commission could eliminate most of the eligible locations within the city and make most or all of the existing payday lenders legally non- conforming. New lenders could not open in the non -eligible areas. In determining how to restrict locations for future payday lenders, the Commission may wish to consider whether the intent is to concentrate this activity in a limited area or disperse it to reduce its concentration. Reducing the area where lenders may locate by creating a buffer from residentially -zoned districts would concentrate the activity. Having a separation between payday lenders would tend to disperse them. Using both separation from residential districts and from each other would tend, over time, to accomplish both goals. If the Commission supports zoning regulations for payday lenders, Planning Services staff recommends applying the separation regulations for adult entertainment establishments to payday lenders. These regulations require a minimum of 1,200 feet from residential districts and a minimum of 2,500 feet between each establishment. These buffers are the most restrictive separation requirements in the City's zoning regulations. Requested Action The requested action is for the Zoning Advisory Commission to provide a recommendation to the City Council with respect to possible zoning regulations for payday lenders. Enclosures cc: Kyle Kritz, Associate Planner Guy Hemenway, Assistant Planner F:\USERS\LCARSTEN\WP\ZONING\Payday lenders\Memo ZAC UDC Text amend payday lenders.doc 3 THE CITY OF Uub3 tJ'QtJE Masterpiece on the Mississippi TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Materials for Work Session on Payday Lenders DATE: May 14, 2014 Dubuque bite ilmericaCily,o 2007 • 2012 2013 Planning Services Manager Laura Carstens is transmitting information for the Work Session on Payday Lenders. 42Lfill144Micel C. Van Milligen MCVM:jh Attachment cc: Barry Lindahl, City Attorney Cindy Steinhauser, Assistant City Manager Teri Goodmann, Assistant City Manager Laura Carstens, Planning Services Manager &PA- eiblk %a\ SW? - U`b\\ 46P- C4A)k- \P) UtA)(, (-)WA ba)..)AQAULr- Masterpiece on the Mississippi MEMORANDUM TO: Michael C. Van Milligen, City Manager FROM: Laura Carstens, Planning Services Manager?T . SUBJECT: Materials for Work Session on Payday Lenders DATE: May 13, 2014 Dubuque ***** MAmeticaCiry 2007 • 012 • 2013 Introduction This memorandum transmits materials for City Council consideration at their May 19th work session on payday lenders. It also combines my March 7, 2014 and April 16, 2014 memos. Background Enclosed is research on possible zoning regulations for payday lenders previously provided on March 17, 2014. Information on the nature, impacts, and regulation of payday lenders is enclosed from the Iowa Citizens for Community Improvement and the Pew Charitable Trust. Payday loans are defined as small, short-term, unsecured loans, and are sometimes referred to as cash advances. Payday loans generally require that the consumer have a previous payroll and employment record, generally charge a much higher interest rate than a standard bank loan, and carry a substantial risk to the lender. Opponents of payday lenders recommend that cities and states regulate the industry by capping interest rates, requiring credit checks for patrons and by implementing zoning regulations that limit new business locations using density and separation requirements. In Iowa, cities can regulate the location of payday lenders, but cities cannot regulate their interest rates or prohibit payday lenders. Des Moines, West Des Moines, Clive, Ames, Iowa City, Cedar Rapids and Windsor Heights require a physical separation between payday lenders as well as separation from residentially -zoned districts, as shown below. Municipal Zoning Regulations for Separation of Payday Lenders Iowa Community Separation between Lenders Separation from Residential Ames 1,000 feet 1,000 feet Cedar Rapids 1,000 feet 1,000 feet Clive 1,000 feet 1,000 feet Des Moines 1/2 mile 250 feet Iowa City 1,000 feet 1,000 feet West Des Moines % mile 250 feet Windsor Heights 1,000 feet 1,000 feet Work Session on Payday Lenders Stakeholder lnput The City Council discussed receiving input from various stakeholders on both sides of the issue of payday loans, including payday lenders and civic and non-profit organizations. As work sessions generally are limited to a presentation by City staff without public input, interested parties typically can only listen to the discussion. At City Council's direction, Planning Services staff notified various stakeholders of the work session and invited them to contact City Council members directly or in writing prior to the meeting to express their views. The invitation letter and the list of invitees are enclosed. Recommendation By adopting separation requirements, the City Council could eliminate much of the eligible locations within the city and make most or all of the existing payday lenders legally non- conforming. New lenders could not open in the non -eligible areas. In determining how to restrict locations for future payday lenders, the City Council may wish to consider whether the intent is to concentrate this activity in a limited area or disperse it to reduce its concentration. Reducing the area where lenders may locate by creating a buffer from residentially -zoned districts would concentrate the activity. Having a separation between payday lenders would tend to disperse them. Using both separation from residential districts and from each other would tend, over time, to accomplish both goals. If the City Council wishes to adopt zoning regulations for payday lenders, Planning Services staff recommends applying the separation regulations for adult entertainment establishments to payday lenders. These regulations require a minimum of 1,200 feet from residential districts and a minimum of 2,500 feet between each establishment. These buffers are the most restrictive separation requirements in the City's zoning regulations. However, staff cannot predict how many payday lenders, if any, would be eliminated over time using zoning regulations. Zoning to separate payday lenders would have little effect on the existing businesses or on consumers using either an existing business or an on-line resource. Non -conforming businesses could remain open, and even reopen at the same location if closed for less than a year. On-line services generally are exempt from zoning. It may be more effective for the City Council to encourage State lawmakers to establish more stringent banking and loan regulations for these businesses, such as maximum interest rates and other terms that help protect the consumer from what has been deemed predatory lending practices. Requested Action The requested action is for the City Council to provide further direction with respect to possible regulation of payday lenders at the work session on May 19, 2014. Enclosures cc: Kyle Kritz, Associate Planner Guy Hemenway, Assistant Planner F:\USERSWCARSTEN\WP\ZONING\Payday lenders\Memo MVM payday loans combined.dac 3 THE CITY OF DUB Dubuque Masterpiece on the Mississippi WIAmetleaCiry '111' 2007.2012.2013 Planning Services Department City Hall - 50 West 13th Street Dubuque, IA 52001-4805 (563) 589-4210 phone (563) 589-4221 fax (563) 690-6678 TDD plannin_g@eitvadubuoue.org Date Name Address City State Zip code SUBJECT: May 19, 2014 Work Session on Possible Zoning Regulations for Payday Lenders The Dubuque City Council is considering the enclosed research they requested on possible zoning regulations for payday lenders in the city of Dubuque. If adopted, new zoning regulations would impact future payday lenders. Existing locations would not be impacted. The City Council will hold a work session on this topic on May 19, 2014 at 5:15 p.m. in the Council Chambers of the Historic Federal Building, 350 W. 6th Street, in downtown Dubuque. You are invited to contact the City Council prior to their work session in person, via telephone or email, or by mailing written correspondence to the City Clerk, 50 W. 131h Street, Dubuque, Iowa 52001. To send an email to the entire City Council, visit the City website, www.citvofdubuque.orq to complete our Contact Form and select "City Council" as the department. Individual telephone numbers and email addresses are provided below. Name Position Telephone Email Address Roy D. Buol Mayor 563.564.5455 rdbuol@cityofdubuque.org Ric Jones At -Large Councilman 563.556.3490 rjones@cityofdubuque.org David Resnick At -Large Councilman 563.582.9217 dresnick@cityofdubuque.org Kevin Lynch Ward One Councilman 563.582.2655 klynch@cityofdubuque.org Karla Braig Ward Two Councilwoman 563.582.0595 kbraig@cityofdubuque.org Joyce Connors Ward Three Councilwoman 563.582.3843 jconnors@cityofdubuque.org Lynn Sutton Ward Four Councilwoman 563.845.0252 Isutton@cityofdubuque.org You also are invited to attend the work session to listen to the discussion but not speak. Public input at work sessions is at the discretion of the Mayor, who decides if anyone may speak. The City Council will not vote on zoning regulations at the work session. Adoption of new zoning regulations requires public hearings before the Zoning Advisory Commission and City Council. If you have any questions regarding this information, please feel free to contact the Planning Services Department at 563-589-4210 or planninq(a,cityofdubuque.orq. Sincerely, Laura Carstens Planning Services Manager Service People Integrity Responsibility Innovation Masterpiece on the Mississippi Name Organization Street Address City State Zip Code Dubuque battel NMmericaCRY 'I1II'' 2007 • 2012.2003 Planning Services Department City Hall - 50 West 130 Street Dubuque, IA 52001-4805 (563) 589-4210 phone (563) 5894221 fax (563) 690-6678 TDD planning@citvofdubuque.org April 29, 2014 SUBJECT: May 19, 2014 Work Session on Possible Zoning Regulations for Payday Lenders The Dubuque City Council is considering the enclosed research they requested on possible zoning regulations for payday lenders in the city of Dubuque. If adopted, new zoning regulations would impact future payday lenders. Existing locations would not be impacted. The City Council will hold a work session on this topic on May 19, 2014 at 5:15 p.m. in the Council Chambers of the Historic Federal Building, 350 W. 6th Street, in downtown Dubuque. You are invited to contact the City Council prior to their work session in person, via telephone or email, or by mailing written correspondence to the City Clerk, 50 W. 13th Street, Dubuque, Iowa 52001. To send an email to the entire City Council, visit the City website www.citvofdubuque.orq to complete our Contact Form and select "City Council" as the department. Individual telephone numbers and email addresses are provided below. Name Position Telephone Email Address Roy D. Buol Mayor 563.564.5455 rdbuol@cityofdubuque.org Ric Jones At -Large Councilman 563.556.3490 rjones@cityofdubuque.org David Resnick At -Large Councilman 563.582.9217 dresnick@cityofdubuque.org Kevin Lynch Ward One Councilman 563.582.2655 klynch@cityofdubuque.org Karla Braig Ward Two Councilwoman 563.582.0595 kbraig@cityofdubuque.org Joyce Connors Ward Three Councilwoman 563.582.3843 jconnors@cityofdubuque.org Lynn Sutton Ward Four Councilwoman 563.845.0252 Isutton@cityofdubuque.org You also are invited to attend the work session to listen to the discussion but not speak. Public input at work sessions is at the discretion of the Mayor, who decides if anyone may speak. The City Council will not vote on zoning regulations at the work session. Adoption of new zoning regulations requires public hearings before the Zoning Advisory Commission and City Council. If you have any questions regarding this information, please feel free to contact the Planning Services Department at 563-589-4210 or planninq(a�citvofdubuque.orq. Sincerely, Laura Carstens Planning Services Manager Service People Integrity Responsibility Innovation Payday lenders work session invitees Advance America 2600 Dodge Street Dubuque, IA 52003 Allied Pawn and Payday Partners 2013 Central Avenue Dubuque, IA 52001 Check Into Cash 3500 Dodge Street Dubuque, IA 52003 Check -N -Go 806 Wacker Drive Dubuque, IA 52002 EZ Money 3301 Pennsylvania Avenue Dubuque, IA 52002 Hometown N Cash Advance 3416 Pennsylvania Avenue Dubuque, IA 52002 Hometown N Cash Advance 605 West Locust Dubuque, IA 52001 Payday Partners 3305 Asbury Dubuque, IA 52002 Bridget Fagan Iowa Citizens for Community Improvement 3424 Cottage Grove Drive Des Moines, IA 50311 David Roberts Dubuque County League of Women Voters 2282 Pasadena Drive Dubuque, IA 52001 Sr. Ruth Fagan Sisters of Saint Francis 3390 Windsor Avenue Dubuque, IA 52001 Masterpiece on the Mississippi TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Scheduling Work Session on Payday Lenders DATE: April 17, 2014 Dubuque NI-IMeilcaCIry 2007 • 2012 • 2013 Planning Services Manager Laura Carstens recommends the City Council schedule a Work Session for May 19, 2014, on payday lenders. I concur with the recommendation and respectfully request Mayor and City Council approval. 72,J144 �Wsr Mic ael C. Van Milli9 en MCVM:jh Attachment cc: Barry Lindahl, City Attorney Cindy Steinhauser, Assistant City Manager Teri Goodmann, Assistant City Manager Laura Carstens, Planning Services Manager Masterpiece on the Mississippi TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Regulation of Payday Lenders DATE: March 6, 2014 Dubuque ***** Anmeneacar '111' 2007 • 2012 • 2013 Planning Services Manager Laura Carstens is transmitting information on possible zoning regulations for payday lenders in response to a request by the City Council on November 18, 2013. Mictfael C. Van Milligen MCVM:jh Attachment cc: Barry Lindahl, City Attorney Cindy Steinhauser, Assistant City Manager Teri Goodmann, Assistant City Manager Laura Carstens, Planning Services Manager Masterpiece on the Mississippi MEMORANDUM TO: Michael C. Van Milligen, City Manager FROM: Laura Carstens, Planning Services Manager SUBJECT: Set a Date for Work Session on Payday Lenders DATE: April 16, 2014 Dubuque All America City 11111 1' 2007 • 2012 • 2013 Introduction This memorandum requests City Council set the date for a work session on payday lenders for May 19, 2014 at 5:15 p.m. in the City Council Chamber at the Historic Federal Building. Initial Research Enclosed is initial research on possible zoning regulations for payday lenders previously provided to the City Council on March 17, 2014. Planning Services staff explored zoning regulations for separation of the eight payday lenders in Dubuque. Staff's initial analysis based on ordinances in seven Iowa cities that have a physical separation between payday lenders as well as from residential districts is shown on Map One and Map Two. Additional Research Based on additional input from concerned citizens and City Council members, Planning Services Staff reexamined the Iowa ordinances that regulate payday lenders. Generally, they require separation from residential districts and from each other. Some ordinances also require separation from schools, playgrounds, parks, pawn shops and liquor stores. Staff determined that a separation buffer from residential districts, where most schools, parks and playgrounds are located, serves to achieve the intended goal of making the existing payday lenders non -conforming and preventing others from locating in the buffer area in the future. This method would also be easier to regulate business locations. There are approximately 120 carry -out liquor outlets within Dubuque. Staff did not have to use liquor stores as a buffer because buffering from residential districts and from other payday lenders achieved almost the same effect. Planning Services staff looked to the City's regulations for buffering adult entertainment establishments as a way to regulate the location of payday lenders. These regulations require a minimum of 1,200 feet from residential districts and a minimum of 2,500 feet between each establishment. These buffers are the most restrictive separation requirements in the City's zoning regulations. Work Session on Payday Lenders Map Three applies the buffering for adult entertainment establishments to payday lenders. The map shows the locations of the payday lenders, schools and liquor stores, as well as eligible areas left for new payday lenders. The residential buffer can be increased at the City Council's discretion to reduce the eligible areas for new payday lenders. Map Four compares the city's Community Development Block Grant (CDBG) target areas in relation to payday lenders. CDBG target areas are where most of the city's low-income households, those most likely to need the services provided by a payday lender, reside. Note that only two of the eight payday lenders are located in or near these areas. Both locations would become non -conforming and no new payday lenders could locate here. Stakeholder lnput The City Council discussed receiving input from various stakeholders on both sides of the issue of payday loans, including payday lenders and civic and non-profit organizations. Since City Council work sessions generally are limited to a presentation by City staff without public input, interested parties typically can only listen to the discussion. Planning Services staff suggests notifying various stakeholders of the City Council work session and inviting them to contact City Council members directly or in writing prior to the meeting to express their views. A sample letter and a list of possible invitees are enclosed for City Council consideration. Requested Action The requested action is for the City Council to provide further direction with respect to possible regulation of payday lenders, to set the date of the work session for May 19, 2014, and to provide further direction on soliciting stakeholder input for the work session. Enclosures c: Kyle Kritz, Associate Planner Guy Hemenway, Assistant Planner F:\USERS\LCARSTEN\WP\ZONING'Memo MVM payday loans doc 2 THE CITY OF Dubuque tal DUB E II ' �I Masterpiece on the Mississippi 2007.2012.2013 Planning Services Department City Hall - 50 West 1301 Sheet Dubuque, IA 52001-4805 (563) 589-4210 phone (563) 589-4221 fax (563) 690-6678 TDD planning@cityofdubuque.org April 17, 2014 Name Organization Street Address City State Zip Code SUBJECT: May 19, 2014 Work Session on Possible Zoning Regulations for Payday Lenders The Dubuque City Council is considering the enclosed research they requested on possible zoning regulations for payday lenders in the city of Dubuque. If adopted, new zoning regulations would impact future payday lenders. Existing locations would not be impacted. The City Council will hold a work session on this topic on May 19, 2014 at 5:15 p.m. in the Council Chambers of the Historic Federal Building, 350 W. 6th Street, in downtown Dubuque. You are invited to contact the City Council prior to their work session in person, via telephone or email, or by mailing written correspondence to the City Clerk, 50 W. 13th Street, Dubuque, Iowa 52001. To send an email to the entire City Council, visit the City website, www.citvofdubuque.orct to complete our Contact Form and select"City Council" as the department. Individual telephone numbers and email addresses are provided below. Name Position Telephone Email Address Roy D. Buol Mayor 563.564.5455 rdbuol@cityofdubuque.org Ric Jones At -Large Councilman 563.556.3490 rjones@cityofdubuque.org David Resnick At -Large Councilman 563.582.9217 dresnick@cityofdubuque.org Kevin Lynch Ward One Councilman 563.582.2655 klynch@cityofdubuque.org Karla Braig Ward Two Councilwoman 563.582.0595 kbraig@cityofdubuque.org Joyce. Connors Ward Three Councilwoman 563.582.3843 jconnors@cityofdubuque.org Lynn Sutton Ward Four Councilwoman 563.845.0252 Isutton@cityofdubuque.org You also are invited to attend the work session to listen to the discussion but not speak. Public input at work sessions is at the discretion of the Mayor, who decides if anyone may speak. The City Council will not vote on zoning regulations at the work session. Adoption of new zoning regulations requires public hearings before the Zoning Advisory Commission and City Council. If you have any questions regarding this information, please feel free to contact the Planning Services Department at 563-589-4210 or planninq@.citvofdubuque.orq. Sincerely, Laura Carstens Planning Services Manager Service People Integrity Responsibility Innovation Payday lenders work session invitees Advance America 2600 Dodge Street Dubuque, IA 52003 Allied Pawn and Payday Partners 2013 Central Avenue Dubuque, IA 52001 Check Into Cash 3500 Dodge Street Dubuque, IA 52003 Check -N -Go 806 Wacker Drive Dubuque, IA 52002 EZ Money 3301 Pennsylvania Avenue Dubuque, IA 52002 Hometown N Cash Advance 3416 Pennsylvania Avenue Dubuque, IA 52002 Hometown N Cash Advance 605 West Locust Dubuque, IA 52001 Payday Partners 3305 Asbury Dubuque, IA 52002 Bridget Fagan Iowa Citizens for Community Improvement 3424 Cottage Grove Drive Des Moines, IA 50311':, .. David Roberts Dubuque County League of Women Voters 2282 Pasadena Drive Dubuque, IA 52001 Sr. Ruth Fagan Sisters of Saint Francis 3390 Windsor Avenue Dubuque, IA 52001 THE CITY OF Dui Masterpiece on the Mississippi MEMORANDUM TO: Michael C. Van Milligen, City Manager FROM: Laura Carstens, Planning Services Manager '/ SUBJECT: Regulation of Payday Lenders DATE: March 7, 2014 Dubuque *AmuIcaCity IIIl., 2007 • 2012 • 2013 Introduction This memorandum transmits information on possible zoning regulations for payday lenders in response to a request by the City Council on November 18, 2013. Background Information on the nature, impacts, and regulation of payday lenders is enclosed from the Iowa Citizens for Community Improvement and the Pew Charitable Trust. Payday loans are defined as small, short-term, unsecured loans, and are sometimes referred to as cash advances. Payday loans generally require that the consumer have a previous payroll and employment record, generally charge a much higher interest rate than a standard bank loan, and carry a substantial risk to the lender. Opponents of payday lenders recommend that cities and states regulate the industry by capping interest rates, requiring credit checks for patrons and by implementing zoning regulations that limit new business locations using density and separation requirements. In Iowa, cities can regulate the location of payday lenders, but cities cannot regulate their interest rates or prohibit payday lenders. Des Moines, West Des Moines, Clive, Ames, Iowa City, Cedar Rapids and Windsor Heights require a physical separation between payday lenders as well as separation from residentially -zoned districts, as shown below. Municipal Zoning Regulations for Separation of Payday Lenders Iowa Community Separation between Lenders Separation from Residential Ames 1,000 feet 1,000 feet Cedar Rapids 1,000 feet 1,000 feet Clive 1,000 feet 1,000 feet Des Moines 1/2 mile 250 feet Iowa City 1,000 feet 1,000 feet West Des Moines 1/2 mile 250 feet Windsor Heights 1,000 feet 1,000 feet Regulation of Payday Lenders Discussion Planning Services staff explored zoning regulations for separation of the eight payday lenders in Dubuque. These businesses are mostly located in the west side commercial areas with two found in the downtown area. Map One shows each payday lender's location ringed with 500 -foot, 1,000 -foot and 2,500 - foot separation buffers from other lenders. At 500 and 1,000 feet, only two of the eight lenders would be made legally non -conforming, or "grandfathered". At 2,500 feet, six of the eight would be made legally non -conforming. Map Two illustrates that using a 1,200 -foot buffer from any residentially -zoned district, for example, would make seven of the eight payday lenders legally non -conforming and significantly reduce the area where new lenders could locate. The eligible locations for new lenders under this scenario would include areas at Asbury Plaza, Wal-Mart, Inn Plaza, Wacker Plaza, Westside Court / Menards, the former Dubuque Pack site, Historic Millwork District, Port of Dubuque, and Chaplain Schmitt Island. Recommendation By adopting separation requirements, the City Council could eliminate much of the eligible locations within the city and make most or all of the existing payday lenders legally non- conforming. New lenders could not open in the non -eligible areas. In determining how to restrict locations for future payday lenders, the City Council may wish to consider whether the intent is to concentrate this activity in a limited area or disperse it to reduce its concentration. Reducing the area where lenders may locate by creating a buffer from residentially -zoned districts would concentrate the activity. Having a separation between payday lenders would tend to disperse them. Using both separation from residential districts and from each other would tend, over time, to accomplish both goals. However, Planning Services staff cannot predict how many payday lenders, if any, would be eliminated over time using zoning regulations. Non -conforming businesses could remain open, and even reopen at the same location if closed for less than a year. Also, on-line services generally are exempt from zoning regulations. Conclusion Zoning regulations to separate payday lenders would have little effect on the existing businesses or on consumers using either an existing business or an on-line resource. It may be more effective for the City Council to encourage State lawmakers to establish more stringent banking and loan regulations for these businesses, such as maximum interest rates and other terms that help protect the consumer from what has been deemed predatory lending practices. Requested Action The requested action is further direction with respect to possible zoning regulations of payday lenders. Enclosures F \USERS\LCARSTEN\WP\ZONING\Memo MVM payday loans.doc 2 TI -IE CITY OF Dui Masterpiece on the Mississippi TO: Laura Carstens, Planning Services Manager FROM: Guy Hemenway, Assistant Planner 6..:\A SUBJECT: Regulation of Payday Loan Businesses DATE: March 5, 2014 Dubuque kattil All -America C$ty 11 111, 2007 • 2012 • 2013 INTRODUCTION Based on a request from a City Council member, the City Manager has asked that Planning Services staff investigate regulation of payday loan (PDL) businesses in the City of Dubuque. BACKGROUND Payday loans are defined as small, short-term, unsecured loans, and are sometimes referred to as cash advances. Payday loans generally require that the consumer have a previous payroll and employment record, generally charge a much higher interest rate than a standard bank loan, and carry a substantial risk to the lender with default rates of 10-20%. The City of Ames, Iowa defines a payday lender as a company that: 1. Accepts a check dated subsequent to the date it was written, and/or; 2. Accepts a check on the date it was written and holds the check for a period of time prior to deposit or presentment pursuant to an agreement with, or any representations made to, the maker of the check, whether expressed or implied. For purposes of this discussion staff will use this two- part definition. A recent search of phone book and internet records indicates that there are eight PDL businesses within the city of Dubuque. The local PDL businesses are somewhat broadly distributed, most being located on the city's west side in commercialized areas with two located in the downtown area. DISCUSSION Opponents of PDL businesses contend that they prey upon low income individuals that can least afford higher interest rates. The PDL industry states that they provide a service not available to many low income individuals that enable them to pay short-term critical bills, such as utilities, rent, and auto repair. Regulation of Payday Loan Businesses Page 2 Opponents of PDLs recommend that cities and states regulate the industry by capping interest rates, requiring credit checks for patrons and by implementing zoning regulations that limit a PDL's ability to locate new businesses using density and separation requirements. Separation requirements have been used effectively to limit the number and location of other potentially detrimental businesses such as adult entertainment establishments. Currently, within the state of Iowa, the cities of Des Moines, West Des Moines, Clive, Ames, Iowa City, Cedar Rapids and Windsor Heights have approved ordinances that require a physical separation between PDLs as well as separation from residentially -zoned districts. An advocacy group, listed as Iowa CCI, notes that the Iowa Attorney General has stated that, by law, municipalities can legally implement both separation and density ordinances in an effort to regulate PDLs. ANALYSIS Credit.com reports that almost anyone with a checking account and steady income can obtain a payday loan. However, PDLs are most commonly used by borrowers who do not have access to credit cards or savings accounts. Also, because these loans do not generally require a credit check, people with no credit or with credit problems turn to PDLs. Although PDLs can be a tool for quickly and easily borrowing cash during an emergency, people can get into financial trouble when they are unable to repay the debt within the specified time period. This can lead to expensive additional fees and to what is called the payday loan cycle. Those borrowers who are not able to repay within the allotted time frame often borrow additional money and sink deeper into debt. Credit.com also notes that many states have very specific laws that regulate the lending industry. Although these laws vary widely, some states have usury laws that strictly regulate the amount that a payday lender can charge and some states, such as New York, ban payday lenders outright. Credit.com also notes, however, that payday lenders often work around these regulations by partnering with banks based in other states, or by offering services on-line. Under Iowa law, a city may not categorically exclude payday lending or regulate terms such as interest rates. However, cities in Iowa are empowered to regulate the place at which payday lending occurs. This can be accomplished using zoning regulations. To restrict the locations eligible for PDLs using zoning regulations, it is necessary to distinguish payday lenders from other types of lenders and credit services in the zoning code, and then to identify the particular restrictions that would apply to that class of commercial activity. Using the City of Ames' definition of payday lending, staff has determined that there are currently eight PDLs within the city of Dubuque. The first method of regulation that staff explored is separation of PDLs from each other. Staff applied several minimum separation distances between each PDL. The attached map shows each store's current known location ringed with 500, 1,000 and 2,500 foot separation buffers. At 500 and 1,000 feet, only two of the eight PDLs would be made legally non -conforming. At 2,500 feet, six of the eight would be made legally non- conforming. The City could make some or all of the existing PDLs legally non- conforming by adjusting the separation distance. 2 Regulation of Payday Loan Businesses Page 3 The other method used to limit the PDLs ability to locate a new store is to require their separation from residentially zoned districts. This method is currently used to regulate adult entertainment businesses within the city (along with separation from schools and from other adult entertainment businesses). Using a 1,200 foot buffer from a residentially zoned district, for example, would make seven of the eight existing PDLs non -conforming and significantly reduce the area new stores could locate. The attached map illustrates that the PDL eligible areas would primarily be located on the city's southwest, northwest and far east sides. This would include a portion of Asbury Plaza, the Port of Dubuque, the Wal-Mart area, Inn and Wacker Plazas, Westside Court/Menards, the former Dubuque Pack site, a portion of the Historic Millwork District and Chaplain Schmitt Island. By modifying the separation area(s) outlined above, the City could eliminate much of the PDL eligible area within the city and make most or all of the existing PDLs legally non -conforming. In determining which, if any, of the regulatory methods cited to use in restricting future payday lending business locations, the City Council may wish to consider whether the intent is to concentrate this activity in a limited area or disperse it to reduce its concentration. Reducing the area available in which lenders may locate by creating a buffer from residentially zoned districts would be an effective means of concentrating the activity. Requiring a separation between PDLs would tend to disperse them. Using both separation from residential districts and from each other would tend, over time, to accomplish both goals. It is important to note that, by using municipal zoning regulations, each PDL made legally non -conforming because it did not meet the required separation could continue to operate provided that it met all other local, state and federal regulations. Also, based on current regulations governing non -conformities, if a non -conforming PDL ceased operation for less than a year another could re -open at the same location. However, a non -conforming PDL could not reopen at the same location after the business ceased for a year or more. Also, no new PDL could open at any different location within the separation area after the date that the ordinance was adopted. There are eight existing PDLs and they could legally continue to operate should a separation regulation be adopted. Even if several PDLs were to be lost through attrition, those remaining could continue to operate and would likely absorb the business from the overall client pool. It is important to note that industry research indicates that many payday loan companies are transitioning to on-line services that are remotely located and, therefore, generally exempt from local zoning regulations. The City Council may want to consider the rationale for requiring separation distances for PDLs. In the case of adult oriented businesses, there exists evidence that these establishments should be regulated because of their demonstrable negative secondary effects, such as increased crime rates and negative impact on property values. With PDLs, such concerns may not be as evident. Also, it is not possible to predict how many PDLs, if any, would be eliminated over time using these regulations. It is noteworthy that a recent editorial in the Telegraph Herald (attached) stated that the 3 Regulation of Payday Loan Businesses Page 4 most effective way to regulate PDLs is through state banking and loan regulations that establish maximum interest rates and other terms that help protect the consumer from what has been deemed predatory lending practices. CONCLUSION The information included in this memo demonstrates that the use of zoning regulations for separation requirements could easily make several or all of the existing PDLs within the city limits legally non -conforming. The businesses that were made non -conforming could remain and even reopen at the same location if closed for a year or less. However, new PDLs could not open in the non -eligible separation areas. In all likelihood, this would have little effect on the existing business or on the ability of the consumer to find a payday loan either by frequenting an existing business or by using the on-line resource. Furthermore, zoning based PDL separation regulations will have little to no impact on online payday loan services. The method that may be more effective for municipalities is to encourage State of Iowa lawmakers to establish more stringent banking and loan regulations for these businesses. This memo has been provided for your information. Enclosures 4 Iowa Citizens for Community Improvement We talk. We act. We get it done. 2001 Forest Avenue Des Moines, IA 50311 ph 515.282.0489 fx 515,283.0031 www.iowacci.org WHY PAYDAY LENDING IS A PROBLEM In Iowa, payday loans are effectively capped at $445 and are due in full in just 14 days. To get a payday loan for $445, you write a postdated check or authorize an automatic withdrawal from your bank account for $500. This means that the average APR (annual percentage rate) for a payday loan in Iowa is 430%: $15 charged for the first $100 borrowed and then $10 per every $100 after that, up to $500. For a family living paycheck to paycheck with an emergency need, it can be impossible to pay back a $500 loan in just two weeks. This is why 98% of all payday loans go to repeat customers. 76% of all payday loans go to customers getting a new loan every two weeks. Payday lending creates an instant debt trap that can be impossible to escape. But payday lenders rely on this debt trap to make a profit — which is why they are so opposed to any attempts to curb the practice. And because so many payday loan companies are incorporated as out of state corporations, $40 million in payday loan profits flees the state of Iowa every year, draining local communities of wealth and economic activity. THE FACTS ABOUT PAYDAY LENDING 98% of payday loan borrowers are repeat customers - 76% of payday loan borrowers have to re -borrower within two weeks of getting their last payday loan - Payday loan customers are four times more likely to have filed for bankruptcy than the average adult - The average APR of mafia loans during the mob's heyday was approximately 250% - The average APR nationally for a payday loan is over 400% - The average payday loan borrower repays $800 for a $325 loan — that's $475 in fees and interest - There were 200 payday lending outlets in the U.S. in 1993; there are more than 22,000 today — that means there are more payday lending outlets in the U.S. than there are McDonalds and Burger King restaurants combined WHAT PAYDAY LENDING REALLY MEANS - Loans with 400% (or higher) interest rates - Loans due in full in just two weeks - No regard for your ability to repay (no credit check and no questions about your current financial situation) - A potentially dangerous product that traps the majority of customers in a cycle of debt that can be impossible to escape - Harassing collection techniques towards not only you but your friends and family if you can't pay rc Iowa Citizens for Community Improvement We talk. We act. We get it done. 2001 Forest Avenue Des Molnes,IA 50311 ph 515,282.0484 fx 515.283.0031 www.Iowacctorg WHAT WE HAVE DONE CCI has worked to pass ordinances to curb the growth by restricting where payday lenders can operate in 7 cities in Iowa — Des Moines, West Des Moines, Clive, Ames, Iowa City, Cedar Rapids and Windsor Heights. Since we started this work in 2010, there has been an almost 20% drop in the number of payday lenders in Iowa. WHAT WE'RE WORKING TO DO We know to really address the problem of payday lending in Iowa, we need legislation to cap the interest rate of a payday loan at 36% - the same usury rate that applies to banks. In the meantime, we will continue to work to pass ordinances throughout the state to curb the growth of payday lenders and send a strong message to our legislature that our communities don't want these predatory businesses in our state. CCI is a statewide grassroots organization with over 3,200 members across the state. One issue CCI works on is payday lending and has worked to pass all 7 ordinances in Iowa. Hcm Fevd WNGel04ihi gro Poor ?or Gm fflc WaOCr'k� lrlt g= NG©ord ]r®fffta A Report by National People's Action January 2012 TABLE OF CONTENTS 1. Report Summary and Main Findings Page 3 II. Payday Loans: An Overview Page 4 III. Explosive Growth in Payday Lending Page 7 IV. The Annual Consumer Cost of Payday Lending Page 13 V. Policy Recommendations Page 18 VI. Report Methodology and Data Page 19 NATIONAL PEOPLE'S ACTION 810 North Milwaukee Avenue ® Chicago, IL 60642 a 312.243.3035 www.noa-us.org Author: Nicholas Bianchi National People's Action - January 2012 2 1. Report Summary Despite recent regulatory crackdowns on payday lending in seven states, the payday loan business is flourishing in states with weaker consumer protections. In recent years the major payday lenders have achieved record profits from this form of high-cost, small -dollar loans targeting subprime borrowers. While much of the economy is credit -starved, the nation's major banks continue to provide the payday loan industry with capital to issue millions of usurious and predatory loans. The result is that every year billions of dollars are paid by the working -poor and other cash-strapped borrowers in excessive fees on payday loans. This report urges strong regulatory action by states and the newly empowered Consumer Financial Protection Bureau to reform the costly and financially irresponsible practices of the payday loan industry as it currently exists in 33 states. Main Findings: • The nation's largest payday loan companies have earned a record $1.5 Billion in combined annual revenues from high-cost payday loans. • The nation's major banks including Bank of America, JPMorgan Chase, and Wells Fargo finance approximately 42% of the entire payday loan industry nationwide. • State regulators report that payday loans cost borrowers a minimum of $3.4 Billion in fees annually. • Every year an estimated $3.1 Billion in wealth is "stripped" from the pockets of needy borrowers directly into the coffers of the nation's payday lenders. • The segment of the payday loan industry funded by the big banks results in a minimum of $1.5 Billion annually in wealth -stripping from excessive fees paid by payday loan borrowers nationwide. National People's AcI1o11 - January 2012 3 II. Payday Loans: An Overview of Legalized Usury Payday loans are short-term cash loans that average $350 borrowed for a two week term. The loan is repaid from a borrower's next paycheck or government benefit check'. To obtain a payday loan, the borrower gives the lender a postdated personal check or authorization to make a withdrawal from the borrower's bank account. In return, the borrower receives cash, minus the lender's fees. Typical loans fees range from $15 to $20 per $100 borrowed, or a $52 to $70 price tag for a single $350 loan. With short loan terms of less than one month, payday loans typically charge an annual percentage rate (APR) between 390% and 550%. These triple digit interest rates along with a business model that encourages repeat borrowing make payday loans one of the most expensive forms of consumer credit available. Despite its explosive growth over the last 15 years, payday lending remains a niche financial product targeting subprime borrowers.2 Many Americans with access to mainstream banking services and credit cards may never step foot into a payday loan shop. However, an estimated 25.6% of all American households representing 39 million adults are either "unbanked" (7.7% of all households) or "under - banked" (17.9% of households). 3 Also, significant racial and ethnic disparities exist in terms of access to mainstream financial services; 53% of African-Americans, 43% of Hispanics, and 44% of Native Americans are either unbanked or underbanked. ' Eligible sources of government income for a payday loan include U.S. Social Security, Disability Insurance (SSD!), and, in some cases, unemployment benefits. 2 Many payday lenders offer cash advance loans as their sole product while others offer additional financial services, such as check - cashing services, pawn loans, and auto title loans targeting the unbanked, under -banked, or otherwise credit -impaired consumers. 3 FDIC National Survey of Unbanked and Underbanked Households, 2009. The FDIC defines "underbanked" households as those that have a checking or savings account but rely on alternative financial services. National People's Action - January 2012 4 Percent of "Unbanked" and "Underbanked" Individuals by Race, Ethnicity 35.0% 30.0% 25.0% 20.0% 1S.0% 10.0% 5.0% 0.0% .qac • `aa \C �a `La v- �a ■ % Unbanked ■ % Underbanked Source: FDIC, 2009 It is these unbanked and under -banked individuals, many of whom comprise the so-called "working poor," that are a target market for the payday loan industry. An estimated 16.2% of under -banked households have used payday loans and 6.6% of unbanked household have used a payday loan, compared with only 3.5% of all households.4 Percent of Households that Have Used Payday Loans 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 16.2% 6.6% Unbanked Underbanked All US Households* Source: FDIC, 2009 ° FDIC, 2009. National people's Action - January 2012 5 Payday loan customers are predominately lower or moderate income. A 2007 survey of payday loan users found that 95% of borrowers had a household income below the national average. Furthermore, 75% of borrowers had an annual household income of Tess $50,000, and one third had a household income below $25,000. Only 9% of payday loan borrowers had a household income over $75,000.5 Borrowers tend to be disproportionately female and research suggests single mothers make up a key segment of payday customers.6 African-American or Latino customers also make up a disproportionate number of payday loan users'. While the industry denies targeting people of color, the reality is that payday loans stores are highly concentrated in African-American and Latino neighborhoods.8 The consumer appeal of the payday loan is primarily that it offers individuals who may be cut off from mainstream credit sources virtually immediate access to cash. However, this quick access to cash comes at a high financial price to borrowers. Rather than perform meaningful underwriting as do most other lenders, payday lenders instead only verify a source of income for repayment. To offset potential loan defaults, the payday loan industry's business strategy is to charge very high borrowing fees and to encourage repeat borrowing in order to maximize profits. While the payday loan industry advertises the product as a sensible choice for a one time emergency financial need, the reality is that the average borrower takes out 9 payday loans per year in quick succession. Only a small fraction of the 17 to 19 million payday loan borrowers take out one loan per year, while a majority of payday loan customers are in effect longer-term borrowers who pay triple -digit interest rates on repeat loans for months at a time.9 An estimated 5% of all payday loans or 800,000 borrowers default on a payday loan every year and likely 5 Elliehausen, Gregory. "An Analysis of Consumers' Use of Payday Loans", Board of Governors of the Federal Reserve System, Division of Research and Statistics, January 2009. The medium household income in 2007 was $52,670 (U.S. Census). 6 Texas Appleseed,"Short-term Cash: Long-term Debt: The Impact of Unregulated Lending in Texas", April 2009. This survey of payday loan users in Texas cities found 59% of all borrowers were women and 40% of all borrowers were single women. . A 2007 national survey performed by Gregory Elliehausen found 23.3% of surveyed payday loan borrowers are unmarried with children, compared with 7.6% of all consumers being unmarried with children. ' Center for Responsible Lending, "Predatory Profiling", 2009. A survey of California borrowers found African-American and Latino payday loan borrowers made up 56% of all borrowers but only 31% of the total population. Also a survey of borrowers in Pima County Arizona found African-American, Latino, and Native American borrowers made up 60% of payday borrowers but 30% of the overall population. Texas Appleseed, "Short-term Cash: Long-term Debt",2009. A study in Texas found African-Americans using payday loans at twice the rate of Whites. National People's Action, "Credit Segregation: Concentrations of Predatory Lenders in Communities of Color ", February 2011. 9 Center for Responsible Lending, Parrish, Leslie and Uriah King, "Phantom Demand: Short-term due dates generates need for repeat payday loans, accounting of 76% of total volume", July 2009. This study of payday loans in Florida and Oklahoma found only 2% of borrowers took out only one payday loan over a 12 -month period. National People's Action - January 2012 6 end up in worse financial condition than before the taking out their loans.10 Perhaps not surprisingly, payday loans have been found to contribute to the likelihood of bankruptcy.11 lll. The Rise of Payday Lending and the Regulatory Response Explosive Growth in Payday Lending: 1990's -2000's The payday lending industry has experienced dramatic growth over the last two decades to reach an annual loan volume estimated at $40 Billion with over one hundred million payday loans issued every year.12 From the pawnshop to the loan shark, there have long been businesses catering to lending money at a high cost to the working poor. However, the growth of payday lending perhaps shares more in common with the now infamous subprime mortgage lending industry than with the neighborhood pawn shop. Like subprime mortgages, payday lending was virtually unheard of in the 1980's but emerged in a limited form as the declining real income of lower income workers created more American households dependent on credit to meet everyday expenses. By the mid 1990's more subprime finance businesses realized the profit potential of collecting an average of 20% on every dollar loaned out as a cash advance. The lure of inflated profits from credit -impaired borrowers eventually attracted the interest of Wall Street investors and the mainstream banks, whose deep -pockets financed the rapid nationwide growth of corporations specializing in high-cost cash advance loans. 10 Rivlin, Gary. Broke. USA: from Pawnshops to Poverty, Inc. HarperCollins, 2010. Rivlin estimates the default rate at 5% or one in twenty loans. Advance America reports a 3.3% charge-off rate as of December 2010, Source: SEC 10-K filing. If 5% of all payday loans default, this analysis assumes 5% of the total 17 Million borrowers, or 850,000 borrowers, will be in default annually. Because it is possible that a single payday loan borrower may default on multiple loans at, we discount the estimated total to 800,000 borrowers. ti Skiba, Paige and Jeremey Tobacman, "Do Payday Loans Cause Bankruptcy?" 2008. 12 Stephens Inc, an investment firm specializing in subprime finance, estimates $29.3 Billion in total storefront payday lending and $10.8 Billion in internet payday lending in 2010. The estimate of the annual number of payday loans is based on an average loan amount of $350 per transaction. Nalional People's Action - January 2012 7 The rise of payday lending was also enabled by a void in consumer protection laws and financial regulations. No federal regulation covered this new financial product. While ten states never authorized payday lending, most states' financial regulations did not specifically prohibit payday lending, and the industry quickly set up shop. In cases where state law limited payday lending, newly formed payday lending lobby groups poured millions of dollars to make the laws more accepting of this truly high-cost financial service.13 From an estimated 2,000 payday lender storefronts nationwide in 1996 to over 20,000 stores in 2003, in a mere seven years the retail presence of the industry increased tenfold. Stephens Inc., a leading subprime financial industry analyst, reports that storefront payday lending appears to have reached its peak around 2006-2007 with over 24,000 payday loan stores. Number of Payday Loan Stores Nationwide: 1996-2010 25,000 - 20,000 - 15,000 - 10,000 - 5,000 0 — cf) tic5 �000 ��ti �ooa ti000 tioo� 15) tio Source: Stephens, Inc. States Crackdown on Legalized Usury: 2007-2011 The recent decline in the number of payday loan stores is largely due to some states prohibiting triple - digit interest rates on payday loans. Since 2007 there has been a significant trend toward increased 13 Rivlin, Gary. Broke, USA: from Pawnshops to Poverty, Inc. HarperCollins, 2010 National People's Action - January 2012 8 regulatory pressure on payday lending in numerous states. Arizona, Arkansas, Colorado, Montana, New Hampshire, Ohio, and Oregon together were once home to over 3,400 payday loan shops issuing over $3 Billion in payday loans annually. Since 2007, these seven states have limited small -dollar loan interest rates between 17% and 45% APR, effectively ending or severely limiting payday lending. An industry estimate reports that in 2010 there were approximately 19,700 payday stores nationwide which issued $29.3 Billion in cash advance loans. Even with the recent reduction in payday lending stores, the industry is still widespread and pervasive in 33 states. While now limited to two thirds of the country, there are still more payday loan stores in the United States than McDonald's restaurants.14 As the most recent data from the industry and state regulators show, the payday loan industry is thriving and highly profitable where it is allowed to operate. The states with the greatest concentration of payday lenders per capita (based on adult population) are: Mississippi, Alabama, Louisiana, South Dakota, Tennessee, and Missouri. Not surprisingly, these states have the most lenient regulations limiting the payday lending and their residents pay relatively more in payday lending fees compared with other areas of the country.ls While the payday loan industry includes both large and small businesses, the industry is dominated by 15 Targe corporations which together operate 9,750 payday loan stores or roughly half of the nation's payday lending stores.16 Of these 15 major payday lenders, six are publicly -traded companies: Advance America, Cash America, Dollar Financial, EZ Corp, First Cash Financial, and QC Holdings. Collectively these six corporations at the end of 2010 operated an estimated 4,500 payday loan stores in 33 states nationwide, or approximately 23% of all payday loan stores nationwide. The six publicly -traded payday lenders are of particular interest as their performance collectively offers detailed insight into overall trends in the U.S. payday loan industry and the business practices of the industry's market leaders. 14 There are a reported 18,750 McDonald's restaurants nationwide. 16 See report methodology and notes on pages 19-21 for more details. 16 See SEC.gov for annual 10-K filings for individual store counts, total payday industry total is based an a Stephens Inc. estimate of 19,700 total stores at year-end 2010. National People's Action - January 2012 9 Payday Lending Revenues During the Great Recession Four years into the nation's economic crisis, annual revenues for the country's publicly -traded payday loan companies have risen to their highest level on record. Annual filings show that the nation's major payday lenders collectively earn more from their high-cost cash advances than before the financial crisis. From 2007 to 2010 their combined revenues from payday lending have increased 2.6%, or some $30 Million in annual revenues. Together the six largest finance companies offering payday loans (Advance America, Cash America, Dollar Financial, EZ Corp, First Cash Financial, QC Holdings) reported $1.48 Billion in revenues in 2010, up from $1.45 Billion in 2007. Revenue from Payday Loan Fees for Six Major Payday Lenders (thousands $US) 1,600,000 - 1,400,000 1,200,000 1,000,000 - 800,000 600,000 - 400,000 200,000 0 2007 2008 2009 2010 o First Cash Financial Services ❑ Dollar Financial ❑ QC Holdings ❑ EZ Corp ❑ Cash America International ® Advance America The overall increase in revenues earned by the publicly -traded lenders occurred despite a small overall decline in the total volume of payday loans originated by these companies in recent years. From 2007 to 2010, the combined payday loan volume for these six major payday lenders decreased less than one percent (0.8%) over the course of recent financial crisis.17 However, compared to other areas of 17 For the six publicly -traded payday lending companies, their collective payday loan volume reached its high point in 2008 with $10.15 Billion in payday loan originations. The business trends do however vary among the individual companies: the nation's National People's Action - January 2012 10 consumer credit and in contrast to subprime mortgage Iending18, payday lending has largely maintained its overall market presence and profitability during the country's recent financial troubles —despite major regulatory crackdowns in several states. Although some of the recent decline may be attributed to economic conditions and rising unemployment, the primary reason for the declines in payday lending have been attributed to individual states' efforts to tighten payday lending regulations or imposing interest rate caps.19 Regulation notwithstanding, the business of lending small dollar amounts to desperate borrowers at a high cost appears to be at least recession -resistant, if not recession proof. Big Bank Funding of Payday Loan industry Continues Unlike some areas of the economy, the major payday lenders have continued to access hundreds of millions of dollars in credit lines from the nation's big banks, which in turn have been given virtually free and practically unlimited access to capital from the Federal Reserve Bank. As previous research has shown, virtually all of the major payday lenders, companies that comprise nearly half of the payday industry, receive their credit from the nation's largest banks, in particular: Wells Fargo, JPMorgan Chase, US Bank and Bank of America.20 By investing in triple -digit payday lending, arguably the small -dollar financial product that carries the most cost and risk to consumers, the big banks willingly display a callous disregard for their own corporate promises to promote the financial well-being of "communities". As recently as December 2011, Wells Fargo, US Bank, and Bank of America together renewed their $300 Million line of credit to the biggest payday lender in the country: Advance America. The nation's largest payday lenders continue to borrow funds from the bailed -out, "Too -Big -To -Fail" banks at rates around 2.5% APR, which they in turn lend out as payday loans charging between 260% and 570% APR depending on the maximum allowed under state law. largest payday lender, Advance America, saw a 14% reduction is loan volume after exiting some states due to tighten regulations, Cash America on the other hand saw 36.8% growth in payday lending due in part to a focus on online payday lending. 18 According to the Board of Governors of the Federal Reserve System, Americans' total credit card debt has declined by 15.8% and American's mortgage debt has decreased by some 7.4% between 2007 and 2011. 19 SEC 10-K filings for Advance America. The publically traded payday lending companies all name regulation first in their list of potential threats to business activity. ° National People's Action and Public Accountability Initiative, "The Predators' Creditors: How the Biggest Banks Are Bankrolling the Payday Loan Industry", 2010. National People's Action - January 2012 11 A detailed examination of payday lending on the state level reveals that the big bank -funded payday lenders compose a significant proportion, and in some cases, the majority of the payday lending industry in a state. Percentage of Payday Lenders Financed by Major National Banks: Virginia, Iowa, Illinois, and Nevada State Number of Payday Loan Stores Licenced in State % of Payday Loan Stores Funded by Big Banks Virginia 276 57.9% Iowa 220 47.3% Illinois 564 41.5% Nevada 430 30.9% State Average 42.3% Source:State regulators, SEC Based on a sample of states, the percentage of payday lenders that are funded by the nation's largest banks ranges from approximately 31% in Nevada to 58% in Virginia. Based on this four state sample, over 42% of all payday lending in a state on average is funded by Wells Fargo, JP Morgan Chase, Bank of America, US Bank or PNC Bank. This percentage of payday lenders funded by the big banks may increase as the publicly -traded and other large payday companies backed by the mainstream bank industry buy out the smaller "mom and pop" payday lending companies. Nasional People's Action - January 2012 12 IV. The Annual Cost of Payday Lending: 3.5 Billion in High Fees for Small Dollar Loans Every year the estimated 17 Million payday loan borrowers pay billions of dollars in fees as the price to access a relatively small cash advance on their next pay check. The most recent data provided by state regulators shows that payday loans cost borrowers no less than $3.4 Billion per year in loan fee payments. This figure is considered a conservative, baseline estimate as it is based on payday loan fee data reported by state regulatory agencies, which in turn is derived from the loan volumes self-reported by the payday loan industry.21 In many cases, online payday loans and other lending activity may be unreported or underreported.' The $3.4 Billion cost estimate does not rule out that the actual price of payday loan fees may be considerably higher, as other studies have estimated the consumer cost of payday lending to be $4.5 Billion per year or more.23 The nearly three and half billion dollars in payday loan fees are paid in seemingly small but nonetheless costly finance charges by desperate borrowers every year. A borrower who only takes out one loan per year, which research shows represent only on average 15% of all payday loan customers24, might pay approximately $55 in fees per year. However, the average payday borrower who takes out an estimated nine loans per year will pay an estimated $500 per year in loan fees - in addition to the original loan principal. The one third of payday loan borrowers that are heavily indebted and take out 12 or more loans per year25 can pay $1,000 to $2,000 annually in payday loan fees.26 With the average borrower's annual household income of $35,000, this means that over 5% of the entire annual income of a repeat payday loan borrower can be siphoned off as profits for the country's high -interest, small -dollar lenders. 21 In cases where a state does not report loan payday loan volumes, this report estimates loan volume based on the number of license store locations in the state. See Report Methodology on page 19 for more details. 22 According to Stephens, Inc., one forth of the payday loan industry is now online. 23 The Center for Responsible Lending has estimated the cost of payday fees at $4.5 Billion per year. Stephens Inc. has estimated revenues from both storefront and online payday lending at approximately $7.4 Billion. 24 Center for Responsible Lending, "Payday Loans, Inc.: Short on Credit, Long on Debt", Uriah King, Leslie Parish, 2011. This study finds 15% of payday loan borrowers in Oklahoma payday took out only one loan during a two year period. Similarly, in the state of Florida, only 14% of payday borrowers took out one loan within a year. See "Florida Trends in Deferred Presentment", Veritec Solutions LLC, May 2010 25 "Florida Trends in Deferred Presentment", Veritec Solutions LLC, May 2010. In Florida 32.4% of borrowers took out 12 or more loans from June 2009 to May 2010, accounting for 62.7% of all payday loans issued in the state. zs Rivlin, Gary. Broke, USA: from Pawnshops to Povertv, Inc. HarperCollins, 2010. p 32-33: Industry consultants advise payday lenders in marketing approaches to encourage repeat borrowing claiming that such loyal customers can pay from $2,000-$4,000 per year in fees. Nalional People's Aclion January 2012 13 Payday Lending Excessive Fees = $3.1 Billion in Wealth -Stripping from Financially -Troubled Borrowers An estimated $3.1 Billion dollars of wealth is "stripped" every year from payday borrowers to pay high- cost cash advance fees. If a 36% annualized interest rate (APR) rate was enacted on small dollar loans in the 33 states with triple -digit interest rate payday lending, the current volume of storefront payday lending would generate an estimated $300 Million in loan fees annually. Compared to the actual amount paid annually in fees for high-cost payday lending ($3.4 Billion) borrowers nationwide ever year pay a minimum of $3.1 Billion more in fees than they would under a 36% interest rate cap scenario. This $3.1 Billion is real income "stripped" from millions financially -strapped borrowers and it represents a direct drain of wealth from low and moderate -income citizens into the profit margins of money lenders. National People's Action - January 2012 14 Annual Amount of Payday Loan Annual Fees and "Wealth -Stripping" by State27 State Number of Licenced Payday Lenders (2011) Payday Loan APR Charged Annual Fees from Payday Loans Estimated Wealth - Stripping from Fees Alaska 32 520% $6,618,225 $6,154,949 Alabama 1,067 455/° $238,102,472 $219,054,274 California 2,123 414% $468,794,874 $425,040,685 Delaware 144 417% $20,806,978 $18,986,367 Florida 1,450 281% $270,963,000 $235,543,000 Iowa 220 301% $40,966,843 $36,463,845 Hawaii 35 460% $3,400,000 $3,132,600 Idaho 226 443% $37,060,000 $34,465,800 • Illinois 564 328% $17,935,836 $16,307,026 Indiana 414 391% $61,102,224 $54,521,984 Kansas 311 391% $63,300,000 $57,392,000 Kentucky 579 459% f $108,897,100 $99,632,470 Louisiana 942 560% $287,000,000 $266,910,000 Michigan 651 417% $131,794,558 $118,693,358 Missouri 975 445% $127,453,500 $116,990,309 Minnesota 100 196% $14,166,667 $12,844,444 Mississippi 938 574% $267,009,242 $250,017,745 North Dakota 69 502% $7,365,784 $6,845,031 Nebraska 111 460% $35,928,682 $33,361,882 Nevada 430 521% $109,681,159 $102,003,478 New Mexico 215 346% $4,493,921 $4,076,721 Oklahoma 356 358% $51,645,580 $46,277,035 Rhode Island 25 260% $1,660,000 $1,427,600 South Carolina 418* 390% $62,640,000 $56,793,600 South Dakota 156 427% 9 $17,058,601 $14,274,927 Tennessee 1,205 380% $186,051,972 $171,294,308 Texas 2,540 417% $446,265,300 $407,088,457 Utah 270* 443% $76,315,789 $70,015,789 Virginia 276 290% $20,444,811 $18,058,511 Washington 244 390% $65,116,761 $59,039,197 Wisconsin 436 574% $96,800,000 $90,024,000 Wyoming 90 521% $19,377,864 $18,021,414 US Totals 17,630 $3,366,217,743 $3,070,752,807 Sources: State Financial Regulatory Agencies, Center for Responsible Lending, Consumer Federation of America:2008-2011 27 See report methodology for details, pages 19- 21. National People's Anlion - January 2012 15 Major Bank Finance Payday Lending Responsible for $1.3 Billion in Wealth -Stripping The nation's major banks provide the primary funding for no fewer than 11 of the 15 major payday lenders which in total comprise more than 40% of the payday lending industry.28 The payday lenders funded by the major banks collect approximately more than $1.5 Billion in loan fees annually. Charging interest rates that average 390% APR, the big bank -funded segment of the industry generates $1.28 Billion in fees in excess of the amount that would be charged under a 36% interest rate cap scenario. This nearly $1.3 Billion represents a direct amount of income transferred from payday loan borrowers into the revenue columns of the money lenders, who admit they are the only option for these needy borrowers. Big Bank Funded Payday Lenders Major Payday Lender Major Bank Funders Number of Payday Stores Ace Cash Express Wells Fargo General Electric Capital 1,200 Advance America Cash Advance Bank of America Wells Fargo US Bank 2,313 American Payday Loans 21 Cash America International Wells Fargo JPMorgan Chase US Bank 655 Check Into Cash Wells Fargo 1,100 Check N' Go (Great Lakes Specialty Finance) Wells Fargo 1,000 Dollar Financial Group Inc. / Money Mart Wells Fargo 312 EZCorp Inc Wells Fargo US Bank 450 First Cash Financial Services (Cash & Go) JP Morgan Chase Wells Fargo 226 MoneyTree Bank of America 70 QC Holdings Inc. US Bancorp 523 Total Stores All Major Payday Lenders: 7,849 28 Estimated by share of total U.S. store locations. National Peoples Action - January 2012 16 The Future of Payday Lending: Mainstream Banks and Online Lenders It is likely that payday lending will face continued regulatory pressures. The usurious and too often predatory practices of the payday loan industry are increasingly questioned by state legislatures and their voters. Missouri, a state with one of the highest concentrations of payday lenders, will put the future of payday lending before voters with a 2012 ballot initiative seeking a 36% rate cap. The payday loan industry in turn will seek regulatory loopholes and may evolve away from a predominately storefront model.29 Online payday lending will likely increase its market share and will take away more business from the storefront lenders.30 Perhaps the most important development has been the entry of mainstream bank lenders into the payday loan market, with major banks including US Bank, Wells Fargo, and Fifth Third Bank offering comparable triple digit interest rate cash advance loans to their account holders. As this practice takes hold, banks that offer payday loans have the potential to reach millions of new borrowers regardless of any state regulations that limit storefront payday lenders. A 36% interest Rate Cap Would Mean a More Responsible Approach to Small Dollar Lending When a 36% interest rate cap is imposed, as it has been in 17 states and the District of Columbia31, the payday lending industry is dramatically altered. The current payday lending business model is dependent on high-cost, high-volume, repeat borrowing. Payday lenders typically cease operations in the state when significant interest rate limits on small loans become the law of the land. This report acknowledges that current payday loan volumes would not continue under a 36% interest rate cap scenario. A real need for small dollar credit exists - although not at the inflated level that current payday loan volumes would suggest32. As consumer advocates have argued and recent experience in states such as North Carolina have demonstrated, only when the usurious and predatory practices of payday lending are contained can more consumer -friendly small dollar loans alternatives be developed. 29 Therefore the number of payday stores may become a less important indicator of the size and scope of the payday loan industry. 3D Stephens, Inc. st The seventeen states with small -dollar loan rate caps range from a 17% annual interest rate maximum in Arkansas to a 60% annual interest rate limit in Georgia. 32 Center for Responsible Lending, 'Phantom Demand", 2009. A reduction in the demand for payday loans would likely occur as analysis has shown that approximately 76% of all payday loans are issued solely for the purpose of paying a previous payday loan. Observers of the industry have long pointed to practices that create demand by up -selling and encouraging repeat borrowing. National People's Action - January 2012 17 V. Policy Recommendations Consumers, voters and state legislatures are in agreement that the current practices of the payday loan industry must be reined in. The real need for responsible small -dollar credit cannot be adequately addressed as long as usurious and predatory products continue to dominate the marketplace. The success of state laws in driving out predatory lenders and reducing the cost of small -dollar credit is an encouraging sign. However, the emergence of nationally chartered bank institutions entering the market of high-cost payday loans demonstrates the need for both strong state and federal efforts. National People's Action calls for: 1. States and localities to enact strict interest rate caps of 36% or less and to close licensing and other loopholes that allow payday predators to evade the law; 2. Banking regulators, chiefly the Office of the Comptroller of the Currency and the Federal Reserve Board, to clearly identify payday lending and other high cost short-term lending as fundamentally unsafe and unsound practices given the reputational risk to banks and their harm to the communities. Regulators should bar banks from investing and participating in these schemes outright; 3. The Consumer Financial Protection Bureau (CFPB) to use its research and reporting mandate to shed Tight on the entire small dollar loan industry's practices by implementing, collecting, and making public loan level data from all consumer credit transactions; and, 4. The CFPB to exercise its authority to regulate the industry by restricting the most abusive practices, including: o Place restrictions on fees and penalties that are implemented to evade state -level interest rate laws; o Disallow the use of Disability, Social Security or unemployment insurance checks as loan collateral; o Tightly restrict the number of loans allowed per household in a period of time to end loan 'churning'; o Lengthen the minimum loan terms (60 days or more) and require equal loan payments with no balloon payments, and; o Require ability -to -pay and underwriting standards to all loans All of the above measures will have a positive impact on families and communities, preserving wealth and incomes in areas hardest hit by hard economic times. However, it is clear that there is a need for a comprehensive solution that a 36% interest rate cap on all credit transactions can bring. Congress must stand up in the face of Wall Street lobbying and bring back the usury laws that served our country well in the past. National People's Action - January 2012 18 Vl. Report Data and Methodology The table below contains the data used for payday loan volume and fees estimates in this report. Payday Loan Stores, Annual Loan Volumes, Estimated Fee Income, and Loan Average Rates Charged by States Cobra A Con B Colum C edam E Caber F Coban G C,plum, II Cctum, l Warn J Stale Number of Licenced Payday Lenders (2011) Annual Payday Loan Volume Annual Fees from Payday Loans Estimated Wealth- Stripping from Fees Fee per $100 as % Avg Loan Amount Avg FeeAPR Charged per Avg Loan Charged (vigor Max) Reporting Year of Dela Loan Volume Data Source Alaska 32 $33,091,124 $6,616225 $6,154,949 20.0% 5429 385.73 520% 2010 State Regulator Alabama 1,067 $1,360,585,555 $238,102,472 $219,054,274 17.5% 5350 $52.13 455% 2007 ca. California 2,123 $3,125,299,157 $468,794,874 $425,040,685 15.0% $258 $33.65 414% 2010 State Regulator Delaware 144 $130,043,610 $20,806,978 $16,986,367 16.0% 3350 556.00 41755 2008 CFL Florida 1,450 $2,530,000,000 $270,983,000 $235,543,000 10.7% $386 341.28 281% 2009-2010 State Regutala!Verne. Iowa 220 $321,642,690 $40,966,843 336,463,845 12.7% 5348 $41.76 301% 2010 State R.eguulor Hawall 35 $19,100,000 f $3,400,000 $3,132,600 17.7% 5350 561.78 460% 2011 Gnaw Search Idaho 226 $185,300,000 $37,060,000 $34,465,800 20.0% 5350 570.00 443% 2010 State Regulate.' Illinois 564 3116,343,559 817,935,836 $16,307,026 15.4% 5370 557.02 32055 2008 State Regulator Indiana 414 $470,017,105 $61,102,224 $54,521,984 13.0% $315 $36.24 391% 2008 cal Kansas 311 $422,000,000 $63,300,000 $57,392,000 15.0% $367 $47.82 391% 2009 State Regulator Kentucky 579 $661,759,300 , $108,897,100 $99,632,470 16.5% $314 $51.61 459% 2010 Stale Reg teeter Louldana 942 $1,435,000,000 $287,000,000 $266,910,000 20.0% 5350 558.33 560% 2008 Mosby Estimate Michigan 651 $935,800,000 $131,794,558 $118,693,358 13.355 6402 553.36 417% 2007 Slate Regul8u, Missouri 975 $747,370,800 $127,453,500 $116,990,309 17.1% 5308 $52.45 445% 2010 state Regulator Minnesota 100 $94,444,444 $14,166,667 $12,844,444 15,0% 5331 549.65 196% 2008 crag Mississippi 936 31,213,678,373 3267,009,242 $250,017,745 22.0% 5350 377.00 574% 2008 cal North Dakota 69 $37,196,696 $7,365,784 36,845,031 19.6% $305 $59.91 502% 2009 Siete Reptant Nebraska 111 $183,342,856 335,928,682 $33,361,882 17.7% 5350 $52.50 460% 2009 Sate 60001,1e, Nevada 430 3548,405,797 $109,681,159 $102,003,478 20.0% 3350 970.00 52155 2008 C08. New Mexico 215 329,800,050 $4,493,921 $4,076,721 15.1% 8373 $56.12 346% 2010 State Regulator Oklahoma 356 3383,467,502 351,645,580 346,277,035 13.5% $389 $52.09 358% 2010 sate 6e600la1 Verne° Rhode island 25 $16,600,000 $1,660,000 $1,427,600 10.0% 3350 535.00 260'/ 2008 CPL South Carolina 418' $417,600,000 362,640,000 $56,793,600 15.0% 5241 531.43 390% 2000 cru. South Dakota 156 $198,633,898 317,058,601 $14,274,927 15.0% $300 539.13 427% 2008 CRL Tennessee 1,205 31,054,118,820 $186,051,972 3171,294,308 17.7% $202 $35.65 380% 2009 ante Fle9matotr Vernet Texas 2,540 $2,798,345,940 $446,265,300 $407,068,457 15.0% 6533 $85.00 417% 2010 Other Constar.AdvadaiCRL Utah 270' $450,000,000 $76,315,789 $70,015,789 17.0% $342 558.00 443% 2008 cal Virginia 276 $170,450,000 $20,444,811 $18,058,511 12.0% $371 $44.50 290% 2009 Siete ReguuIetRl Washington 244 $434,111,743 $65,116,761 $59,039,197 15.0% 6396 $51.65 390% 2010 Slate Regulator Wlscondn 436 $484,000,000 396,800,000 $90,024,000 20.0% $416 569.33 574% 2010 State Regolatot Wyoming 90 $96,889,320 $19,377,864 $18,021,414 20.0% 3350 $58.33 521% 2010 Stele Regdator US Totals 17,630 $21,104,638,290 .$3,366,217,743 $3,070,762,807 Report methodology: Column A reports the number of active or current licensed payday loan stores in each state as reported by the respective state financial regulatory department between November 2011 and January 2012. Overall, this report counted and/or estimated 17,630 payday loan stores nationwide, which may represent an undercounting of store locations by some 11% compared to an industry estimate of 19,700 store location at year end 2010. Every effort was made to identify only business offering payday loan companies as opposed to other businesses such as check cashers and auto title lenders. Also, every effort was made to report the total number of store locations, including Internet payday lenders which were reported as one store per licensee in this report. However, due to the discrepancies of payday loan licensing from state to state, in some cases the number of payday loan stores reported here can be considered a best -available and conservative figure. For the state of Texas, the total number of payday loan stores is an estimate based on National People's Acllon - January 2012 19 75% of the total number of Credit Service Organizations (CSOs). Texas Secretary of State reported 3,386 CSOs as of Dec. 2012 and the consumer advocate organization Stop Payday Abuse estimates 75% of all CSOs in Texas are involved in payday lending. The number of businesses engaged in payday lending in Virginia is likely considerably higher than reported here as many businesses now operate as open-end lenders and are not readily disclosed. For the states of Hawaii and Rhode Island, the number of payday lenders was estimated by an online internet search. Column B reports the total payday loan volume ($US) as either reported by the state regulatory agency or estimated based on the number of payday store locations. The annual loan volume or similar loan data, such as the annual number of payday loans and average loan size, was made available by the state regulator for 20 states and was included in this report. For 12 such states, this information was not readily available and this analysis instead relied on estimates of annual loan volume conducted by the Center for Responsible Lending (CRL) from 2008-2010 as reported online at: htta://www.resoonsiblelendina.ora/mortgage-lendina/tools-resources/facisheets/ This analysis adjusted CRL's annual reported payday loan volume according to the observed percentage change in the number payday loan stores in a state. For example, if the number of payday loans stores reported in this report was 10% less than the number of stores reported previously by CRL (updated in 2010) then the annual loan volume was decreased by 10% and included in this report. For the state of Louisiana, this analysis relies on a 2008 annual estimate of $4.1 million payday loans issued, provided by a payday loan company executive. Column C reports the estimated annual dollar amount of fees paid for payday loans in a state. In all cases when this figure was disclosed by a regulator or other sources it was reported and used in this analysis. In cases where this figure was not available, the amount of payday loan fees was estimated by multiplying the annual loan volume by the loan fee per $100 expressed a percent (Column B x Column E) Column D is an entirely calculated column that includes the estimated amount charged by a hypothetical 36% APR limit on payday loans. This is derived by subtracting the estimated annual dollar amount of fees paid (Column C) by the amount obtained from multiplying the total annual payday loan volume (Column b) by 1.4%. This report calculates that a 36% APR $100 payday loan with an assumed 14 day loan term, would charge only approximately $1.40 in loans fees —hence a 1.4% fee per $100 borrowed. Column E is the fee per $100 charged on a payday loan, expressed as a percent. This figure is reported or derived from state regulator data when available. In cases where regulator data was not readily available, this analysis relied both on the reported information made available by the Center for Responsible Lending (see link above) and by the National Consumer Federation (NCF), available online at: http://www.gavdavloaninfo.org/state-information Column F is the average payday loan size including fees as reported by the state regulator. In cases where such information was not available, an average loan size of $350 was used in this analysis (denoted by blue italics). Column G is the average payday loan fee charged per loan, based on the average loan size. In cases where such information was reported by a state regulator, it was included in this analysis. In all other cases it was either derived using the average loan APR and the average loan size (Columns F and H). Figures from the CRL and NCF were used extensively here (see websites above). Column H is the average interest rate (APR) charge on a typical payday loan in the state. In cases where the average payday loan APR was reported by a state regulator, it was included in this analysis. In all other cases it was either derived using the average loan amount and finance fees per $100, or using the average or the Nalional People's Action - January 2012 20 maximum APR as reporting by CRL and NCF (see websites above). In some cases, the APR reported used here may not be the average payday loan rate but instead the maximum interest rate allowed. However, as the maximum payday loan interest rate is capped in many states, there is often little difference between the maximum APR and the average APR and such differences are not accounted for in this analysis. Column I is the year of reporting data used for each state. In all cases, this analysis used the most recent data readily available with the 2010 data used for 12 states, and 2009 used for 5 states. Column J is the source of loan volume and interest rate data. State regulator data was used whenever it was available. National People's Action - January 2012 21 CFSA > About the Payday Advance Industry > Myth vs Reality Page 1 of 2 Home About the Payday Advance Industry Myth vs Reality Myth vs. Reality CFSA helps separate fact from fiction with a straightforward and honest examination of a payday advance and the short-term lending industry. Myth: Payday loans are extremely expensive and have exorbitant interest rates. Myth: Payday loans trap borrowers in a never-ending "cycle of debt." Reality: Numerous studies corroborate a public policy analysis from Clemson University that concludes, "There is no statistical evidence to support the 'cycle of debt' argument often used in passing legislation against payday lending." A 2010 survey by the American Payroll Association found that 71.6 percent of American employees are living paycheck to paycheck, a situation in which a family may be unable to absorb unexpected expenses without short-term loans. The vast majority of Americans, undeniably, use payday advances responsibly and, as intended, for short-term use. State regulator reports and public company filings confirms that more than 90 percent of payday advances are repaid when due and more than 95 percent are ultimately collected. States' law and CFSA Best Practices limit the number of times a customer can be in a loan. In most of the 32 states that allow payday lending, rollovers or loan extensions are either limited or prohibited. In states without limits, CFSA members limit the number of rollovers to four. Should a customer of a CFSA member company have difficulty paying back a loan when due, for whatever reason, he or she may enter into an Extended Payment Plan, a provision of the CFSA's Best Practices, that allows the loan to be repaid over a period of additional weeks. This option is provided to customers for any reason and at no additional cost to the borrower. Myth: Payday lenders target poor people and minorities. Myth: Payday lenders do not want to be regulated. Myth: Payday lenders' high fees help the industry make billions in profits. Myth: Payday lenders loan money to people who cannot afford to pay it back. Myth: Payday lenders use coercive collection practices. Myth: Payday lending has grown dramatically because of aggressive marketing. Myth: Payday lenders hide fees and mislead consumers. Myth: Anti -payday lending activists have consumers' best interest in mind. http://cfsaa.com/about-the-payday-advance-industry/myth-vs-reality.aspx 01/02/2014 CFSA > About the Payday Advance Industry > Myth vs Reality Page 2 of 2 Myth: Consumers benefit if payday lenders are regulated out of business. Myth: People use payday loans frivolously and end up in a cycle of debt. Myth: Payday loans reduce the "welfare" of customers. Myth: Payday loans impact the larger economy and were partly responsible for the financial crisis. Myth: Banks and credit unions can offer small dollar, short-term loans cheaper. http://cfsaa.com/about-the-payday-advance-industry/myth-vs-reality.aspx 01/02/2014 CFSA > About the Payday Advance Industry > Myth vs Reality Page 1 of 2 Home About the Payday Advance Industry Myth vs Reality Myth vs. Rea I ity CFSA helps separate fact from fiction with a straightforward and honest examination of a payday advance and the short-term lending industry. Myth: Payday loans are extremely expensive and have exorbitant interest rates. Myth: Payday loans trap borrowers in a never-ending "cycle of debt." Myth: Payday lenders target poor people and minorities. Reality: While critics of the industry assign labels to payday advance customers in an attempt to further their political agenda, the fact is that CFSA members provide services to a broad cross section of Americans because there is widespread demand. Just like Home Depot and Costco, payday advance stores are located in population centers that are convenient for where customers live, work, and shop. Increasingly, banks and credit unions are not serving the financial needs of communities. In an effort to identify and quantify the extent to which insured banks outreach, serve, and meet the banking needs of unbanked and underbanked households, a 2009 FDIC survey looked at the basic banking and other financial services currently offered. The survey found that while banks are aware of significant unbanked and underbanked populations in their market areas, the efforts to serve those customers have been minimal. According to the survey, "73 percent of banks are aware that significant unbanked and/or underbanked populations are in their market areas, but Tess than 18 percent of banks identify expanding services to unbanked and/or underbanked individuals as a priority in their business strategy.[1]" Payday advance customers are typical hardworking adults who may not have savings or disposable income to use as a safety net when unexpected expenses occur. Importantly, an analysis of consumers' use of payday loans found that 88 percent of customers were satisfied with their last advance. Here are the facts: 41 percent of payday loan customers earn between $25,000 and $50,000 annually; 39 percent report incomes of $40,000 or more; 53 percent are under 45 years of age; 63 percent have children at home; only 9 percent are 65 or older; 90 percent have a high school diploma or better, with 54 percent having some college or a degree; 85 percent use other forms of credit; 54 percent have major credit cards; 100 percent have steady incomes and active checking accounts, both of which are required to receive a payday loan or advance.[2] http://cfsaa.com/about-the-payday-advance-industry/myth-vs-reality.aspx 01/02/2014 CFSA > About the Payday Advance Industry > Myth vs Reality Page 2 of 2 [1]FDIC Survey of Banks' Efforts to Serve the Unbanked and Underbanked: Executive Summary of Survey Findings and Recommendations, February, 2009 - PDF [2] George Washington University School of Business, Gregory Elliehausen. An Analysis of Consumers' Use of Payday Loans; January 2009. Myth: Payday lenders do not want to be regulated. Myth: Payday lenders' high fees help the industry make billions in profits. Myth: Payday lenders loan money to people who cannot afford to pay it back. Myth: Payday lenders use coercive collection practices. Myth: Payday lending has grown dramatically because of aggressive marketing. Myth: Payday lenders hide fees and mislead consumers. Myth: Anti -payday lending activists have consumers' best interest in mind. Myth: Consumers benefit if payday lenders are regulated out of business. Myth: People use payday loans frivolously and end up in a cycle of debt. Myth: Payday loans reduce the "welfare" of customers. Myth: Payday loans impact the larger economy and were partly responsible for the financial crisis. Myth: Banks and credit unions can offer small dollar, short-term loans cheaper. http://cfsaa.com/about-the-payday-advance-industry/myth-vs-reality.aspx 01/02/2014 CFSA > About the Payday Advance Industry > Myth vs Reality Page 1 of 2 Horne About the Payday Advance Industry Myth vs Reality Myth vs. Reality CFSA helps separate fact from fiction with a straightforward and honest examination of a payday advance and the short-term lending industry. Myth: Payday loans are extremely expensive and have exorbitant interest rates. Myth: Payday loans trap borrowers in a never-ending "cycle of debt." Myth: Payday lenders target poor people and minorities. Myth: Payday lenders do not want to be regulated. Myth: Payday lenders' high fees help the industry make billions in profits. Reality: Small dollar, short-term loans are expensive to originate and maintain, which is one reason most banks no longer offer the product. A 1999 Federal Reserve Report found that, regardless the size of a loan, it cost banks $174 to originate a loan application. An article published in the Fordham Journal of Corporate & Financial Law concludes that payday lending fees do not deliver high profits to lenders and supports the position that payday advance fees are in line with the high costs of operating a payday loan business. In fact, on average, the nation's five publicly traded payday lending companies earn a 6.6 percent profit on their income. A September 2009 independent analysis by Ernst & Young, LLP found that "on a pre-tax and pre - interest basis, multi -line payday advance lenders earn an average profit of $1.37 per $100 of loan principal issued — that represents a modest margin of 9.1 percent, before taxes. Industry critics fail to recognize that, in addition to the cost of administering the loan, payday lenders incur the normal overhead costs of running a business. The fact is that the pricing structure of for-profit payday lending is reasonable and justified based on the costs to deliver the service. A proof point of this is that Goodwill, a nonprofit, tax-exempt charity offers payday loans, charges customers $9.90 per $100 borrowed (252 percent APR) for their "Good Money" payday loan. And this is only to break even. For-profit payday lenders typically charge an average of $15 per $100 borrowed while also paying taxes, employee salaries and health care, rent, and overhead costs. Myth: Payday lenders loan money to people who cannot afford to pay it back. Myth: Payday lenders use coercive collection practices. Myth: Payday lending has grown dramatically because of aggressive marketing. Myth: Payday lenders hide fees and mislead consumers. http://cfsaa.com/about-the-payday-advance-industry/myth-vs-reality.aspx 01/02/2014 CFSA > About the Payday Advance Industry > Myth vs Reality Page 2 of 2 Myth: Anti -payday lending activists have consumers' best interest in mind. Myth: Consumers benefit if payday lenders are regulated out of business. Myth: People use payday loans frivolously and end up in a cycle of debt. Myth: Payday loans reduce the "welfare" of customers. Myth: Payday loans impact the larger economy and were partly responsible for the financial crisis. Myth: Banks and credit unions can offer small dollar, short-term loans cheaper. http://cfsaa.com/about-the-payday-advance-industry/myth-vs-reality.aspx 01/02/2014 CFSA > About the Payday Advance Industry > Myth vs Reality Page 1 of 2 Horne About the Payday Advance Industry • Myth vs Reality Myth vs. Reality CFSA helps separate fact from fiction with a straightforward and honest examination of a payday advance and the short-term lending industry. Myth: Payday loans are extremely expensive and have exorbitant interest rates. Myth: Payday loans trap borrowers in a never-ending "cycle of debt." Myth: Payday lenders target poor people and minorities. Myth: Payday lenders do not want to be regulated. Myth: Payday lenders' high fees help the industry make billions in profits. Myth: Payday lenders loan money to people who cannot afford to pay it back. Reality: All reputable payday lenders have underwriting criteria, in addition to the requirements of a steady income and checking account. Ninety-five percent of payday loans are repaid when due, a fact confirmed by numerous state regulatory reports. It simply would not make good business sense to loan money to people who can't pay it back. Under CFSA's Best Practices, a customer who cannot pay back a loan when due has the option of entering into an Extended Payment Plan, allowing the loan to be repaid over a period of additional weeks. This option is provided to customers for any reason and at no additional cost to the borrower. Myth: Payday lenders use coercive collection practices. Myth: Payday lending has grown dramatically because of aggressive marketing. Myth: Payday lenders hide fees and mislead consumers. Myth: Anti -payday lending activists have consumers' best interest in mind. Myth: Consumers benefit if payday lenders are regulated out of business. Myth: People use payday loans frivolously and end up in a cycle of debt. Myth: Payday loans reduce the "welfare" of customers. Myth: Payday loans impact the larger economy and were partly responsible for the financial crisis. http://cfsaa.com/about-the-payday-advance-industry/myth-vs-reality.aspx 01/02/2014 CFSA > About the Payday Advance Industry > Myth vs Reality Page 2 of 2 Myth: Banks and credit unions can offer small dollar, short-term loans cheaper. http://cfsaa.com/about-the-payday-advance-industry/myth-vs-reality.aspx 01/02/2014 CFSA > About the Payday Advance Industry > Myth vs Reality Page 1 of 2 Home About the Payday Advance Industry Myth vs Reality Myth vs. Reality CFSA helps separate fact from fiction with a straightforward and honest examination of a payday advance and the short-term lending industry. Myth: Payday loans are extremely expensive and have exorbitant interest rates. Reality: Payday advances are two-week loans—not annual loans. Industry critics often cite payday advances as having a "391 percent annual percentage rate" which is misleading. The typical fee charged by payday lenders is $15 per $100 borrowed, or a simple 15 percent for a two- week duration. The only way to reach the triple digit APR is to roll the two-week loan over 26 times (a full year). State laws and industry best practices simply do not allow this to happen. Many states do not even allow one rollover. In states that do permit rollovers, CFSA members limit rollovers to four or the state limit—whichever is Tess. Even if APR were an accurate representation of the fees associated with a payday advance, the figure pales in comparison to the realistic alternatives considered by consumers. $100 payday advance with a $15 fee = 391% APR $100 bounced check with $56 Non -Sufficient Funds & merchant fees = 1,449% APR $100 credit card balance with a $37 late fee = 965% APR $100 utility bill with $46 late/reconnect fees = 1,203% APR Myth: Payday loans trap borrowers in a never-ending "cycle of debt." Myth: Payday lenders target poor people and minorities. Myth: Payday lenders do not want to be regulated. Myth: Payday lenders' high fees help the industry make billions in profits. Myth: Payday lenders loan money to people who cannot afford to pay it back. Myth: Payday lenders use coercive collection practices. Myth: Payday lending has grown dramatically because of aggressive marketing. Myth: Payday lenders hide fees and mislead consumers. Myth: Anti -payday lending activists have consumers' best interest in mind. http://cfsaa.com/about-the-payday-advance-industry/myth-vs-reality.aspx 01/02/2014 CFSA > About the Payday Advance Industry > Myth vs Reality Page 2 of 2 Myth: Consumers benefit if payday lenders are regulated out of business. Myth: People use payday loans frivolously and end up in a cycle of debt. Myth: Payday loans reduce the "welfare" of customers. Myth: Payday loans impact the larger economy and were partly responsible for the financial crisis. Myth: Banks and credit unions can offer small dollar, short-term loans cheaper. http://cfsaa.com/about-the-payday-advance-industry/myth-vs-reality.aspx 01/02/2014 # Page 1 of 1 Tet PEW CHA\ITAMLM Ttettt Interactive State Payday Loan Regulation and Usage Rates 'e Small -Dollar Loans Research Project 1 January 14, 2014 Go Shai Pev/s Safe Small -Dollar Loans Research Project classified stales Into three categories—Permissive, Hybrid, and Restrictive—based on their payday loan regulations. Nationally, the average usage Sigr rate for payday loans is 5.5 percent, but usage by state vanes from 1 percent 10 13 percenl. Usage rates also vary by law type and are 6.6 percent in Permissive stales, 6.3 percent in Hybrid states, Sit R and 2.9 percent in Restrictive states. The rale of online and other non -storefront borrowing does not vary significantly by stale law type, but storefront borrowing is far lower in Restrictive stales than in0J) Permissive or Hybrid states. Roll over the map to see each state's usage rate, and click individual states to read a summary of their payday lending laws. To team more, visit our collection of Payday Lending in America resources. 1.1 THE PEW CHARITABLE TRUSTS INTERACTIVE State Payday Loan Regulation and Usage Rates As federal policy makers work toward a national payday lending policy, here is a summary of state payday lending laws, Including loan usage rates. Note that these summaries should be used for general Informational purposes only. Permissive Slates 27 Allow single -repayment Loans with APRs of 391 percent or higher. Have payday loan storefronts, but maintain more exacting requirements, such as lower limits on fees or loan usage, or longer repayment periods. Have no payday loan storefronts. Embed Iat Iowa PERMISSIVE Payday loan usage rate 5% Pew Classlflcaton Permissive Statutory Citation 533D.1 otseq. Maximum Loan Amount A licensee shall not hold from any one maker a check or checks in an aggregate face amount of more than $500 at any one lime. All data on state laws compiled by the Nat rnal Conference of Stale Legislatures (NCSL) as 011/14/2014, bless marked with a caret i^). An asterisk (') Indicates results are not reported because tewer than 300 interviews were conducted in Ods state. Payday loan usage rate is based an 33,576 survey interviews conducted by Pew end includes storefront, online, and other payday borrowing. Some Restrictive slates have additional laws governing payday lending, which are not Included because lenders are not operating there raider state law. Download the complete list of state payday loan regulation and usage rales. Date: January 14, 2014 Project: Safe Small -Dollar Loans Research Project Issues: Credit & Lending Sources: Pew Safe Small -Dollar Loans Research P4ect 20(2: Natona) Conference of Slate Legistalures, Sept 12 2013. http://www.pewstates.org/research/data-visualizations/state-payday-loan-regulation-and-us... 2/27/2014 An infographic from THE PEW CHARITABLE TRUSTS I Oct 2013 Pew's Policy Recommendations to Fix Payday Problems Payday loans are packaged as short-term loans due on a borrower's next payday, but in reality, borrowers are indebted far longer and pay far more than advertised. The average loan requires one-third of a borrower's biweekly paycheck, exceeding what most can afford without having to borrow again. Policymakers should act now to fix the problems with payday lending in the 35 states where it currently exists. 5 regulations that will minimize harm to consumers and make small -dollar loans more affordable: X.: re: yea• . 30 1,24310 is 25 30 O Limit payments to an affordable percentage of a borrower's income Monthly payments above 5 percent of monthly pretax income are unaffordable for most borrowers. Loans requiring more should be prohibited unless rigorous underwriting shows that the borrower can pay the loan while meeting other financial obligations. O Spread costs evenly over the life of the loan Front -loading of fees and interest should be prohibited. Any fees should be paid evenly over the life of the loan, and loans should have substantially equal payments that amortize smoothly to a zero balance. Guard against harmful repayment or collections practices Policymakers should prevent or limit the use of postdated checks and automatic withdrawals from borrowers' bank accounts. They should also make it easier to cancel automatic electronic withdrawals and protect against excessively long loan terms. Q Require concise disclosures of periodic and total costs Loan offers should clearly disclose, with equal weighting: the periodic payment schedule, the total repayment amount, the total finance charge, and the effective annual percentage rate (APR) inclusive of all fees. © Continue to set maximum allowable charges Almost every state sets maximum allowable rates on some small -dollar loans because these markets serving those with poor credit histories are not price competitive. Policymakers may limit rates to 36 percent or less if they do not want payday lenders to operate, or somewhat higher if they do. For more information, please visit: pewtrusts.org/small-loans Contact: Andrea Risotto. Communications officer. The Pew Charitable Trusts Email: aiisottoapewtrusts.org Phone: 202-540-6510 The Pew Charitable Trusts is driven by the power of knowledge to solve iaday's most challenging problems. Pew applies a rigorous, analytical approach to improve pubttc policy. inform the public, and stimulate civic life. Payday Lending in America Series summary Payday loans are controversial. They typically offer about two weeks of credit, due in full on the borrower's next payday, at annual interest rates of around 400 percent. While borrowers find fast relief, they are often left indebted for months, struggling to repay a loan that was marketed as a short-term solution. Proponents argue that payday loans are a useful form of credit for consumers who lack access to more conventional banking services, but opponents claim they overburden people who are already struggling to make ends meet. The Pew Charitable Trusts' Payday Lending in America series details fundamental problems with payday loans and suggests solutions for promoting a safer and more transparent marketplace for small -dollar loans. Selected findings 12 million Americans take out payday loans each year, spending approximately $7.4 billion annually. The average loan is $375. A payday loan is characterized as a short-term solution for unexpected expenses, but the reality is different. • The average borrower is in debt for five months during the year, spending $520 in interest to repeatedly reborrow the loan. • 69 percent of first-time borrowers use the loan for recurring bills (including rent or utilities), while just 16 percent deal with an unexpected expense such as a car repair. Payday loans are unaffordable. • Only 1 in 7 borrowers can afford the more than $400 needed, on average, to pay off the full amount of these lump -sum repayment loans by their next payday. • Survey and market data show that most borrowers can afford to put no more than 5 percent of their paycheck toward loan payment and still be able to cover basic expenses. In the 35 states that allow lump - sum payday loans, repayment requires about one-third of an average borrower's paycheck. • Most payday loan borrowers have trouble meeting monthly expenses at least half of the time. • 41 percent of borrowers have needed a cash infusion, such as a tax refund or help from family or friends, to pay off a payday loan. • Payday loans do not eliminate overdraft risk. Most borrowers also overdraw their bank accounts, • A majority of borrowers say payday loans take advantage of them, A majority also say they provide relief. • Borrowers want changes to payday loans. • By almost a 3-1 ratio, borrowers favor more regulation of the loans. • 8 in 10 borrowers favor a requirement that payments take up only a small amount of each paycheck. • 9 in 10 favor allowing borrowers to pay back the loans in installments. Safeguards are needed to ensure affordability and protect consumers from the risk of lender -driven refinancing, noncompetitive pricing, excessive loan durations, and abusive repayment or collection practices. • Such safeguards can be applied in a way that works for lenders. Payday lenders continue to operate after a recent law change in Colorado, but borrowers spend less, and payments are far more affordable. • In states that enact strong legal protections, the result is a large net decrease in payday loan usage. Rates of online borrowing are similar in states with payday loan storefronts and those with none. Poli ers should fix the problems with payday lending in the 35 states where it exists. The Consumer Financial Protection Bureau and other state and federal policymakers should act now: • Limit payments to an affordable percentage of a borrower's periodic income. (Research indicates that monthly payments above 5 percent of gross monthly income are unaffordable.) • Spread costs evenly over the life of the loan. • Guard against harmful repayment or collection practices. • Require concise disclosures that reveal both periodic and total costs. • States should continue to set maximum allowable charges on loans for those with poor credit. Payday Lending in America reports Who Borrows, Where They Borrow, and Why (2012) How Borrowers Choose and Repay Payday Loans (2013) Policy Solutions (2013) Other resources available from Pew Payday Loans Explained (video) How Payday Loans Work (infographic) Payday Loan Affordability Fast Facts (infographic) Payday Borrowers Want Reform (infographic) Pew's Policy Recommendations to Fix Payday Loan Problems (infographic) For more information, please visit: pewtrusts.org/small-loans Contact: Andrea Risotto, communications officer, The Pew Charitable Trusts Email: arisotto@pewtrusts.org Phone 202-540-6510 The Pew Charitable Trusts is driven by the power of knowledge to solve today's most challenging problems. Pew applies a rigorous, analytical approach to improve public policy, inform the public, and stimulate civic life. Payday Loan Locations 500, 1,000 and 2,500 ft. Buffers Store Locations 500 Ft Buffer 1,000 Ft Buffer 2,500 Ft Buffer H etnpst ead High School Medical Associates Kaufmann Ave Asbury �k1 Permeylwania Ave. Bunker Hill Goff Course Kennedy Mali Dodva Sereet man tg`. r4 Vpe Connnisky Park Chaplin Schmitt Island Loral College City Hall At 500 and 1,000 feet, only two of the eight PDLs would be made legally -non -conforming. At 2,500 feet. six of the eight would be made legally non -conforming. Store _Hanle Address Advance America 12600 Dodge Street Allied Pawn! Payday Partners 2013 Central Avenue Check into Cash 3600 Dodge Street Chuck -N -Ga 0806 Wacker Drive EZ Money 3301 Pennsylvania Avenue Hometown Cash Advance 3416 Pennsylvania Avenue Hometown Cash Advance 0605 West Locust Street Payday Partners 3305 Asbury Road Pay Day Loan Locations * Store Locations Residential Zoned Areas 1200 Ft Zoning Buffer Areas Eligible for Pay Day Loan Stores L City limits Asbury Plaza Nstotic Millwork District Port of Dubuque Walmart Area Old Highway Road West Westside CourtMenards Store Mame Advance America Using a 1.200 foot buffer from a J Abed Pawn/ Payday Partners Check Edo Cash residentially zoned district would make seven of the eight existing PDLs non- conforming and s ignificantly reduce the area new stores could locate. 2600 Dodge Street 2013 Central Avenue 3500 Dodge Street Check -N -Go 0806 Wader Drive E2 Money 3301 Pennsylvania Avenue Hometown Cash Advance 3416 Pennsytvaria Avenue HWoetown Cash Advance 0605 West Locust Street Payday Partners 3305 Asbury Road Carry Out Locations 2500 Ft Store Buffer Residential Zoned Areas Areas Eligible for Pay Day Loan Stores 'City limits Store_ lame Address Advance America 2600 Dodge Street Allied Pawn/ Payday Partners 2013 Camel Avenue Check tic. Cash 3500 Dodge Street Check -N -Go 0806 Wacker Drive EZ Money 3301 Pennsylvania Avenue Hometown Cash Advance 3416 PernsyWania Avenue Hometown Cash Advance 0605 West Locust Street Payday Partners 3305 Asbury Road Pay Day Loan Locations •0 Store Locations �a e; CDBG Eligible Districts 2500 Ft Store Buffer Residential Zoned Areas 1200 Ft Zoning Buffer Areas Eligible for Pay Day Loan Stores L _ _ City limits Slore_Ilune Address J Advdce America 2600 Dodge Street Allied Pawn/ Payday Partners 2013 Central Avenue Check irto Cash 3500 Dodge Street Check -N -Go 0006 Wacker Drive EZ Morey 3301 Perruylvarde Avenue Hometown Cash Advance 3416 Pemoylvania Avenue Hometown Cash Advance 0605 West Locust Street Payday Partners 3305 Asbtry Road 1 t~ —I I I 1 �I ^ I I I { Bridget's Statement to DBQ City Council on 3/17/14 Hi, my name is Bridget Fagan and I'm a community organizer with Iowa Citizens for Community Improvement. Thanks for letting me speak briefly to the council around the possible payday lending ordinance for Dubuque. I've read the report and gone over the research the city staff has done. While I appreciate the time that has spent on the issue, the research and possible ordinance does not go far enough; and the purpose of the ordinance for Dubuque seems misunderstood. I started working on a payday ordinance with concerned Dubuque citizens almost one year ago. Folks were concerned with how individuals get trapped in a cycle of debt that is almost impossible to escape, wanted more alternative banking and were concerned with neighborhood and new business vitality. We know that we need legislation to cap interest rates so individuals will not be trapped in an endless cycle of debt, but that is moot until legislators see enough cities enacting ordinances so that they realize importance of the issue and move forward on it. Many of your sister cities have already enacted effective ordinances. We need an ordinance for Dubuque that will encourage new businesses to come here and for our neighborhoods to continue to grow. It's unlikely new businesses would want to be next to a payday lender because of the perceived neighborhood blight. We at Iowa CCI have been working on legislation for about 10 years. And we'll continue to work on legislation until it passes but we do not know how long that might be. Without passing a meaningful ordinance, new payday lenders will continue to pop up in Dubuque. I encourage the city council to request city staff to do more research and put together a more comprehensive ordinance than what has been presented thus far. None of the 7 cities in Iowa that have passed ordinances have looked- solely at payday._lenders.in — - - — relation to other lenders and residential zones. Other factors were taken into consideration (schools, liquor stores, adult stores, etc) when these communities discussed their ordinance proposals. City staff needs to conduct more research and bring back an- — ordinance that meets theunique needs of Dubuque and its residents. That is the only 7•easonable decision at this time. Doing nothing or passing the ordinance as currently written are unacceptable options to the residents of Dubuque. I also want to turn in around 100 petition signatures that Sr. Ruth Fagan, Dubuque Franciscan, got from other sisters at Mt. St. Francis. They're also concerned about this issue and are wanting the city council to pass a meaningful ordinance. Thank you for your consideration of this issue, and your concern for Dubuque's continued growth and quality of life. Bridget Fagan jj Community Organizer 70 1'{"1 515.255.0800 (office) c 0 Bridget@iowacci.org -Q 7- fT1 www.iowacci.org cc m C 0 CP Page 1 of 1 Laura Carstens - Pay day loan summary by Circles Allies From: Ermina Soler To: Carstens, Laura Date: 5/14/2014 12:27 PM Subject: Pay day loan summary by Circles Allies CC: Lessears, Ericka; Nash, Alvin Attachments: Payday loan summary_1.docx Laura, Per Alvin, we have been requested to send you a copy of the summary that some of the Circles Allies drafted as a result of a few interview they conducted with community members who utilized services of payday lenders. Any questions about the survey and it's content can be directed to Wesley Heitzman, wheitzman@mchsi.com &aninac Sofa Circles Coach Dubuque Circles Initiative 350 West 6th St., Suite 312 Dubuque, IA 52001 Office 563.690.6109 Fax 563.589.4244 esoler@cityofdubuque.orq www.cityofdubuque.orq/circles Vision: A community where all have the opportunity to succeed and contribute. file:///C:/Users/Icarsten/AppData/Local/Temp/XPgrpwi se/53 73613 DDBQ_DODBQPO 10... 5/14/2014 Payday Loan Experience Interviews: Explanation and Background This project arose out of discussion at our Tuesday evening Circles meetings. Several volunteer allies had read of the upcoming city work session concern payday lenders, their effect on the community, possible future regulations, etc. We felt it might be helpful to provide stories from users of payday lenders to convey the sense of the payday loan experience from their point of view. We also wanted to understand this experience ourselves. We developed a questionnaire to be used in either a single person interview or a multiple person focus group setting. The intent of the questionnaire is to guide payday loan users to describe their experience using payday loans, the impact of the loans on their lives, and any lessons they have learned through their experience. We understand that this questionnaire is a subjective, qualitative tool and that in a more professional environment much more time would be spent its development and testing. The questionnaire has been administered in an informal interview environment with an interviewer, the interviewee (payday loan user) and one or two supporting observers, roughly as follows: The interviewer introduces the participants and the survey (comments below). The interviewer talks the interviewee through the questions, with the interviewee filling in the questionnaire. As the questionnaire progresses, the interviewer uses the questions to guide discussion for more in-depth exploration of the interviewee's experience and perceptions. The interviewer and supporting observers take their own notes on the discussion. To date we have interviewed 3 payday loan users. It is our intent to interview many more users both within the and beyond the Circles community; however, we have not had time to do additional interviews for submittal for the working session. Based on our few initial interviews, we have found both similarities and differences in how payday loans are used and perceived by users. We hope that even this limited information will be useful to the city task force examining this issue. Wes Heitzman, Volunteer 750 Sunset Ridge, Dubuque 563-845-7274 Brenda Coffman, Volunteer 2089 Chaney Rd, Dubuque 716-319-0808 Joe Gonzales, Volunteer 3012 Arbor Hills Dr, Dubuque 563-590-6775 Payday Loan Experience Summary of Interviews Respondent demographics; reasons for first loan: A. Female, 40-50; first loan taken out approximately 1990 at age 24. The loan was used for "fun money." B. Male, 50-60; first loan taken out approximately 2000 at age 40. The money was used to pay bills. The respondent had gone on disability, but social security was not yet coming through. He had recently had knee surgery, he and his wife had a child born, and he had lots of bills. C. Female, 40-50; first loan taken out approximately 1999 at age 30. The money was used to pay bills. The respondent got a business degree from NICC, then got a job. When her welfare benefits were dropped, her income was not enough to make up the difference and she couldn't pay all her bills. Reason they went to a payday lender: A. She didn't want to pay 36% on credit card and needed $50. The amount was too small for a conventional loan. The payday lender didn't ask personal questions. B. He didn't want to use a credit card due to high interest rates. Also, credit cards make it too easy to over borrow; he has friends who went bankrupt due to the misuse of credit. C. This was her only option — her credit card was maxed out, and banks only loan to people who have money. Terms of loan: A. She received $50 cash. She wrote a check for $50 and had to pay $58.60 back in two weeks. The check would then be returned or shredded. B. He received $100 cash. He wrote a check for $100 and had to pay $118 back in 30 days (his disability check came once per month). When he paid back the loan, his check would be returned or shredded. C. She received $445 cash (her personal maximum). She wrote a check for $445 and had to pay $500 back in 2 weeks (on her payday). She noted that if the money was borrowed any time between paychecks, amounts would be still the same even though the borrowing period was less. Perception of interest rate at the time the loan was taken out: A. She did not understand the interest rate; it was not explained to her. She viewed the $8.60 as a small fee to pay to get the money she needed. B. He thought the interest rate was posted in very small print, but it was never explained. He did understand the concept of interest. C. She didn't know interest rate; it was not explained. There was a chart at the payday lender's office that showed how much you borrow and how much you pay back. It may have stated the interest rate, but "if you need the money you don't care." History of loan extension and of further usage of payday lenders: A. She continued taking out loans and repaying them every two weeks for two years. Why: "to pay off the first one!" The loan amount was increased through this period as she needed additional money to pay bills. She maxed out at $400. She thought the fees on this were $50-$60 for each 2 week loan. B. He never extended a loan (this was a point of emphasis). He has continued to go back to payday lenders on an as -need basis, but he always has paid the loan back and has never extended the loan. The maximum amount he ever borrowed was $100, with a $25 fee. His most recent loan was taken out in April, 2014. C. She continued taking out loans for 3 years. Typically, she would pay the loan off on a Friday, then take out a new loan on Saturday. At some point she started a loan with a second payday lender to pay off the first. She was then paying the first loan of $445 off at $500 and a second loan of $355 off at $400 every two weeks. Relationship with the payday lender: A. She first approached the lender after seeing an ad on TV. She received lots of encouragement from the lender to extend and increase her loans and to keep borrowing. "They made it make sense, very smooth. The lender says, 'we go by your income.' They check your pay stub, utility bill, and checking account, see what your cash flow is, then they tell you they can up your loan. It's a dependency, worse than an addiction." B. He spoke at length about how encouraging the lender was for him to keep on borrowing. Otherwise, business -like. C. It was intimidating at first — there was lots of paperwork and personal information required. After a while they knew who I was. (It became routine to come in, pay off and reborrow.) Note — she was maxed out, so there was no need for encouragement to increase the loan. Were there ever any threats or intimidation from the lender: A. No. B. "Not me but I know of other people who have issues." (He described these as verbal harassment, threats to call the employer, etc.) C. No. How they ended the loan: A. She walked away and didn't pay. Why: "I got smart" B. He always paid the loan back without extending it. C. Her financial position gradually improved. She used her tax refund each year to break the cycle for a few months. Her financial position gradually improved as she and her husband both worked at their jobs, and eventually she was able to work out of the loan. How did payday loans have effected their lives: A. Financial: "No getting out of it." Emotional: "Stressful. B. Financial: "You may need them but (you) never get ahead." Emotional: "Worry to pay back." C. Financial: "Caught in a cycle — took years to get out." Emotional: "Very stressful — had to juggle from one loan to the other. Had to get to one lender on Friday, then go back Saturday to borrow to pay off 2nd loan then next day borrow from 2"d to pay bills. Based on all your experiences with payday loans in your life, do you wish that you had done something different? A. "Oh yes — never done it! B. "Had better credit." C. "I wish there was something different I could have done." Do you believe that payday lenders are useful and helpful in the community? A. Some people really need quick cash. They don't have family or friends, or they have exhausted them. They need a source of cash, just not to get caught in an endless cycle. B. "It's the only source for small loans. But they do not discourage taking out more than you can pay." It's like a gambling addiction. C. Yes and no: "No —they are predators and once you get stuck in the cycle it can take years to get out. Yes — I'm glad I had it to survive." Is there anything else you'd like to pass on to the city task force: A. "Put limits on." le, one check per month, some sort of cap on loans. B. No comment made. C. "1. It is the working poor that get stuck in this; make too much for welfare benefits, but not enough to survive. 2. There needs to be alternatives —credit union or financial services. 3. Unbelievable interest rates, Work Session Potential Zoning Regulations for Payday Lenders Presentation :0 City Cound May 19, 2014 Payday Loans • Small, short -teem, unsecured loans • Sometimes called cash advances • Generally must have payroll / employment record • Generally charge a much higher interest rate • Carry a substantial risk to the lender S PaydayL n \rs n Dubuque 6 in west side commercial areas • Dodge Street (2) • Pennsylvania Avenue (2) • Wacker Drive • Asbury Road 2 in downtown area • West Locust Street • Central Avenue Comparison of ether ',":` Municipal Zoning Regulations for Separation of Payday Lenders Iowa Community Separation between Lenders Separation from Residential Ames Cedar Rapids Des Moines Iowa City West Des Moines Windsor Heights 1,000 feet 1,000 feet 1,000 feet %2 mile 1,000 feet 600 feet %2 mile ,000 feet 1,000 feet 1,000 feet 250 feet 1,000 feet 600 feet 250 feet 1,000 feet 1,000 feet Various separation buffers Payday Loan Locations 500, 1,000 and 2,500 ft. Buffers * Store Locations 500 Ft Buffer 1,000 Ft Buffer 2,500 Ft Buffer Hempstead High School Medea! Associates liennady Mall Kaufmann Ave Bunker Hill Golf Come ,Nornsylre.••.. 0.40* I Add".. ,.•0"st.4' to, as Carel. Comml,ky Pak City Hall ChapEn Schmln Island 1.7 Pla: a 20 At 500 and 1,000 feet, only two of the eight PDLs would be made legally -non -conforming. At 2,500 feet. slx of the eight would be made legally non -conforming. ACI.110,r5 2,001)00.7e Street Pied Pownil>ayasy Partneca_12013Canaal AVORIe otecs ceth '35°0 Do'YO Seed 0,eck-14-00 0806 wecter Dive 3301 Perrertvenia Avatwa 3.16Parravtvanle Manua EL Money Hometown Ceti, A<Nence tiomeiown COI advance 0605Wer1 Local %reel Puyday Psaner 33.05 natx,Roact Separation from Residential areas Pay Day Loan Locations * Store Locations Residential Zoned Areas �\ r-- 1200 Ft Zoning Buffer r� _ Areas Eligible for Pay Day Loan Stores - ,' City limits —I '� - -- 1_ __ L • (Chaplain Schmitt Islami • _ • :.. :----1 Asbury Plaza I - - 1 1 Former Pack Sde : ,f,-----1 • r __.-- Historic Millwork Disnicl Inn and Wacker Plaza \ ..'l port of Dubuque * 1South Port i., 1 Wa1mM Area I ` • \ Old Highway Road West ___I _ I Westside CourtRdenartl0 Stare oma Adelman \ KMyer=Amerce MOO Desja 4reM Using a 1zon foot front a NGe Pawn melee keinere 20t3Ce•meAv0ae tractbuff tSteentl.ttzoneddistrictwon, maks Crecteeoe.en 0Deep mOel seven or the eight toasting PDIs non. �^`'�10 ���`^0"teO conforming and significantly reduce the akknne Mat ParrtejleeriaAverue _ area neW stores cold locate. rkTelOAn Cal.Adrenoa 3410PMieyNUda Avenuey y natoWnCada Aeon= MPon O605MRa LaudSbeet \Payd yPulne t 3305 reeve Rood rctive Pay Day Loan Locations O Store Locations • Schools • Carry Out Locations 2500 Ft Store Butter Residential Zoned Areas i 1200 Ft Zoning Buffer - �I • ,e.:, ; Areas Eligible for Pay Day Loan Stores — • . , L City omits l - ¢ � • • � ti < a .Apoiwn• Add,. • •` • is Amor.AmonD MO Dodge meet •• l'r Alf ed PnnJPgtley P*$we 2913CahtlAytw.♦ • _ heck Into Coe. 3340 Dcdpe Stret EZ61atf 330IPatylk Avow, \ • e MttitOtMCe/h A•warce 3h6Peeeyl.r. Avenue ♦ • ♦ • o- moo, i. • lemlbplt Cash /Mete, 0306 Wet Locust •.bit p • r G• 1 • Payday Paews 3306 Peary Rood --1I • •• ' { L NI `i L` ff� ♦ • ♦ .. °fie $s i • ( .r,, i-_ i 1. __ ,..) . .......___,..._____\ •,. „. • �/.....__/ Relation to CDBG arget areas Pay Day Loan Locations 0 Store Locations CDBG Eligible Districts 2500 Ft Store Buffer Residential Zoned Areas 1200 Ft Zoning Buffer F% ,1 Areas Eligible for Pay Day Loan Stores _ _ Clty limits ora Ilan 80. e.. 1 Adverbs Mecca MOO bodge street Abed PamrPa/Car Pri ma 2015f+o.l Avmele Cheek ab Cess 351)10007,S"em ChedMLOG OISISWxem Drine Et Maw/ 07M PermivaHS Avenue IftneteM CeV1AMM+oe 9M6PmenNwea Mame Herat.. Cath Adm. 1:805 est bcWt Skeet Payday PaMera 320SAeWy Rood Impart of zoning reguiat • Existing payday lenders: • Are made non -conforming ("grandfathered") • Can remain open indefinitely • Can reopen at same location if closed Tess than a year • New lenders can't open on the non -eligible areas • On-line services generally are exempt from zoning • Little effect on consumers use of payday lenders rin e New regulations should be no more restrictive than buffers fcr adult entertajnment establishments: • a minimum of 1,200 feet from residential districts • a minimum of 2,5C2 eet between each business May be more effective to ask State 0aL:imakers establish more stringent regulations 111`1!'•111011111011{{11MllI1Illlli lit 101 !Iitiill t?1,i{i{IlIlil:tia'Mi1 EllT1111111111111115111 1T11111{{111iH1it11ltllSal.111,1111,11M11ii1111511111111tif{°lilltitit1•1it11111.1 ? .t i5=;sli!l1111Ili1{1S11S Interest increases in payday -lending Assue In Dubuque Plan to restrict where new sion would hold a public hearing businesses could operate before maldng arecommendation to the council. The amendment then appears likely to be adopted, would appear on the council agenda but would the measure be for final consideration and passage. just mostly,symbolic? BridgetFagan, a community orga- nizer with Des Moines -based non - BY BEN JACOBSON profit Iowa Citizens for Community THstaff writer Improvement attended Monday's ben.jacobson@wcinet.corn work session. According to Iowa CCI, the average APR nationally for apay- City of Dubuque officials will day loan is more than 400 percent, move forwardwith a planthatwould and the average borrower pays $475 restrict where new payday -lending in fees and interest. business can operate. Eight other Iowa cities have adopt - Supporters say the move would ed similar zoning restrictions, and help shield.low-income residents theywork, Fagan said. from predatory business practices "I live in Des Moines," she said. designedto ensnare them in an end- "I've seen them leave the neighbor - less cycle of debt hoods that theywere in and stay out "You get caught in a cycle where completely" you take out one loan to pay off a Jamie Smith, ownerofAlliedPawn previous loan," Mayor Roy Buol said and Check Cashing, said the asser- during a City Council work session tion that payday lenders prey on the poor is "absolutely ridiculous." He notedthatsixofDubuque's eight pay- day lending companies are located inDubuque'sWestEnd, considered a more affluent area of the city. Smith said Iowa CCI's numbers are "embellished," and that a $300 loan will'typically only cost a bor- rower $35. About 97 percent of his customers repay loans on time,tand existing Iowa law heavily regulates the industry in the interest of pro- tecting consumers. . • "There is no necessity for this to happen," Smith said. "The reality is this isn't about protecting consumers, this is about getting the Iowa CCI's name in the paper, in the media." Monday.."You're just caught init.You ca n'treally get out of it." But one council member said the restrictions would be symbolic but mostly useless, leaving Dubuque'6 eight existing payday lenders largely unaffected: • "People say we have to do some- thing," Council Member David Res- nick said during the work session. "I don'tthinkthe somethingwe have to do is waste city staff time any more if it's not going to have some kind of good effect on our citizens and our consumers here." • Council members have asked city planning and zoning staff to draft an ordinance amendment that would create buffer zones wherein new Smithsaidhewasinvitedto attend paydaylenderswouldnotbeallowed Monday's work session, but was in- to open up •shop, The amendment formed he wouldn't be allowed to would closely mirror the city's adult address council members. entertainment zoning policy, which Council Member ICarlaBraig ac - largely prohibits such venues open- knowledged that new zoning rules ingwithin city limits. wouldn't have an immediate no - Existing paydaylenderswould be ticeable effect. But she said it would classified asnon-conforming, but send a message to state legislators, would be allowed to operateindefi-- who have the authority to place more nitely. limits on the industry. Once the amendment is drafted, "Itmightseemlike it's nothing, but the city's Zoning Advisory Commis- it's whatwe can do," she said. • urt ..','amu• • . G teat [ tfle VolunteerJudy Hamilton plants flowers Wednesday at the Dul ILaflL1r9 bIt(L(7VEi the extra es. after Wisconsin towns provide a spirited and two airport response for returning veterans, on Tues in addition to welcome -home Dickeyv celebrations at Dubuque -area airport. day's re BY CRAIG D. REBER • back fro THstaff writer creber@wcinet.com • • ICen I retiredi LANCASTER, Wis. — Lancaster Fire Chief day, eve Steve Braun had so much fun welcoming home vets on 1 area veterans from this week's Honor Flights, he "The wants to do it again. • I said, "We expect to participate in the future if the thought opportunity comes up," he said. their se: rience." Brau Lancasi Vietnan area vet one on • cone -h "Ithc Participants onboth Honor Flights of Greater Dubuque flights were wel- comed home at Dubuque's Grand River Center by hundreds of people during separate celebrations Monday . and Tuesday nights. Lancaster was one of numerous sieve emergency response, law enforce- Braun ment and motorcycle units that es- Dubuq' carted the veterans and their chaperones from this are • the brightly -lit Dubuque Regional Airport to a went ju spirited reception at Grand River Center. for thei It was a first for Braun, Grant County's emer- the well gency management services director, who was tickled.' joined by eight other firefighters Monday night. Per r. "I wasn't sure what to expect," he said. "We were • Dubugi really impressed by what Honor Flight does • with on for veterans. We were honored to be apart of that, asldngl and welcome them all home." - • town w WebQA - DUBUQUEIA - Melinda Rettenberger W066627-032214 - Contact Us Contact Us Details Contact Us Details Page I of 2 Name: Jamie Smith Phone No.: 563-583-5187 City Department: City Council If "other," please provide the name of the department you wish to contact: Message: Honorable Council Members, Here is some more information about the "Iowa Citizens for Community Improvement." Hopefully this helps you all to realize the truth behind this group. The ICCI has been denounced by both sides of the political aisle. I hope you take into consideration who they really are when forming your decisions about the Payday Lending ordinance. http://www.activistcash.com/organizations/312-iowa-citizens-for-community-improvement/ Regards, Jamie Smith Owner Allied Pawn 2013 Central Avenue Suite 900 Dubuque, IA 52001 563-583-5187 Please note: Questions or comments submitted via the City of Dubuque website are monitored during regular business hours. Message History Date On 6/17/2014 12:29:17 PM, Melinda Rettenberger wrote: Ms. Smith, Thank you for submitting this information. I have printed the article and it will be forwarded to the Zoning Advisory Commission in their packet for their July 2nd public hearing on this subject. Melinda Rettenberger Planning Services Department. On 3/22/2014 11:12:57 AM, Randy Gehl wrote: Thank you. Your request has been submitted. Track the issue status and respond at: htto://mvctovhelo.us/DUBUOUEIA// cs/ReouestEdit.asox?rid=66627 On 3/22/2014 11:12:57 AM, wrote: Request was created by customer Request Details Reference No: W066627-032214 Create Date: 3/22/2014 11:12 AM Update Date: 6/17/2014 12:29 PM Completed/Closed: Yes Close Date: 6/17/2014 12:29 PM Status: Email Sent http: //mygovhelpadmin. us/DUB UQUEIA/ZAdmin/S ervi ceReque sts/Print. aspx?id=66627&new... 06/17/2014 WebQA - DUBUQUEIA - Melinda Rettenberger Page 2 of 2 Priority: Medium Assigned Dept: Planning Services/Zoning Assigned Staff: Laura Carstens Customer Name: Email Address: alliedpawndubuque©yahoo.com Phone: Group: (Not Specified) Source: Web http://mygovhelpadmin.us/DUBUQUEIA/ZAdmin/ServiceRequests/Print.aspx?id=66627&new... 06/17/2014 Iowa Citizens for Community Improvement — Activist Facts Page 1 of 6 ACTIVIST FAiI& (tp ://www.activistfacts.com) ORGANIZATIONS (H TT P5:// W WW. A C TI VI5 T FA C TS.COM/ORG A NI ZA TIO N5/) Ci)�I'l ] 9�%izmii Iioh CORI Organization A-. RELATED PEOPLE $ DONATIONS Overview Search site CELEBRITIES FOUNDATIO (HTTP S://W W W. A C TI VI 5 T FA C TS. CO M/CEL E6RITI ES/) HTTPS:// W W W.A C TI VI 5 T F A C TS [11111pirOVOlififfillit Iowa Citizens for Community Improvement (ICCI) was founded in 1975 to assist low-income Iowans with predatory lending, unscrupulous car dealers, home ownership, and personal money management. Since Its founding, however, ICCI has discovered that real power In lowa lies beyond the city limits. In the last decade, the organization's priorities have shifted away from defending the urban poor to more politically lucrative attacks against what its activists term "factory farms." In making this shift, the group also started charging dues for the first time. Once three-quarters urban in its membership, ICCI is now mostly comprised of rural Iowans seeking to hop on the pro -"family farm," anti "factory farm" bandwagon. ICCI Is comprised of just 2,000 Iowans, but the frequency with which they protest and lobby is Intended by its professional leaders to create the public perception of a much larger membership. They are a tiny but extremely vocal minority who consistently push for sweeping regulations on Iowa's 90,000 farms — except for the ones owned by ICCI members. The problem with the "family" and "factory" farm labels is that ICCI writes the definitions Itself. ICCI rural organizer Lisa Whelan offered a definition of a "factory farm" to the Council Bluffs Daily Nonpareil in 2004, defining them as farms that "need a permit to operate." This might be an objective standard If ICCI didn't proudly take credit for helping to change those same permit laws to suit its own agenda. In its 2002 annual report, ICCI boasted of its efforts to pass Iowa Senate File 2293, which lowered the permit threshold on pork farmers from 4,166 hogs to Just 2,500. In most counties a farmer must raise nearly twice that number of animals just to earn the median household Income in that county, Not content with protest -augmented lobbying, ICCI has also pressured judicial officials to Interpret the law in questionable ways. In the July 23, 2002 Fort Dodge Messenger, Humboldt County Attorney Derk Schwieger related how ICCI encouraged him to set aside his professional understanding of the law in favor of mob rule. ICCI, Schweiger said, wanted him to certify the legality of a countywide moratorium on new livestock farms, regardless of what the law actually said. In Schwieger's words, "I was told by ICCI members that I should draft my [legal] opinion according to public opinion ... that's not how this works." In a Des Moines Register interview, ICCI executive director Hugh Espey admitted that he has never set foot in a large-scale livestock confinement, the kind of facility his organization decries on a daily basis. For a group that claims to combat threats that supposedly lurk next door, It is unusual that its most vocal agitator has never witnessed the "problem" firsthand. "Local Control" Hypocrites ICCI consistently clamors for "local control" of agriculture, which typically translates to the suppression of out-of-state investment in Iowa farms. The model for "local control" Is Nebraska, where a law enacted via ballot Initiative forbids non -Nebraskans and agricultural corporations from investing in farms there. Less farming capital, of course, means fewer jobs 0) Information ADDRESS 2001 Forest Avenue Des Moines , IA 50311 http://www.activistfacts.com/organizations/312-iowa-citizens-for-community-improvement/ 06/17/2014 Iowa Citizens for Community Improvement — Activist Facts and depressed economic development, a bitter price to pay for satisfying anti -business activists. Even if this kind of out-of-state investment would allow an Iowan to continue farming and maintain a family tradition instead of selling off his land, ICCI considers this a bad trade-off. The irony of ICCI's "local control" proposals is that it receives the bulk of its money from large, out-of-state foundations (membership dues comprise the remainder of its budget). One-time ICCI vice-chairman Vern Tigges lamented in October of 2004 to the newspaper Carroll Today, "We don't have money. All we have is people power, and that's the name of the game." Actual people do indeed comprise ICCI's membership, but the game has some other names, too: Ford, General Motors, and Standard Oil, to name a few. The giant philanthropies that bankroll ICCI (none native to Iowa) trace their considerable assets back to giant corporations. The Ford Foundation, the General Motors -powered Charles Stewart Mott Foundation, and the Standard Oil -fueled Belvedere Fund (a subsidiary of the Rockefeller Family Fund) all contribute substantially (see "Financials" section). Foundation Home state Corporate origin Charles Stewart Mott Foundation Michigan General Motors Corporation Rockefeller Family Fund, Rockefeller Brothers Fund New York Standard Oil Belvedere Fund District of Columbia Standard Oil McKnight Foundation Minnesota 3M Ford Foundation Michigan Ford Motor Company Educational Foundation of America Connecticut Prentice -Hall Publishing The Waterkeeper Alliance ICCI is adept at blurring the lines between its corporate funding and its "grassroots" public image, but the group is more open about its ties with the Waterkeeper Alliance. Led by Robert F. Kennedy Jr., a lawyer with a lot of name recognition, Waterkeeper is dedicated to suing pork farmers Into the ground in the hopes of scoring a tobacco -style legal settlement. In the July 25, 2002 Von Buren County Register, ICCI board member Garry Klicker declared that "Waterkeepers [sic] Is one [group] I not only am happy to support, but have joined as well. Robert Kennedy's strong statements are exactly on target" Kennedy's statements include the 2001 bombshell he dropped In the Los Angeles Times, when he said that Waterkeeper "will march across this country and we will bring these kind of lawsuits against every single pork factory in America if we have to ... Whatever it takes to win." The Des Moines Register reported in April 2002 that Kennedy called pork farmers "a greater threat to the United States and U.S. democracy than Osama bin Laden and his terrorist network." That same month he also told a television reporter that the best thing would be if this [pork] industry did leave the country." At times ICCI's hatred of modern animal agriculture drives the group to make some allies that livestock farmers normally avoid. As if the group's support of the Waterkeeper Alliance wasn't enough, the roster of speakers at ICCI's 2002 convention included Michael Appleby, vice president of the Humane Society of the United States (HSUS). Appleby's fellow HSUS spokespersons have advocated the abolition of all livestock agriculture. Child Abusers and Serfs? "I feel an obligation to society in general to stop these people — and I will," ICCI board member Garry Klicker told the Burlington Hawk Eye in June 2002. Klicker's rant reveals a dark side to ICCI's fight against ordinary Iowa farmers: [Klicker] also doesn't believe that hog producers who contract with a corporation are true family farmers. "If they are not taking a market risk, they are not farmers — they are employees," Klicker said. "I personally have problems with farmers getting paid — they are like serfs." He also is adamant that putting animals in confined spaces is wrong. "My feeling is if a farmer is raising hogs in a confinement, they probably need to be visited by DHS [the Iowa Department of Human Services] because they probably have kids in the closet," he said. Pork farmers are child abusers and serfs? No wonder ICCI feels it has so much to yell about. Blackeye Page 2 of 6 http://www.activistfacts.com/organizations/312-iowa-citizens-for-community-improvement/ 06/17/2014 Iowa Citizens for Community Improvement — Activist Facts Page 3 of 6 ICCI's tactics are more antagonistic than they are neighborly. The group is notorious across Iowa for holding aggressive protests and disrupting public meetings. Farm market analyst David Kruse wrote in a 2003 issue of The CommStock Report that "ICCI State Director Hugh Espey says first they call you and if there is no response they come after you, showing up with protest signs on your doorstep if they have to.' Added Kruse: "I don't think they always bother to call first." The home -visit protest is indeed one of ICCI's favorite tactics. The group routinely charters buses to transport activists to the homes of private farmers, businessmen, and state employees for "spontaneous" rallies. Occasionally they fly out to Washington, DC to protest on the front lawns of hapless administrators there, too. ICCI member Viola Faust's May 2005 letter in The Winterset Madisonian details one such federal adventure: Sunday afternoon we boarded 11 school buses and went to the Acting Deputy Secretary of the US Department of Agriculture's house and knocked on his door. Can you Imagine 600 people with sighs of dislike, standing out in your front yard yelling at you. Well, of course he called the cops, they always do. Another preferred ICCI tactic is to publish private citizens' home phone numbers in newspaper scare ads. Recent examples involved fourth-generation farmer Nick Hunt, who had two phone numbers and his home address published, and third -generation farmer Jay Edge, who suffered harassing phone calls. ICCI's tactics succeeded in blocking the construction of Edge's hog farm, even though it had passed the county standards that ICCI itself helped shepherd through the regulatory process. One Iowa Falls Times -Citizen columnist wrote In July 2000 about ICCI's antagonistic tactics in protesting a state economic development administrator: "It gives the community another black eye to see the group basically accost a private citizen at his own home ... Invading a state employee's home on a Saturday afternoon was uncalled for." A 2004 ICCI protest — on the front lawn of Farm Bureau employee and Ankeny, IA School Board member Denny Presnall — brought Presnall's friends and neighbors out of the woodwork crying foul. One fellow school board member wrote the Iowa City Press -Citizen: No one, especially Denny, deserves to have their property Invaded and their family harassed on a quiet Saturday afternoon. If these people were angry with the Farm Bureau, they should have descended on the West Des Moines facility with their three busloads of rabble and not molested an innocent Ankeny family. However, that would have taken conviction by CCI, as it is always easier for them to bully and intimidate defenseless women and children on a quiet afternoon than it is to go after the source of their anger .., I also find it amazing that the only published names were the victims of these CCI hate crimes. I would hope that the paper would publish the names of those who perpetrated this pathetic demonstration. And The Des Moines Register reported In July 1999 on an ICCI protest that was held on a dairy executive's front lawn: Protesters spent roughly 20 minutes chanting in [Jim) Erickson's front yard and reboarded the buses after police were called. Erickson apparently was not home ... Saturday's hubbub did not sit well with Erickson's neighbors in southwest Des Moines. "I think it's low to go to a man's home," said Paul Canfield. "This is tacky." Motivation While Iowa Citizens for Community Improvement certainly has Its share of true believers, a different feeling — resentment — seems to motivate most of its members. The war ICCI wages is one that pits neighbor against neighbor. Resenting the financial success of nearby farmers who raise livestock using modern high -yield techniques, ICCI's farmers reach out for any regulatory weapon they can use to strike back. In a July 2004 letter to the editor published by The Des Moines Register (Iowa's largest newspaper), farmer Gary Boswell wrote: "Barb Kalbach of the Iowa Citizens for Community Improvement readily admitted that she was unable to compete in livestock production, yet http://www.activistfacts.com/organizations/312-iowa-citizens-for-community-improvement/ 06/17/2014 Iowa Citizens for Community Improvement — Activist Facts there are many of us who can. She gives this as a reason for ICCI to fight to stop modern livestock production." In 2003, hog farmer Max Schimdt echoed Boswell's analysis of ICCI in the Register: They have a very antagonistic attitude ... They feel so desperate, they've chosen that way. It hurts those who choose to associate with them. The overwhelming majority of them are people having trouble succeeding in their station in life, having trouble economically and seeking something to satisfy their plight. They don't come with a negotiating attitude. ICCI's website reveals a more craven motivation as well. It features a section where viewers can look up self-proclaimed "family farms" and buy meat or produce from them online. Serving niche markets, ICCI's farmers have a vested economic interest in regulating their more efficient competitors into oblivion and disparaging their products. Eleven -year ICCI veteran (and former vice -chair) Vern Tigges told the rural newspaper Carroll Today in October 2004 that his competitors' pork "doesn't taste the way it used to ... it doesn't taste as good as home grown. It's always got that cardboard taste to it" Tigges, of course, raises and markets his own "family farmed" pork and markets it at a higher price than what mainstream growers charge. Such naked economic protectionism makes ICCI's conflict-of-interest complaints against politicians who farm especially ironic. The group's farmer -activists complain that Iowan public officials who farm are using the political process for economic benefit, yet the policies ICCI's farmers push are designed to block, cripple, and shut down the more efficient farms that they can't beat in the free marketplace. So far, the paperwork tactic hasn't worked out very well for ICCI, but that hasn't stopped them from trying. ICCI's recent ethics complaints against Iowa Environmental Protection Commissioner Heidi Vittetoe and state senator Mike Sexton were ruled groundless. Sexton's charge was unanimously dropped by the Senate Ethics Committee's three Democrats and three Republicans, while a separate state ethics panel said that "you have to torture and twist the statute to reach the conclusion sought by ICCI that Vittetoe has a conflict? With its self-interested motivation and high-pressure lobbying, however, ICCI poses a serious threat to modern agriculture. In a December 2004 letter to the Iowa Falls Times -Citizen, farmer and ICCI foe Dave McClellan called further attention to the self-serving implausibility of ICCI's proposals: Recently, [Iowa) CCI placed an ad in the Times -Citizen stating "Family farms yes; factory farms no." Is anyone using modern technology in grain or livestock production a factory farm? This unjust persecution of the livestock industry is outrageous. CCI proposes I raise livestock like a family farmer. I propose they do the same in grain production. That's right, no hybrid seed corn, no Insecticide, herbicides or commercial fertilizer. Try farming like that and see how long you last in business. CO doesn't want more livestock production in Hardin County but are the first in line at the local elevators or grain processors like Cargill to cash in on the benefits of higher grain markets that have been stimulated by that same livestock production. What we have here is nothing but economic jealousy by a bunch of whining hypocrites. If ICCI's cavalier use of the "factory farm" label doesn't smell funny enough already, consider an August 2002 Associated Press story titled "Ultrasound May Cut Smell of Hog Waste." By collecting hog manure and treating it with ultrasound waves, large-scale pork producers are able to cut the potency of its smell In half, reducing or eliminating nuisances for nearby homeowners. ICCI leader Hugh Espey's response? "This Just gives the bigger operations reason to expand and proliferate." Even though odors are among ICCI's biggest complaints about modern pork farms, the group protests more (not less) when science presents an opportunity to mitigate the problem without having to deploy heavy-handed regulators. Page 4 of 6 http://www.activistfacts.com/organizations/312-iowa-citizens-for-community-improvement/ 06/17/2014 Iowa Citizens for Community Improvement — Activist Facts Page 5 of 6 cia Related People Iowa Citizens for Community Improvement is connected to the following people: Barb Kolbach (https://www.activistfacts.com/person/3600-barb-kalbach/) Member Bob Uetz (https://www.activistfacts.com/person/3602-bob-uetz/) Former Board President Garry Klicker (https://www.activistfacts.com/person/3605-garry-klicker/) Board Member Hugh Espey (https://www.activistfacts.com/person/3606-hugh-espey/) Executive Director Kurt Kelsey (https://www.activist£acts.com/person/3601-kurt-kelsey/) Board President Larry Ginter (https://www.activistfacts.com/person/3603-tarry-ginter/) Former Board Secretary Phyllis Willis (https://www.activistfacts.com/person/3599-phyllis-willis/) Member Vern Tlgges (https://www.activlstfacts.com/person/3604-vern-tigges/) Former Vice-ChaIr Notable Quotes My feeling is if a farmer is raising hogs in a confinement, they probably need to be visited by DHS [the Iowa Department of Human Services] because they probably have kids in the closet. Garry Klicker (https://www.activistfacts.com/person/3605.garry-klicker4 Inside? No. I've seen videos, and talked to folks who have worked in them. I've driven by them. Hugh Espey (https://www.activistfacts.com/person/3606-hugh-espey/) Waterkeepers [sic) is one [group] I not only am happy to support, but have joined as well. Robert Kennedy's strong statements are exactly on target. Garry Klicker (https://www.activistfacts.com/person/3605-garry-klicker/) $ Donations (Click headers to sort) FOUNDATION TOTAL DONATIONS LAST YEAR OF DATA Annie E. Casey Foundation $310,000 2002 (htips:/iwww.activistfacts.comiioundationi247- mis 'a4raEsneAfa)lon $29,000 2001 (hops:/iwww.activistiacts.comiroundationi253- ®aeldtaikYMS caFoundatIon/) $130,000 2000 (https:// ww w.aciivisi£aais,comifoundation/57- Mslascli fibra $170,000 2002 (https://www.activistfacts.comlloundation/954- BelvedereFund/) $70,000 1993 http://www.activistfacts.com/organizations/312-iowa-citizens-for-community-improvement/ 06/17/2014 Iowa Citizens for Community Improvement — Activist Facts Catholic Campaign for Human Development $161,000 2005 http://www.activistfacts.com/foundation/962- h rl s 5tewar, M tt Found fon $345,000 2001 itpsilcCampafgngorHuman evelopment/L. naps;rwww.acnvistracts.comrtoUanaanonf n- $980,000 2003 Ef{8ff�•,/wwwaHWbistfact4li 8r/f1 • A6ou •s'ONNw'aciivistfads.comifounda ioni86- Contuntnent to Accuracy 2001 �6S2itlalSlfliofAmericaq IS' r gMbripiJi? '� isindfonndationii076Ar.UVI 688s is committed tomacy. Feel free to Adivl An J S4L VU LLUon LL Orga ( g¢crdA0f1slilPti�Lcation contact us with factual corrections and comments. (hdp:J rnisnacis.comiioundaiionisiu- $40,000 2001 2003 1989 Learn iav"IPr;Arfa pa�p{Mnl fra�aa ortamotsastsmnrtaouostifionii763- aboutCRg¢eliti8n/) $200,000 nips:iiwww,actIvIstfacts.comifoundationi103- PrivartilOsnaMAnesFoundation $20,000 htiip`st:i!Fiwww..activistiacis.comifoundationii35- $25,000 2001 ht54ehttpsaiwww.activistfacts.comifoundationi523` /fvytis bfatefdatlon/) 2014, Center for Organizational Research and Education. $275 000 2002 ?'lfJb418-hfrfdi8P.f1fft fai hiips://www.activistfacts.comifoundationi97- $70,000 1999 ic%�P�r'titP dation/) httpsaiwww.activistfacts.comifoundationi431- manicitti)) Fund for Environmental $30,586 2003 Cooperation hiipsaiwww.activistfacis.comifoundation/437- 20,000 1997 Nerk1S tfIVRaPtlflBforEnvironmentalCooperation�j hiips:iiwww.activistfacts.comifoundationii765- $5,000 2001 RibMstI fliii rdationl) hiips:iiwww.activistfacts.comifoundationi444- 25,000 2001 pmesRia8i8)f anon $ httpsaiwww.activistfacts.comifoundation/450- 2000 PP€8r8)Fund $90,000 nttpstiiwww.activistfacts.com/foundation/i66- $160,000 2002 Eij1ps wv w.acti vsttacii/) hiips:iiwww.activistfacts.comifoundation/'i67- $15,000 1997 `§8i9c�tfli t3M? 1)I lhd/) haprpns.:/i]wpwt1w.a�c�tY!iv,{istfacts.com/foundationi1764- $20,000 1999 §mitt MitYr.aOaign/) hiips:iiwww.activistfacts.comifoundationi486- 2002 OtrWaasi E148/Jdation $20,000 https://www.activistfacts.comifoundation/i762- WQA8i 8ryiPbtWa YtJnVratch Program $135,000 2004 https://www.activistfacts.com/foundation/495- UnitarianU niversalistVeatchProgra m/) Contact Us Phone: (202) 463-7112 Email: Info@consumerfreedom.com (malito;info@consu merfree dam.com) Page 6 of 6 http://www.activistfacts.com/organizations/312-iowa-citizens-for-community-improvement/ 06/17/2014 WebQA - DUBUQUEIA - Melinda Rettenberger W068663-051614 - Contact Us Contact Us Details Contact Us Details Name: Phone No.: City Department: If "other!' please provide the name of the department you wish to contact: Message: R.R.S. Stewart (563) 583-4419 City Council Page 1 of 2 Waterloo passed their ordinance on 28 April. They became the 8th city in Iowa to pass a strong ordinance restricting where payday lenders can locate - and their City Council started the process of considering an ordinance AFTER Dubuque's, Due to the lack of movement at the Statehouse on payday lenders, cities across Iowa have taken action and passed ordinances to restrict the growth of payday lenders. Here's a good editorial from the Waterloo Courier - http://wcfcou rier. com/news/opinion/editorial/zoning-li mits-on-payday-lenders-seems-I i ke-a-logical- compromise/article_38e4ba88-5810-552b-b352-7bcf23ed886b.html Like Waterloo, Dubuque should pass a zoning ordinance that says new payday lenders could not open within 600 feet of an existing lender, liquor stores or bars, adult uses or any "protected uses," induding residences, churches, and schools. People with no or bad credit often think that payday loans are their only alternative to pay for unexpected expenses, but organizations in Dubuque like "bank on" are providing alternatives. Dubuque has enough payday lenders. We should encourage residents to use altematives rather than going deeper into debt and more closely regulate any new lenders. Please note: Questions or comments submitted via the City of Dubuque website are monitored during regular business hours. Message History Date On 5/16/2014 8:54:38 PM, Randy Gehl wrote: Thank you. Your request has been submitted. Track the issue status and respond at: tittn://mvaovhelo.us/DUBUOUEIA// cs/ReauestEdit.asox?rid=68663 On 5/16/2014 8:54:37 PM, wrote: Request was created by customer Request Details Reference No: Create Date: Update Date: Completed/Closed: No Required Completion Date: 5/21/2014 W068663-051614 5/16/2014 8:54 PM 6/17/2014 1:55 PM Status: Priority: New Request Medium http://mygovhelpadmin.us/DUBUQUEIA/ZAdmin/ServiceRequests/Print.aspx?id=68663 &new... 06/17/2014 WebQA - DUBUQUEIA - Melinda Rettenberger Page 2 of 2 Assigned Dept: Assigned Staff: Planning Services/Zoning Laura Carstens Customer Name: Email Address: countess14@hotmail.com Phone: Group: (Not Specified) Source: Web http://mygovhelpadmin.us/DUBUQUEIA/ZAdmin/Se>viceRequests/Print.aspx?id=68663 &new... 06/17/2014 Zoning limits on payday lenders seems like a logical compromise Page 1 of 2 ` CFCOUjWj � Zoning limits on payday lenders seems like a logical compromise APRIL 27, 2014 6:00 AM One of the duties of municipal government is to make land use decisions, keeping in mind the interests of residential neighborhoods and businesses alike. We always appreciate local government officials who are willing to listen to citizens and neighborhood associations in considering whether to take action to address their concerns. We fully supported the Waterloo City Council's efforts to staunch the proliferation of liquor stores in certain areas of the city in recent years by tweaking zoning ordinances. Last week, the City Council voted 5-2 to approve the second of three required readings of an ordinance that would limit where payday lenders can set up their businesses. First of all, the businesses are legal and regulated by the state. However, some cities have used zoning ordinances to limit locations. That seems like a logical and fair compromise. Maintaining property values is one of the most important financial issues to individual citizens. It's the single most important issue for many. The proposed zoning change would not close any of the existing 11 such businesses in Waterloo. The change could help neighborhoods that want to keep payday lenders away from citizens' homes. It would give them the right to oppose the stores if a variance is sought -- similar to the way neighbors fought a planned liquor store at Ansborough and University avenues. The new ordinance would bar payday lenders from locating in the downtown C-3 zoning district or S-1 shopping center districts. They would only be allowed in the C-2 commercial district or manufacturing zones. Under the new proposal, payday lenders could not open within 600 feet of each other, liquor stores or bars, adult uses or any of the list of "protected uses," including residences, churches, schools and others. Councilman Steve Schmitt questioned the need for new rules, saying the 11 current payday lenders are generally not located in distressed areas, and police said they rarely have calls for service to the stores. Schmitt and Councilman Tom Lind have voted against the measure in both readings. We also remain mindful of the fact that these businesses are legal and they do provide a service for many. http://wcfcourier.com/news/opinion/editorial/zoning-limits-on-payday-lenders-seems-like-a-logic... 06/17/2014 Zoning limits on payday lenders seems like a logical compromise Page 2 of 2 People with no or bad credit often find that payday loans are their only alternative to pay for unexpected expenses. Bank loans can be difficult to get for people with low incomes and poor credit histories. We can't think of a successful business that won't take your money in exchange for a product or a service. That said, there are already 11 such businesses in Waterloo. And the city would not be banning the opening of more, just limiting where they can operate. We prefer that neighborhoods maintain a voice in such discussions. All in all, the ordinance that restricts where these businesses can open seems like a pragmatic move. http://wcfcourier.com/news/opinion/editorial/zoning-limits-on-payday-lenders-seems-like-a-logic... 06/17/2014 WebQA - DUBUQUEIA - Melinda Rettenberger W068608-051514 - Contact Us Contact Us Details Contact Us Details Name: Phone No.: City Department: If "other," please provide the name of the department you wish to contact: Message: Bridget Fagan 515-707-1970 City Council Page 1 of 2 I'm looking forward to the payday work session next Monday, May 19. Wanted to let you know that Waterloo recently passed their ordinance - on Monday, April 28, making Waterloo the 8th city in Iowa to enact payday ordinances. The ordinance they adopted is similar to the other 7 enacted - restricting where they can locate. As I've stated in previous documents, we want a strong, meaningful ordinance on payday lenders in Dubuque. I'm attaching a few documents - two articles and one document that lays out ordinances enacted across the country. Thanks, Bridget Fagan CCI Organizer Please note: Questions or comments submitted via the City of Dubuque website are monitored during regular business hours. Message History Date On 5/15/2014 12:56:59 PM, Randy Gehl wrote: Thank you. Your request has been submitted. Track the issue status and respond at: httn://mvuovheln.us/DUBUOUEIA// cs/ReauestEdit.aspx?rid=68608 On 5/15/2014 12:56:59 PM, wrote: Request was created by customer Request Details Reference No: Create Date: Update Date: Completed/Closed: No Required Completion Date: 5/20/2014 W068608-051514 5/15/2014 12:56 PM 6/17/2014 2:44 PM Status: Priority: Assigned Dept: Assigned Staff: Customer Name: New Request Medium Planning Services/Zoning Laura Carstens http://mygovhelpadmin.us/DUBUQUEIA/ZAdmin/ServiceRequests/Print.aspx?id=68608&new... 06/17/2014 WebQA - DUBUQUEIA - Melinda Rettenberger Page 2 of 2 Email Address: bridget@iowacci.org Phone: Group: (Not Specified) Source: Web http://mygovhelpadmin.us/DUBUQUEIA/ZAdmin/ServiceRequests/Print aspx?id=68608&new... 06/17/2014 PAYDAY LENDING ZONING LAWS/LEGISLATION APPENDIX 1— List of Payday Lender Ordinances JURISDICTION BASIS FOR LIMITS DETAILS CITATION Birmingham, AL Moratorium PROPOSED — 9/11 Midfield, AL Moratorium No more outlets than the current 12 Summer 2011 Homewood, AL Permit Restrictions on new payday lender businesses Citation not available Mobile, AL Moratorium 6 month moratorium on payday loan outlets as of April 2010 City Code Chapter 64 Casa Grande, AZ Distance Cannot operate within 1,320 feet of same - regardless of whether same is located within city limits or another jurisdiction Title 17, Chapter 17.12, Section 17.12.415 Gilbert, AZ Distance/Permit Cannot operate within 1,000 feet of each other. Must apply for conditional use permit after going through public hearing for approval. Citation not available Mesa, AZ Permit Payday businesses must get a special permit Title 11 "Zoning", Section 11-1-6 Phoenix, AZ Distance Cannot operate within 1,320ft of each other and within 500ft of residential areas Ordinance G- 4817 Pima County, AZ Permit/Density New payday lenders not allowed to locate within 1,320ft (one quarter mile) of existing operations or 500ft. of homes or residentially zoned property. Also requires a special permit. Chapter 18.45.040 JURISDICTION BASIS FOR LIIMITS DETAILS CITATION South Tucson, AZ Zoning/Density Limited to three business zones. Cannot open within 1,000ft. of existing operations or within 500ft. of residence districts, schools, playgrounds, or parks. Application required, City Ordinance Section 24-526 Tempe, AZ Density Cannot operate within 1,320ft. of each other and 500ft. of residential areas Chapter 4, Section 3-423 Tucson, AZ Density No payday lender within 1,320 feet of same; at least 500 feet from R-3 or more restrictive zoning Article 3, 3.5.4.5. — Financial Service Youngtown, AZ Moratorium Banned in Town Limits Section 17.16.040 East Palo Alto In process La Mirada, CA Distance Cannot operate within 1,000 feet of each other. Must be 500 feet from residential areas. Hours are limited to 7am-7pm. Restrictions on building. Municipal Ordinance 2L45.010 Long Beach, CA Permit Check Cashing institutions must be located in commercial districts. Municipal Ordinance 21.15.480 Los Altos, CA Moratorium 45 day moratorium — spring 2012 Ordinance provides incentives for credit unions to expand into areas where payday lenders are prevalent No citation. Los Angeles, CA Increase credit unions National City, CA Moratorium Check cashing and payday advance business moratorium. Ordinance 2232 JURISDICTION BASIS FOR LIMITS DETAILS CITATION Norwalk, CA Distance/ Prohibition Outlets must be 1320ft. apart from each other. No more than 8 outlets in the city. Municipal Ordinance 17.04.095 Oceanside, CA Permit Requires special operating permit, payday lenders classified as adult businesses, not permitted within 1000ft. of similar businesses or within 500ft. of home, church, park, or school. Resolution 07-R0621-1 LCPA -2-07 and ZA-4-07 Oakland, CA Permit Special Permit, must not be closer than 1000ft. from another check casher/payday lender; must be at least 500ft, away from: 1) community education civic activities (schools) 2) state or federally chartered banks, savings associations, credit unions, or industrial loan companies 3) community assembly civic activities (churches) 4) liquor stores (excluding full service restaurants or liquor stores with 25 or more full time employees), Oakland Planning Code 17.102.430 Pacifica, CA Moratorium In effect until 1/2012 Pico Rivera, CA Distance/Zoning Outlets must be 2,640ft. from each other.' Zoned to certain areas. City Ordinance 1057 Redwood City, CA In process ' Changed from a year long moratorium on payday advance establishments. JURISDICTION BASIS FOR LIMITS DETAILS CITATION Rialto, CA Permit Must go before planning commission to receive approval and conditional use permit. City Ordinance 18.66.030 Sacramento, CA Distance Bans Payday Lender from being within 1000ft of another lender, check casher, church, school or bank. Prohibits new stores from opening within 500ft of homes and limits hours from 7 a.m, to 7 p.m. City Ordinance 17.24.050 San Diego, CA Zoning Restricted to commercial zones. Municipal Code Section 158,0302 San Francisco, CA Special District Referred to as "Fringe Financial Services". Outlets must be in specified districts.2 Municipal Code section 249.35 San Jose, CA Zoning Caps # of outlets at current level; new owner can move into existing lending site within 6 mo, of vacancy otherwise lender must be 'A mile from other lender and low income areas. Title 20, chapter 20.70 and chapter 20.80, sec. 20.200.875, several parts incl. 12.5 Santa Clara County, CA Prohibition Payday lenders prohibited in unincorporated areas, Santa Monica, CA Permit Must get conditional use permit South Gate, CA Special Restricts hours of operation and lists minimum security req. 2 Changed from no law concerning payday advance establishments JURISDICTION BASIS FOR LIMITS DETAILS CITATION Washington, DC Interest Rate Pay day lenders can charge no more than 24% interest on a loan not secured by real property and under $2500. DC Stat. 28-3301 Ft. Lauderdale, FL Permit City Zoning Code does not prohibit or permit check cashing serves - decision on a case-by- case basis. Special Permit required. *' Pembroke Pines, FL Permit City Zoning Code does not prohibit or permit check cashing serves - decision on a case-by- case basis. Special Permit required. *4 Columbus, GA Business restrictions/zonin g Payday lenders must have borrower database, loan caps, and a ban on multiple loans in a seven day period. Zoned to certain areas. Municipal Code Section 3.1.5 Belleville, IL Permit/Outlet Cap Outlets require permit. City limits number of outlets in city to three, Municipal Ordinance 7-24 Bellwood, IL Permit Outlets required to go through special licensing process City Ordinance section 117.187 Chicago, IL Zoning Outlets may only be in specified districts City Code Chapter 17-3 Fairview Heights, IL Permit/Outlet Cap Outlets requires permit which are limited to 2 stores within the city limits. Article XI Citation not available Citation not available JURISDICTION BASIS FOR LIMITS DETAILS CITATION Glendale Heights, IL Permit Special use permit required. City Code Title 4, chapter 1 Springfield, IL Distance Requires that outlets are at least 1500ft. apart City Ordinance Section 8155.048.1 Ames, IA Zoning Outlets must be more than I,000 ft. schools, childcare centers, other payday lenders, land zoned for residential uses, any arterial street, commercial highway zones and overlay districts. Section 29.1312, ordinance #4111 Clive, IA Des Moines, IA Moratorium Temporary 3 month ban beginning May 2010 Citation not available West Des Moines, IA DeSoto, KS Distance/Permit Requires a Permit at a cost of $250 annually. Requires that outlets are at least 5280ft. apart and 500ft. from residential districts. Periodic inspections may be made however, the inspection must be reasonable and cannot unreasonably interfere with bushiess 5 Article 5 of the Municipal Ordinances Kansas City, KS Zoning Prohibits payday lending or check cashing on parkways or boulevards. Citation not available 5 Changed from complete prohibition of Cash Advance businesses within the city limits. JURISDICTION BASIS FOR LIMITS DETAILS CITATION Shawnee, KS Distance/Permit Requires a Permit at a cost of $300 annually. Requires that outlets are at least 5280ft. apart and 200ft. from residential districts. Periodic inspections may be made however, the inspection must be reasonable and cannot unreasonably interfere with business.6 Municipal Ordinances Section 5.53.000 Smithville, KS Prince George, MD Permit Restrictions on new check cashing businesses. Municipal Code Section 27 - 341.01 Arnold, MO Permit Conditional Use Permit for "small loan business to certain commercial areas. Appendix B Zoning Bellefontaine, MO Moratorium Ban on check cashing businesses and predatory lenders. Municipal Code Section 29-9 Berkeley, MO Permit Requires that outlets (including cash advance, pawnshops and similar businesses) are at least 1400ft. and not within 300ft. from place of worship, schools, or residential zone property.? Municipal Code section 400.130(d)(19) Blue Springs, MO Permit Outlets must have permits and be in proper districts.$ Municipal Code Chapter 405 6 Changed from prohibition of Cash Advance businesses on the eastern side of the city Creates a classification for payday loan establishment different from "financial institutions." 8 Previously cited as having distance requirements however, no citation was provided and no matching ordinance was found. JURISDICTION BASIS FOR LIMITS DETAILS CITATION Fairview Heights, MO Density/Permit Must be not more than 2 payday lenders within city limits. Article XI of City Code Gladstone, MO Density One mile between outlets, 200ft. from residential area, outlet must be in a multi - tenant commercial building housing at least four separate entities, Municipal Code section 7.135.020 Independence, MO Said to have regulation similar to Blue Springs and KC. Cannot find in code. Jackson County, MO — unincorporated areas proposed Cannot be within 2500 ft. of another lender, 1000 ft of school, park, church, hospital, day care, public building or 500 ft, of a home. Jan 2012 Kansas City, MO Permit Outlets are required to have a permit. Ordinance allows city to inspect the outlets.9 City Ordinances Section 43-1 9 Changed from total ban on payday loan establishment in certain districts. JURISDICTION BASIS FOR LIMITS DETAILS CITATION City of North Kansas City, MO Permit/Distance Requires Permit. At time of establishment must be: 1) one mile apart from each other 2) must be one mile from any hotel or motel 3) must be 1000ft. from liquor store, school, religious inst., senior citizen housing dev., museum, or landmark /historic property or district 4) No accessory services may be offered 5) May not be across the street from specified residential districts 4) Applicant for new establishment must demonstrate no negative impact on property within 500ft. of proposed location 5) permit limited to 2 years. City Ordinances section 7.135,020 Oak Grove, MO Permit Outlets limited to 1 outlet per 5000 residents and requires a special permit. Citation not available St. Ann, MO Outlet Cap No more than 3 payday lenders allowed within city limits. Municipal Code Section 400.390 St. John, MO Outlet Cap No more than 2 payday lenders allowed within city limits, t0 Municipal Code section 636.010 St. Joseph, MO Density Per capital limit of 1/15,000 residents. No citation 10 Changed from creating a special licensing procedure. JURISDICTION BASIS FOR LIMITS DETAILS CITATION St, Louis, MO Density Applies to "small loan business" and check cashing establishments. Conditional land use permits required. Must be 1 mite from each other and 500 feet from residence, school, or church Municipal Code section 26.08.101; 26.08.384 St. Louis County, MO Distance Outlets must be 5280ft. apart from each other and 300ft. residential districts.11 Municipal Code section 1003.133 Valley Park, MO Permit Must obtain permit. Hours limited to 7a.m. — 9p.m. Outlets must be 1,000 feet from each other. Municipal Code section 605.340 et.seq Byram, MS Moratorium Moratorium beginning November, 2009. Citation not . available Canton, MS Moratorium Moratorium on new check cashing businesses Citation not available Clinton, MS Moratorium 90 day moratorium beginning March 2, 2010. Citation not available Flowood, MS Zoning Payday lending businesses are restricted to industrial zoned areas. Municipal Code section 207.07 Starkville, MS Moratorium 12 month moratorium beginning in 1/10.12 K 11 Changed from requiring a conditional use permit with a public hearing. 12 http://www.mpbonline.org/news/story/cities-crack-down-new-payday-lenders JURISDICTION BASIS FOR LIMITS DETAILS CITATION Clark County, NV Permit/Density Special use permit required. May not be within 200ft. of residences. Must be 1000ft. from other financial institutions, auto title loan businesses, and pawn shops. Restricted hours. Municipal Ordinance Title 19.06 Henderson, NV Distance Outlets must be 1000ft. apart and 200ft. from residential district.t3 Municipal Ordinance section 19.4.3 Las Vegas, NV Permit/Density Special use permit required. May not be within 200ft. of residences. Must be 1000ft. from other financial institutions, auto title loan businesses, and pawn shops. Restricted hours. Municipal Ordinance Title 19.06 North Las Vegas, NV Distance Outlets must be 2500ft. apart from each other (or like business) and must be 500ft. from residential distriets.14 Municipal Ordinances Chapter 17.24(25) Hackettstown, NJ Permit Payday lenders must get permission from city council to open downtown. Citation not available 13 14 Changed from a 6 month moratorium on new payday lenders which started on July 2005 JURISDICTION BASIS FOR LIMITS DETAILS CITATION Clayton City, OH Permit/Distance Permit is required and operation hours are confined to 8 a.m. till 6 p.m.. The loans given: must not exceed $500, must be less than 6 months, the interest rate must not exceed 36%, and all terms and conditions must be written. Outlets must be 1000ft. apart and 1000ft. from residential districts. Municipal Ordinance 1124.93 Cleveland, 011 Density Ordinance limits outlets to one per 20000 residents, must be at least 1000ft. apart. Citation not available Cuyahoga Falls, 011 Density Ordinance limits outlets to one per 10,000 residents, must be at least 1000ft. apart. Citation not available Lakewood, OH Density/permit Ordinance defines number of terms and limits location of payday loan business. They cannot be within 750ft. of any other payday loan or similar business. Municipal Ordinance 1365- 2006 Parma, OH Density/Prohibiti ons Stores cannot exceed one per 10,000 residents or locate within 1,000 feet of same. Limited to certain zoning districts. Chapter 1170 Xenia, OH Distance/Zoning/ Permit Outlets must be 5,000 ft. apart, restricted to certain zones, and a permit is required Municipal Ordinance 1294.21 JURISDICTION BASIS FOR LIMITS DETAILS CITATION Oklahoma City, OK Zoning Restricted to certain zones. Municipal Ordinance 8300.57 Beaverton, OR Loan Restriction Borrower may cancel loan within close of next business day with restrictions. Lenders may not renew loans more than twice. Lender may not renew unless borrower has paid at least 25% of principle plus interest on balance. After max number of rollovers, lender shall allow borrower to convert to payment plan prior to default with no additional fees assessed. Passage of 2007 Oregon state law capping rates at 36% had no effect on local ordinances. Title 7, Chapter 7.12, Sections 7.12.005 - 7.12.060 Bend, OR Loan Restriction Same as Beaverton, OR Chapter 7, Sections 7.850 - 7.895 Eugene, OR Loan Restriction Same as Beaverton, OR Chapter 3, Sections 3.550 - 3.560 Gresham, OR Loan Restriction Same as Beaverton, OR Chapter 9, Sections 9.90.010 — 9.90.110 Oregon City, OR Loan Restriction Same as Beaverton, OR Title 5, Chapter 5.32, Sections 5.32.010 — 5.32.100 Portland, OR Loan Restriction Same as Beaverton, OR Title 7, Chapter 7.26, Sections 7.26.010 — 7.26.110 JURISDICTION BASIS FOR LIMITS DETAILS CITATION Troutdale, OR Loan Restriction Same as Beaverton, OR Title 5, Chapter 5.06, Sections 5.06.010 — 5.06.110 Pittsburgh, PA Density Operating hours restricted. Cannot locate within 1,000 feet from same/pawn shop/gaming enterprise or within 500 feet from residential zone. Chapter 911, Section 911.04.A.93 Providence, RI Prohibition Restrictions on any city dealings with predatory lenders Municipal code section 2-18.2 Easley, SC Cap Restrictions on new payday lender businesses. Citation not available Greenville, SC Density Cannot locate less than 3,000 feet from same. Location must be in a shopping center/grocery store which has a minimum of 30,000 square feet. Lender cannot have separate exterior access. Chapter 19, Article 19-4, Section 19 - 4.3.3(D)(6) East Ridge, TN Studying check cashing outlet restrictions Citation not available Memphis City and Shelby County, TN Distance Outlet must be 1000ft apart and 1,320 from residential or landmark district. Appendix A (24) Nashville, TN Zoning Zoning restrictions. Ordinance BL2008-169 15 151n East Nashville lawsuit filed by title lender Tennessee Quick Cash in June 2010 JURISDICTION BASIS FOR LIMITS DETAILS CITATION Austin, TX Distance/ Prohibited District/ Loan restrictions Loan restrictions same as Dallas, zoning: outlets cannot be within 1000 ft of each other, within 200 ft of property with resident' zoning, within 500 ft of rights-of-way for I-35 and other listed highways, no outlets in specified overlay or boundary areas. Brownsville, TX Moratorium 6 month moratorium running through 5/10 Dallas, TX Loan restrictions Requires registration with city, outlines maintenance of records, cannot loan more than 20% of customer gross monthly income, installment payments cannot exceed 4, and 25% or more of each payment must go toward principle, no rollover of installment payment loan; lump sum payment loans cannot be rolled over more than three times, proceeds from rollover must be 25% or more toward principle, no refmance or renewal, less than 7 days = rollover. Chapter 50, Article XI, adding to sections 50-144 through 50-151.3 Fort Worth, TX 2006? Garland, TX JURISDICTION BASIS FOR LIMITS DETAILS CITATION Irving, TX Distance Outlets must be 1000ft. apart from each other and more than 200ft. away from residential district.16 Municipal code Section 52-35 Little Elm, TX Distance/ Prohibited District Outlets must be 1000ft. apart from each other and must be 500ft from residential districts. Outlets are prohibited in town center and must be a free standing structure Municipal Code Section 106-7 Mesquite, TX Distance/ Prohibited District Outlets must be 1000ft. apart, in freestanding buildings, at least 200ft. from residential areas and 500ft. from freeways. Cannot be in special "overlay" dist. Municipal Code Section 3-505 Richardson, TX Distance Outlets must be 1000ft. apart,17 Municipal Ordinance Supplemental regulations for certain uses section 9 Sachse, TX Permit/Distance/ Prohibition Permit required. Payday Cash advance business (and like businesses) must be 1000ft. apart. Outlets are prohibited 500ft. from city line and George Bush Highway. Additionally, a cap of 36% annually is put on loans.18 Municipal Ordinance Article 3 section 11 16 Changed from no statutes concerning payday lenders 17 Changed from limit on number of outlets 18 Changed from requiring only a pennit JURISDICTION BASIS FOR LIMITS DETAILS CITATION San Antonio, TX Permit Requires outlets to get special authorization from city council. Operating hours are controlled by city council and no outdoor service is permitted. Municipal Codes chapter 35 American Fork, UT Density Limited to 1/10,000 residents Municipal Code chapter 5.30 Brigham City, UT Density Cannot locate within 5,280 feet of same inside or outside city limits. Stores cannot exceed one per 10,000 residents. Title 29, Chapter 29.13, Section 29.13.020 Logan, UT Density Defined as "nondepository lender" and restricted to 1/10,000 residents Municipal Code 5.19.020 Murray, UT Moratorium Payday lenders not permitted in mixed use zone. Title 17, Chapter 17.146, Section 17.146.020 Ogden, UT Density Limited to 15 outlets. Must be 1,000 ft from each other and 660 ft from pawnbroker or sexually oriented business. Must have sign that says that short terms loans should not be used as a long term solution Not yet codified — passed 6/10 Orem, UT Density Cannot locate within 1/2 mile of same. Stores cannot exceed one per 10,000 residents. Chapter 22, Article 22-14, Section 22-14-21 Riverdale, UT Permit Requires conditional use permit, only allowed in C3 zones Roy, UT Moratorium No new payday cash advance business. Article from Standard- Examiner JURISDICTION BASIS FOR LIMITS DETAILS CITATION Salt Lake County (unincorporated) . Density Stores cannot exceed one per 10,000 residents. Title 5, Chapter 5.73, Sections 5.73.010 — 5.73.030 Sandy, UT Density/Zoning/D istance Outlets must be 5,280 ft from each other. Limited to 1/10,000 residents. Conditional use permit. Zoned to certain areas. Chapter 15A-11- 20 South Salt Lake City, UT Density Cannot locate closer than 600 feet of same or residential zone. Stores cannot exceed one per 5,000 residents. Title 17, Chapter 17.26, Section 17.26.030 South Jordan, UT Density Cannot locate within 1 mile of same. Title 17, Chapter 17.52, Section 17.52.030 Taylorsville, UT Density Cannot locate within 600 feet of same. Stores cannot exceed one per 10,000 residents. Title 13, Chapter 13.04, Section 13.04.103 West Jordan, UT Density Cannot locate within 1,000 feet from same. Maximum of 12 stores allowed in city. Title 13, Chapter 13.5, E-5 West Wiley City, UT Density Cannot locate within 600 feet of same. Stores cannot exceed one per 10,000 residents. Title 7, Chapter 7.1, Section 7.1.103 Burlington, VT Zoning Does not allow check cashing Chesterfield County, VA Zoning Stores cannot have separate exterior entrance. Limited to certain commercial zones. Chapter 19, Sections 19.145 & 19.175 JURISDICTION BASIS FOR ]LIMITS DETAILS CITATION Norfolk, VA Permit Must receive permission form the city council in the form of "special exception use" permit Chapter 6-4 Green Bay, WI Density Cannot locate within 5,000 feet of same or 150 feet of residential zone. Cannot operate between the hours of 9 p.m. — 6 a.m. Chapter 13, Section 13.1606 Madison, WI Density Cannot locate within 5,000 feet of same. Chapter 28, Section 28.09 Milwaukee, WI Density Cannot locate within 1,500 feet of sante or within 150 feet of residential zone, Subchapter 6, Section 6.295.603 Racine, WI Density Cannot locate within 2,500 feet of same or within 250 feet of residential zone. Chapter 114, Article V, Division 3, Section 114.468 Superior, WI Zoning/Density Limited to commercial highway zones only. Cannot locate within 2,500 feet of same or within 300 feet of residential zone. Stores cannot exceed one per 5,000 residents. Hours of operation limited to 8 a.m. —10 p.m. Chapter 122, Article V, Section 122.614 Wauwatosa, WI Density Cannot locate within 2,500 feet of same or within 250 feet of residential zone. Cannot operate between the hours of 9 p.m. — 9 a.m. Title 24, Chapter 24.46, Section 24.46.100 West Allis, WI Distance Outlets must be 3,000 ft apart and restricted to regular business hours City Ordinance 9.32 and 12.43