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Iowa City council moves on payday lenders ordinance

BY NATE OTJEN | SEPTEMBER 05, 2012 6:30 AM

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The Iowa City City Council voted unanimously Tuesday night to approve the second consideration of the payday-lending ordinance.

The ordinance requires payday-lending institutions to be at least 1,000 feet away from churches, schools, and daycares, among other places.

Payday lenders allow people to take out short-term loans between paychecks and pay the business back with interest after they receive their next paycheck. Many people consider them to be predatory lenders because they charge interest rates that are too high to pay back in the time they are due and people’s debt can easily spiral out of control until it’s unmanageable.

The council unanimously approved the first consideration of the ordinance on Aug. 21.

Several cities throughout the state such as Des Moines, West Des Moines, Clive, and Ames have all recently passed ordinances restricting payday lenders’ services.

Credit unions and banks will not be regulated, because delayed deposit services will not be affected under this ordinance.

An ordinance requires three votes on the issue in order to pass with one more vote left on this issue in order for it to become law.


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