DC Council Zaps “Alien Species” (Payday Lenders)

Mark Winston Griffith

DC Council Zaps “Alien Species” (Payday Lenders)

The Washington DC council boldly stood up to the payday lending lobby yesterday and essentially made usuriously priced short term loans illegal in the Chocolate City. With a vote of 12 to 1 the Council mandated that payday lenders be subject to the same lending rate caps as credit unions and banks. The sole dissenting vote came from disgraced ex-DC mayor, Marion Barry, who, believe it or not, actually co-sponsored the legislation in the first place. Talk about being on the wrong side of history.

According to a news brief released by the Center for Responsible Lending:

An exemption granted to DC payday lenders in 1998 allowed them to ignore the 24 percent usury cap. Since that time the industry has burgeoned in the District to the point that borrowers have been paying about $3 million per year in fees, as payday lenders trap them in loans with 350 to 550 percent interest rates.
Before the final vote, DC council members made clear their contempt for an industry that preys on working people who are just getting by.

"It's like an alien species let loose in our midst," said Councilmember Mary Cheh after yesterday's final reading in the Council chambers. "They deprive people of the opportunity to get a toehold, to get ahead. They steal money, they steal futures with their practices."

Although payday loans are illegal in New York, they ravage many other states throughout the country. The action taken by the DC Council will hopefully embolden other states to similarly protect low-income communities.

Posted at 7:00 AM, Sep 21, 2007 in Economic Opportunity | Permalink | Comments (2)

Comments

Woah. Why did Councilman Barry change his stance? That's weird. I mean he does so much press stuff, he must have offered some sort of explanation? I'm sure that the majority of the payday lenders are in his district in fact. At least that's the way it looked last time I was in Anacostia.

At least it passed.

Which is more than I can say about the effort to finally give DC residents a vote in congress. That bill just failed despite a compromise attempt that would have given an extra congressional seat to Utah in exhange for letting DC's congressmembers actually vote. Apparently we can only have taxation with representation for certain kinds of Americans.

When I was younger DC used to have potholes the size of cars in the streets but these days the streets look a little more like they are part of America. Shame DC residents don't have the same rights as Americans. So disgusting and racist. Now that's being on the wrong side of history.

Unclear why Barry switched his vote, but the reason he gave is that he was concerned that people wouldn't have any other place to go for small, short-term loans. That's an argument used routinely by the payday lending industry, that they are serving a need, so I can only speculate that the payday lending lobby got to him.