Council approves ordinance affecting lenders
The ordinance was unanimously approved. It will go into effect in about two weeks.
According to Granite City Attorney Brian Konzen, the intent of the ordinance is to keep the current number of payday loan lenders in town at four and require them to maintain licensing guidelines required through state statute.Payday loan lenders, in part, are defined in the ordinance as lenders charging an annual percentage rate of 36 percent or more in a time period that does not exceed 21 days, accepts one or more checks dated days prior to deposit, accepts authorization to debit consumer bank accounts and accepts an interest in consumer wages.
The ordinance states that any person, firm or association licensed to conduct payday loan lending that accepts items in exchange for cash or for title or property in exchange for cash would be subject to fines up to $750 through the city’s municipal court system.
Konzen said the ordinance creates new licenses for payday lenders in which they can not operate in Granite City unless they provide a state license to the building and zoning department recognizing them as payday lenders.
Payday lenders often do business with the poor in need of money and have been referred to as predatory lenders.
About three years ago, a business that wanted to locate in Nameoki Commons shopping center lost its battle with the city to locate in that part of town. City officials considered the business a payday loan establishment.
