Once more, zoning issues are being reported in the news and this time it relates to payday loans in Iowa. The Zoning commission wants to regulate where payday lending companies can be located. Their research has shown negative effects on towns near their locations.
The concept of direct online payday loans is not what researchers are looking on. The locations of payday loans stores are what is being looked at. The staff of the Iowan zoning commission is suggesting that payday loan stores be restricted to commercial zones only, have a minimum of 1,000 feet between similar properties and never be put near neighborhoods which may be adversely impacted by their location. What it boils down to is restricting the number of stores that can be opened while keeping them away from low income areas.
Investigators have looked at why low-income residents are taking out some many of these loans. The state zoning commission believes the ease of getting these loans, store locations, and targeted marketing to specific neighborhoods supports irresponsible lending practices, like borrowing money for extravagant spending which wouldn't be spent otherwise. The prime rate of interest for payday loans which are not paid off within the short-term period in which they are scheduled, adds extra financial demands that low income people cannot afford.
The commission did touch upon responsible borrowing when the problem of individuals requiring to live within their means was addressed. Once again though, the concept that the payday loans lenders are giving out loans too easy was discussed.
The ease of access to online low cost payday loans doesn't target any one city demographic, but are just as available if not more so than store locations. The qualifications will vary and it might be keeping many people from using them. Rather than getting a check to sign over to the company, the online procedures will request a bank statement to be able to see recent activity. It will hold some accountability to the consumers and any good responsible online payday loan lender will deny applications according to their ability to satisfy qualification standards.
Consumers should be educated on how to take care of finances sensibly. There's only so much blame that can be put on just payday lenders or borrowers of these loans. Of course there are payday loan companies taking advantage of consumers. This needs to be stopped. For the companies that work hard to give honest loans, they should be put in a different category. Ongoing efforts by both sides will hopefully produce a better financial relationship between both.
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