Cedar Rapids, Iowa, is the latest in a series of cities proposing restrictions on where payday lenders are allowed to conduct their business, and how many can operate within a certain geographic area. City Council member Monica Vernon supports the measure as a way to keep “predatory” businesses out of newly developed communities and to limit their visibility in high-traffic parts of town. It seems she finds these businesses shameful, and it sounds a bit like the “not in my backyard” rule.
Not everyone on the City Council agrees with the measure to restrict the locations of payday lenders. Members Scott Olson and Pat Shey expressed concern. The proposed that the idea represented “social engineering,” a policy, much like gentrification, that seeks to direct a neighborhood in a certain direction and dictate behaviors that are and are not deemed okay. Shey brought up that many who seek payday lenders don’t have cars, and if the businesses are forced to move out of the neighborhood, they may not have a ready source of cash. He also mentioned that these people may be underserved by banks and have little or not other options.
It’s probably no secret to you that payday lenders don’t often seek out the most prime real estate for their storefronts. Often, they choose spots that would otherwise be hard to fill by other retailers. This brings up the concern that a sea of empty storefronts may be an unintentional result of these restrictions, costing building owners thousands in lost rental income.
In a perfect world, no one would need to use payday lenders. No one would need to use lenders at all. Everyone would have all of the funds they needed. However, the world isn’t perfect and is not likely to be anytime soon. All businesses operate on the principles of supply and demand, whether they are deemed “pretty” or not.
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