It is beyond debate that payday lenders prey on the poor.
Someone taking a two-week loan of $300 pays a $45 fee, leaving $255 in cash -- and an annual interest rate of 460%. If a borrower's check bounces, the lender can tack on a returned-check charge, usually $15.
Unable to pay their bills, families return again and again. A federal study released this year of more than 15 million payday loans found that only 13% of payday borrowers took out one or two loans annually.
It's also beyond debate that Fresno, one of the poorest urban communities in the nation, has more than its share of payday lenders. In fact, Fresno County was cited in 2009 as having the most per capita among California's large counties.
To his credit, then Fresno City Council Member Brian Calhoun tried to put the clamps on these debt traps for the vulnerable in 2008 by proposing a 45-day moratorium on new payday loan businesses. He also asked the Legislature to cap interest rates at 36%. Calhoun mustered four votes, but the moratorium required a supermajority.
The Legislature, meanwhile, has repeatedly shown that it is in the hip pocket of the payday loan industry.
Fifteen states and the District of Columbia have caps on payday interest rates. In 2007, Congress established an annual rate ceiling of 36% for loans to active military members and their families. But California's lawmakers repeatedly have failed to protect the state's poorest citizens from payday loan vultures.
On Thursday, the Fresno City Council will take another crack at reining in payday lenders. District 3 Council Member Oliver Baines is asking that the city establish zoning and use regulations for new payday lenders. These proposed rules would require them to obtain a conditional use permit before opening and be separated by a minimum of a quarter mile from other payday loan shops.
In support of his proposal, Baines points out that there there were 67 payday lenders in the city at the end of 2012, and that they generated minimal business taxes -- just $22,603 on gross receipts of $17.8 million for the 12-month period ending in March of this year.
Baines also says that 90% of the payday lenders in the city "are corporations in other parts of the state and the country, so that these lenders' profits end up reinvested in economies others than ours."
A March 2013 study by Tim Lohrentz, program manager for the Insight Center for Community Economic Development, an Oakland-based nonprofit, estimates that Fresno suffered a net economic loss of at least $3.6 million from payday lending in 2011.
Fresno requires conditional use permits for banks, savings and loans, credit unions, pawn shops and jewelry-and-loan businesses. At a minimum, the city should demand the same of new payday lenders and also require them to be at least a quarter mile from their competitors.