Payday Loan Times

The Overland Park City Council on Monday night agreed to rein in payday cash loan stores, which have more than tripled in the region’s biggest suburb since 2005.

The council voted unanimously to impose a one-mile limit between new no fax cash advance stores and require the existing ones to register with the city and pay a yearly $1,000 licensing fee.

The law, which also extends to car title loan stores, would keep the shops at least 200 feet from residential areas.

City officials want to stop the proliferation of the stores, which they say take advantage of customers with high interest rates and present the appearance of blight.

Overland Park is one of between 50 and 60 cities across the nation that have taken steps to corral fast payday advance stores, said Christopher Peterson, a law professor at the University of Florida who has studied the payday loan industry.

But Peterson questions how effective zoning laws are at addressing the problem, saying that states are often in a better position to do things such as limiting interest rates charged by personal cash loan shops.

City Councilman Terry Goodman, who led the payday loan initiative, acknowledged that zoning laws might not stop residents from using payday loans stores already in the city. He agreed that the state needs to take charge.

There was an effort to limit interest rates on savings account payday loan stores in the Kansas Legislature this year, but published reports indicated that the measure may not succeed this year.