Payday Loan Times

Last month, the De Soto City Council took action its members hoped would prevent the spread of payday cash loan and title loan companies to the city.

Somehow, the proprietors of such Kansas businesses have overlooked De Soto, although their businesses and the busy, gaudy signs that announce them are common enough in cities that border De Soto to the east and south.

The De Soto City Council is generally receptive to business and the short-term loan industry joins adult entertainment as the only category of business the city has actively attempted to discourage. The preemptive action against instant payday loans probably was much more needed as the city is home a significant underclass population on which the industry thrives.

Those engaged in the faxless payday advance industry maintain they are merely providing a service to consumers shunned by traditional lenders. And it’s true the friendly Mom and Pop store willing to extend credit for groceries or other necessities no longer exists.

But state law allowing cash advances with interest rates of 15 percent, finance charges of $15 and an A.P.R. rate of 390 percent on a 14-day loan of up to $500, consumers walk away with most of their next paychecks that were supposed to repay the loans already spent. That sets them up for an endless cycle of loans that nip away at weekly budgets and it erases any thought of savings for a better future.

It may be a vain hope, but perhaps the absence of the businesses here in De Soto will encourage those who find themselves short at each pay cycle to take advantage of budgeting help offered by different organization, including the De Soto Multi-Service Center, so that they become better educated on how to get the most for their money.