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Des Moines Declares A Moratorium On Payday Lenders
A moratorium on payday lenders and pawn shops has been declared throughout the city by the city council of Des Moines, Iowa. The purpose of it is to restrain new businesses of that type from setting up shop in the city while regulatory legislation is considered. No new payday loan stores or pawn shops may open for the next six months in Des Moines. While the Iowa legislature is considering legal restriction on payday lender, the federal government is considering the same thing as part of the financial reform bill.
Des Moines Payday lenders blamed for urban blight
The Des Moines City Council has put a temporary halt to any new payday lenders, according to the Des Moines Register, to mull over some potential changes in zoning code along with potential financial regulation changes. Payday lenders are blamed to be the cause, or at least associated, in urban blight.
New zoning possibilities
Proposed zoning laws are currently being looked at by the Des Moines City Council. There may be distance requirements between payday lenders and pawn shops, such as those that already exist for liquor stores and bars in Des Moines. Concerns are being raised that more payday lenders and pawn shops in the area would negatively impact the Des Moines area, especially real estate. This will not be the first time the urban blight argument has been raised.
Consider the Urban Blight argument
Payday lenders have been accused of being the cause of urban blight, or urban decay. Of course sometimes there are payday lenders that do business in decaying areas, but it isn't proven whether this is a mere coincidence rather than causality. For instance, urban decay in Detroit has been tied to the decline of the auto manufacturing industry. Jobs shifting away from manufacturing plants and resulting urban decay was flowing well before payday lenders showed up. The exact same thing happened in other areas well before payday lenders opened their doors -- and apparently, no one has ever heard of the Rust Belt before.
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