Payday loans won’t go away

Ridgeland may have struck a blow against the predatory payday lending business, but be sure the practice will not go away quietly, in Mississippi or anywhere else.

The City of Ridgeland’s stricter requirements for new payday lenders, pawnshops and other businesses went into effect last week.

The restrictions, among other things, prevents such businesses from coming within 2,000 feet of each other and not exceed 3,000 square feet or combine into a single office to sidestep the new rules.

The effort in Ridgeland isn’t alone as Clinton’s planning commission is considering a mandate to place the businesses in a preapproved site.

The industry reputation is like that of strip clubs, “adult” or other unwholesome business, with cities and towns casting them out where what they do can’t be seen.

Ask the average person about payday loans and the answer would be something like New Mexico Lt. Gov. Diane Denish, who has promised to outlaw the practice. She believes the industry “is stripping the wealth from struggling New Mexico families.”

Rankin County is developing a long-range plan to deal with the issue of what it calls “blighted businesses.” Meanwhile, Starkville, Flowood, Madison, Pearl, Jackson and Canton either have ordinances against payday lenders or are working on them.

While eliminating the services sounds good, demand isn’t going away.

“If you talk to any banker, they’ll tell you (the payday industry is) doing a service (banks) don’t want to do, and if you over-regulate them and they go under, you’re hurting the consumer,” Rep. David Norquist, D-Cleveland, told the MBJ.

Scott Hamilton, whose The Great River Group represents Borrow Smart Mississippi, a group of payday lenders, told us Mississippi has “one of the strongest, most consumer-friendly regulatory schemes …”

That may be true and what Norquist says is almost certainly true. But the payday loan industry isn’t a humanitarian organization. It’s about making money, and making money at the expense of those who are already in financial distress. It’s a fine line, and one for which an answer isn’t obvious.

But when Hamilton used the word scheme, he is using a word we believe is completely accurate.