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New State Program Would Curtail Pay Day Loan Firms
BY CAROL ARNETT
The Florissant City Council heard from State Representative Michael Spreng about a new program the state legislature is developing to combat payday loan establishments.
Spreng represents the 76th district, which includes parts of Florissant. He serves on the House Special Committee on Financial Institutions.
“The problem has been that banks and financial institutions do not make the small loans that payday loan companies do,” Spreng said. He said that the Committee on Financial Institutions had worked to find a way to offer small loans. “Credit unions are willing to take small loans, up to $500,” Spreng said.
Spreng said the credit unions would offer the loans for up to 90 days. While a payday loan establishment can charge up to $108 dollars interest for a $500 loan, the credit unions would charge $48 interest on the same loan.
In addition, Spreng said, the credit unions will offer savings accounts to individuals taking out the loans. “We want to encourage having a savings account instead of having to take out a loan” Spreng said.
The problem with the payday loan establishments, Spreng said, is that “people that can least afford the financial burden of excessive interest have not where else to go.” Unfortunately, Spreng said, “there is a need for payday loans, and the rollover fees and interest are excessive.”
“Hopefully, this will be implemented in the middle or latter part of this year,” Spreng said.
In other news, Mayor Robert Lowery said that the developer of the Parker Road – New Halls Ferry intersection was meeting this week with the owner of Plaza Madrid, and Lowery hoped to see progress in the area soon.
In other matters, the council:
o Postponed a public hearing that was scheduled regarding a request by Ruiz restaurant to allow for a face change and electronic reader board for the restaurant at 901 North Highway 67. No representative from Ruiz was present.
o Passed a bill authorizing a special use permit for Sundome Tanning Salon at 111 Flower Valley Shopping Center.
o Passed a bill authorizing a special use permit for Pirates Cove bar and grill for a sit-down, carry-out restaurant at 468, 470, and 472 Howdershell.
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