Council voices support of payday loan regulation

Despite the lone dissention of Councilman Russ Kemm, the Nevada City Council united with a 4-1 vote to authorize the mayor to send a written letter to State Rep. Barney Fisher encouraging him to support legislation limiting the interest rate pay-day loan companies are allowed to charge.

Nevada Mayor Bill Edmonds indicates in the letter that other cities have taken action themselves toward the regulation of such businesses, but believes the responsibility for such regulation should happen in the state legislature. Such legislation has been introduced in Missouri before but has failed, Edmonds' letter says.

In February, Missouri Attorney General called for legislation as well, citing a Jan. 17 report from the Missouri Division of Finance, which indicated that payday loan businesses in Missouri charged an average annual percentage rate of 422 percent in 2006. The Attorney General's Office indicated the report also says there are now 1,545 licensed payday loan businesses, an increase of 347 from the previous report, issued in 2005. In addition, a study by the Center for Responsible Lending showed that Missourians paid $317 million in fees and interest on payday loans in 2005, second only to California nationally.

Kemm told the council that although he is not in favor of the pay-day loan businesses he also does not like having the government determining what businesses people have access to.

"Rather than legislate, why not educate the people?" Kemm said.