Sponsor
Aldermen Weidner, Helding and Wisneski
Title
90 DAY MORATORIUM FOR CONVENIENT-CASH BUSINESSES
WHEREAS, the City of Racine has experienced a proliferation of "convenient-cash" businesses and similar businesses such as check-cashing businesses, payday loan stores, etc., that make non-traditional, short-term consumer loans; and
WHEREAS, "usury" is an unconscionable and exorbitant rate or amount of interest, and the presence of a usurious rate makes a loan agreement unethical or sometimes illegal, in whole or in part; and
WHEREAS, instead of offering a product that enables borrowers to escape emergencies, payday lenders 'flip' borrowers, renewing their loans repeatedly for high fees without extending further credit, which traps borrowers into paying back many times the amount of the original loan at annual interest rates that are typically 400 percent or higher; and
WHEREAS, the clustering of payday loan agencies in and around economically disadvantaged neighborhoods causes severe financial problems for the residents of those communities; and
WHEREAS, research has shown that such businesses target minority neighborhoods; and
WHEREAS, convenient-cash businesses, because of the frequency of cash transactions and the amount of money exchanged, are attractive to criminals seeking to commit robberies; and
WHEREAS, the health, safety and welfare of Racine residents should be protected by legislation limiting the geographic concentration of convenient-cash businesses and similar establishments and the proximity of such establishments to residentially-zoned areas.
NOW, THEREFORE, BE IT RESOLVED, that the Common Council of the City of Racine hereby imposes a 90 day moratorium upon the granting of any occupancy permit for a convenient-cash business or similar establishment to provide time for the Common Council to develop and implement ordinances containing appropriate restrictions for the establishment of such businesses.
FISCAL NOTE: N/A