Des Moines is home to plenty of people who have turned to payday loans for help with their financial needs. However, the city has also been a leader in movements that have worked towards limiting or banning these types of loans.
How did payday lenders come to the city?
Starting with simple loans to farmers, payday lenders move into the space for their long hours and hard work. These loans are then offered to unskilled laborers on a small scale, who later bring in their friends and relatives. Then they expand outside of Des Moines and create payday loan stores all over the country.
Des Moines was one of the first cities to establish payday lenders because it took time for the groundswell of people that would need quick cash. That was also when it became possible to make a living by serving a niche of people with low-interest loans.
Why did Des Moines start banning payday loans?
The City Council of Des Moines passed a ban on payday loans in December 2018. The council hoped that this would reduce the number of ulcers, asthma, and depression that can be caused by debt. Many people who take out these loans are required to repay 2.5 times their borrowed amount within two or three months. This was too much for some people as they only had two or three weeks to repay the loan and were forced into bankruptcy or liquidation of assets. Due to the concern over public health and safety, the city decided to ban these types of loans in order to keep people from having to go through that much hardship every month.
In order to reduce the effects of payday loans on the Des Moines, Iowa community, the city council passed an ordinance in July 2016 banning payday loan businesses from operating within city limits. This move was prompted by the increase in rates of payday loan use and debt among residents. There are other reasons for this ordinance including research that shows that payday loans lead to a higher risk of suicide.
What are the effects of payday loans on their customers?
For years, we have seen payday loan advertisements. They are quick and easy loans that can get people the money they need to pay their bills. However, the actual effect of these loans is different from what the public has been told about them. In fact, many of these loans lead to a cycle of debt and over-borrowing. Now that you know more about how these types of loans work, be careful about who you borrow from!
According to the US Federal Deposit Insurance Corporation (FDIC), payday loans increase the risk of borrowers becoming delinquent on their repayments. “Payday lending can result in a cycle of debt that is hard to escape,” says FDIC’s deputy director, Ben Pruitt.
The accessibility argument
Local payday loans are becoming more and more popular because they allow people to take out small loans in the comfort of their homes. A lot of people in Des Moines have found themselves struggling because they have no access to credit cards or other means of taking out a loan outside of their local area. This can mean that Des Moines residents are having to borrow money from friends, family, or even illegal sources in order to meet their financial needs.
In order to opt for a payday loan, you have to be able to prove that you are not in an active state of bankruptcy. All it takes for a judge is for the applicant to show up with their last two pay stubs and a photo ID. To qualify for these loans, the applicant must have a bank account or be able to deposit their money into it.
The federal government’s response to the payday loan industry
The payday loan industry has been around for a while, but recently it became public knowledge that many of their loans come with extremely high interest rates. In response, the federal government has enacted new regulations that place stricter limits on the industry.
Recently, the payday loan industry has drawn criticism from a variety of groups and organizations. Some argue that the payday loan industry is predatory,while others say that it helps low-income families who don’t have access to other financial options. The federal government has recently taken steps to try and regulate the industry.
Conclusion
Payday loans des moines provides a quick way to get money fast. However, it’s important to remember that you can get in more trouble by using payday loans than you are saved from.
Payday loans Des Moines, Iowa. Payday loans are not a solution to your financial problems. If you feel that you need an emergency loan, please contact your bank so they can help you in the best way possible.