Officials in Iowa City, Iowa are hoping to regulate where short term loan operators can open storefront locations.
According to The Gazette, Iowa City Council has already voted once to prohibit these short term lenders from establishing facilities within 1,000 feet of daycares, churches, schools and parks. The council will have to listen to two more readings and vote on each before the ordinance can be passed. The city does not want to completely forbid short term loan companies from operating within the area, as there are already five operators within Iowa City lines. Opponents of the potential law have told the council that these lenders provide financial services to many local consumers who otherwise would not be able to obtain loans. Short term loans are on the rise throughout the country, as many Americans use them to cover necessary and emergency expenses. A recent study by The Pew Charitable Trusts found that approximately 12 percent of consumers took out a short term loan in 2010. Online lenders are gaining popularity, as nearly one-quarter of borrowers have used internet companies to access alternative financial options.