Payday lenders may get rude welcome to East Palo Alto

[Donnachaidh]

http://www.mercurynews.com/peninsula/ci_19237295

When East Palo Alto officials learned this summer that the city's only bank was closing, they feared payday lenders would swoop in to fill the void, Mayor Carlos Romero said.

As it turned out, another financial institution, the San Mateo Credit Union, opened its doors in October, less than two months after California Bank & Trust closed its. And while there still aren't any payday lending outlets in East Palo Alto, the city tonight will discuss whether to draft regulations in case some might eventually try to locate there.

"I would like to at least look at the possibility of preempting these usurious rates by predatory lenders," Romero said.

Payday loans, also called "cash advances" or "deferred deposits," are short-term transactions that allow a borrower to write a postdated check to a lender, who provides immediate cash. The check is deposited on the borrower's next payday, according to a memo to the city council from Interim City Attorney Valerie Armento.

More at the link --