Payday and auto title lenders aren’t welcome in Menlo Park.
And lest they not get the message, the City Council approved an ordinance Tuesday night to keep them out for good.
The lenders provide quick cash with very high interest rates or offer loans in exchange for the title to a vehicle. The borrowers in most cases have low incomes or poor credit, or both.
In California, the average annual percentage rate for payday loans in 2010 was 414 percent, according to a staff report.
“Those are the types of businesses that prey on the most vulnerable, financially, which would be in the Belle Haven community,” police Commander Dave Bertini said. “That’s why we have spearheaded this, because this is a crime prevention and quality of life issue.”
In unanimously approving the ban, the council made permanent a temporary moratorium that was set to expire on Sept. 28. Payday lenders now will be listed as a public nuisance in the city’s municipal code and considered “a menace to the public health, safety and welfare of the community.”
Bertini suggested that a pamphlet be published in English and Spanish to educate people who might typically approach loan sharks and steer them toward other financial services.
The preemptive strike against payday lenders — none currently operate in the city — was backed by letters of support and public comments by members of JobTrain, California Reinvestment Coalition, Ravenswood Family Health Center and Silicon Valley Community Foundation to name a few.
“This is, for me, a no-brainer,” Councilman Rich Cline said. “Without question, anything that we can do to, let’s just say, barricade our community from any type of predators, any type of crime.”
Email Rhea Mahbubani at rmahbubani@dailynewsgroup.com or follow her at twitter.com/ RMahbubani.
