Springfield City Council unanimously passed a bill Monday night making it mandatory for short term loan establishments, like payday lenders, to acquire an annual permit in order to operate legally.
Those are defined by the city as establishments that engage in the business of providing money to customers on a temporary basis through loans that are secured by post-dated check, paycheck or car title.
The permit for the short-term loan businesses will cost $5,000, but that fee has to be approved by voters in August.
According to the new ordinance, the permit fees are intended to defray the costs of investigating and processing the applications for the permits. They’re also mean to help pay for enforcement efforts required by the Short Term Lending Code and costs to the public for the economic damage caused by short-term loans.
Faith groups have long pushed for such an ordinance, arguing that unregulated short-term loan establishments perpetuate the cycle of poverty.
