HomeMy WebLinkAboutReso 57-2014RESOLUTION NO. 57 -2014
CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA
A RESOLUTION SUPPORTING THE YOUTH LEADERSHIP
INSTITUTE'S REQUEST TO CONSIDER ADDITIONAL
REGULATIONS ON PAYDAY LENDERS AND CHECK
CASHING IN THE CITY OF SOUTH SAN FRANCISCO.
WHEREAS, there exist business lending practices, commonly referred to as "payday"
lending practices, whereby lending businesses advance money on paychecks to low income and
financially challenged persons, and are subject to very high interest rates; and
WHEREAS, payday lending practices in general have proven to be detrimental to
numerous individuals who use these loans as a way of overcoming immediate needs for cash;
and
WHEREAS, payday lenders are more likely to target low income communities of color
by locating their businesses around that particular community; and
WHEREAS, payday lenders count on the fact that people become trapped in a cycle of
debt from which they cannot escape; and
WHEREAS, South San Francisco has three (3) payday lenders and one (1) on the border
of South San Francisco, in San Bruno; and
WHEREAS, on average, nationwide, check cashing establishments charge a 4 percent
feel to cash a check and do not offer the range of services as a chartered financial institution; and
WHEREAS, the economic loss of South San Francisco due to payday lending practices
has been estimated to be $163,707 annually 2; and
WHEREAS, payday lending and check cashing practices can have an adverse effect
upon the elderly, the economically disadvantaged, and other citizens of South San Francisco; and
NOW, THEREFORE, BE IT RESOLVED that the City Council of South San Francisco
will consider additional regulations on payday lenders to protect the health, safety and general
welfare of the public.
1 Fox, Jean Ann and Patrick Woodall. "Cashed Out: Consumers Pay Steep Premium to 'Bank' at Check Cashing
Outlets." Consumer Federation of America, Nov. 2006. Accessed April 7, 2014 at
http: / /www.consumerfed.org /pdfs /CFA 2006 Check Cashing Study111506.pdf.
2 Based on Lohrentz, Tim. "Cost of Payday Lending in Redwood City." Insight Center for Community Economic
Development, July, 2013. The Redwood City study itself was based on Lohrentz, Tim. "The Net Economic Impact of
Payday Lending in the U.S." Insight Center for Community Economic Development, March, 2013.
I hereby certify that the foregoing Resolution was regularly introduced and adopted by
the City Council of the City of South San Francisco at a regular meeting held on the 14th day of
May, 2014 by the following vote:
AYES: Councilmembers Mark N. Addiego, Pradeep Gupta, and Liza Normandy
Vice Mayor Richard A. Garbarino and Mayor Karyl Matsumoto
NOES: None
ABSTAIN:
ABSENT:
ATTEST: C�-- tM. •'�Z�'
Anna Brown, Deputy City Clerk