City Council passes payday loan resolution, will select new Zone 2 representative

Springfield City Council approved a resolution that asks a federal agency, the Consumer Financial Protection Bureau, to strengthen proposed regulations on the payday lending industry.

The resolution was passed 7-1. The "no" vote came from Councilwoman Kristi Fulnecky.

Members of a grass-roots faith-based organized, Faith Voices of Southwest Missouri, packed City Council chambers Monday night in support of the resolution.

Jennifer Trogdon, with Faith Voices of Southwest Missouri, told council members about her personal experience with payday loans. She said she paid $6,000 in interest over three years for two $500 loans.

Trogdon said she initially needed money for an emergency car repair.

"They don’t let you pay the loan down," Trogdon said. "You have to pay the entire principal and all the interest at once. We couldn’t get that much together at one time so they kept rolling over, with more fees and more interest. We kept paying on them but they kept snowballing."

Representatives of Faith Voices of Southwest Missouri described the payday loan industry as "predatory" and "exploitative."

As part of the resolution, City Council is asking the Consumer Financial Protection Bureau to require an ability-to-pay determination of every payday or auto title loan, without exception.

The bureau proposed a new rule in June that requires lenders to determine whether borrowers can afford to pay back their loans — after a person has had six payday loans.

Bob Perry with local ministry University Hope said the rule is not stringent enough.

"Even one loan can spell disaster for a working poor family in Springfield," Perry said.

The bureau's rule could become law once the public comment period is over in October.

Jeff Munzinger with Brentwood Christian Church, said more than 50 Springfield faith institutions have been working together to advocate for payday loan regulation reform.

"We have more than 70 payday and title loan companies in Springfield which extract millions from our economy (and) off the backs of the most vulnerable," Munzinger said.

Councilman Craig Hosmer spoke in favor the resolution. He said payday loan regulations fit into the ongoing city effort to alleviate poverty.

"To allow an industry that preys on poor people and keeps poor people in poverty doesn't make any sense," Hosmer said.

Councilwoman Phyllis Ferguson, who represents Zone 1 in impoverished northwest Springfield, said she often encounters families that are struggling with payday loans during neighborhood meetings.

No representatives from payday loan companies spoke at the meeting.

Fulnecky said she would not support the resolution without getting the perspective of payday loan companies.

Other council news

Tuesday at noon Springfield City Council will interview eight people who applied to be the new Zone 2 representative. The interviews will be held at the Springfield-Greene County Public Safety Center at 330 W. Scott Street.

Applicants include:

• Mike Brothers, who is currently the director of media relations at Drury University.
• Jennifer Capler, who is with Reeves Business Consulting.
• Jesse Coulter, who is a project manager and energy specialist with Cenergistic.
• Michael Hines, who is a retired information technology professional.
• Kenneth Hopper, who is a retired Springfield Public Schools teacher and coach.
• Thomas Prater, who is with Mattax Neu Prater Eye Center.
• Robert Sweere, who is a private practice attorney.
• David Trippe, who is a retired Nixa High School teacher.

The Zone 2 council seat was vacated by Justin Burnett earlier this month, whose resignation came as a complete surprise to city leaders.

On Tuesday, council is also expected to select an applicant who will represent Zone 2 in northeast Springfield until the April election.