by Bradley Parsons
Staff Writer
A bill working its way through the City Council would help protect Duval County’s military families from predatory lenders and close many of the loopholes that have allowed the businesses to flourish in Jacksonville.
The ordinance was crafted by Council President Kevin Hyde with guidance from Jacksonville Area Legal Aid, an organization with a history of combating predatory lending, which seeks to put borrowers into a hole they can’t get out of.
Hyde’s interest in the area was piqued by a Department of Defense list of criteria that would be considered in making base closure decisions. The DOD ranked the prevalence of payday lending in an area as its No. 8 consideration in deciding which bases to close. Payday lenders often target military members because their paychecks are small enough to keep them in need, but frequent enough to provide the steady stream of income necessary to make payments.
Hyde decided legislative action was necessary when he saw a University of Florida study that ranked Duval County as the top location in Florida for payday lenders.
“As all these things came together, I saw that this was something that needed to be addressed,” said Hyde
The ordinance limits interest rates the businesses can charge and where they can operate, keeping them away from military bases and each other, and closes loopholes that allowed some of the shadiest lending practices. These include disguising the loans as rebates for other purchases and threatening borrowers with arrest.
The bill fills in some of the gaps left by State legislation enacted in 2001, said Lynn Drysdale, consumer law attorney with JALA. Drysdale worked with Buddy Schulz of Holland & Knight to win a high-profile suit against the industry with their action against payday lender Florida Internet.
The bill contains several provisions specific to military members. Lenders would be prohibited from complaining to commanding officers and using coercive collection methods while a military member is serving combat duty. The bill is on track for an Oct. 11 vote by the full Council and also needs approval from the Land Use and Zoning Committee.
The legislation would put Jacksonville on the leading edge of payday loan regulation. The bill’s importance was evident from the heavy hitters on both sides of the argument that showed up last week to City Council committee meetings to argue for or against.
Billy Webster, Chief Executive Officer of Advance America, one of the largest legitimate national payday lenders, told the Council that the regulation would be an unnecessary intrusion into the marketplace. The industry reasons that if lenders and borrowers are both acting voluntarily, then the government doesn’t need to get involved.
Hyde plans to meet with industry representatives prior to his bill’s Oct. 4 appearance at LUZ. Most likely at issue is the bill’s limit on locations where payday lenders can operate. The current version prevents the lenders from operating within 10 miles of military bases and within 600 feet of each other.
“They have a right to have their recommendations heard,” said Hyde. “Primarily, their concerns are relating to the interest rate cap and there will be some discussion on the zoning.
“They’re looking for more limited prohibitions than what I’ve included.”
Last week’s Committee hearing brought out plenty of supporters for Hyde’s bill, many of them representing the military.
Capt. Chip Dobson, commanding officer of Naval Air Station Jacksonville supported the bill as did retired Rear Adm. Kevin Delaney and State Attorney Harry Shorstein.
Webster’s appearance may have been an attempt to nip the legislation in the bud. Jacksonville has been a trendsetter before in regulating the lending industry. In 1998, again with the help of JALA, the City passed legislation limiting car title lending in Duval County. That bill became a model for surrounding counties and eventually worked its way to Tallahassee, where the Legislature enacted a similar measure.