IN 2007 the small city of Mesquite, a suburb of Dallas, was trying to overhaul its ageing infrastructure and faded industrial zones. City officials launched a renewal programme, but found their efforts marred by payday lenders. These are shops that offer small, short-term loans (in advance of payday) on unfavourable terms, and their neon signs hardly suggest a thriving and vital place. \u201cThey project an opposite kind of image,\u201d\u009d says one city official. So Mesquite passed a strict zoning ordinance that will make it difficult for any new payday lenders to set up shop. The city cannot bar the practice, but it can try to elbow it out.<\/p>\n
The payday lending industry has taken several hits this month. On November 6th the Arkansas Supreme Court ruled that large fees for small loans violate the state constitution. In Arizona, voters rejected an industry-sponsored \u201creform\u201d\u009d initiative that would have done away with a sunset provision on payday lending in the current law. In Ohio, voters decided not to repeal a law capping annual interest rates. This could mean the end of payday lending in those three states.<\/p>\n