Fair lending organization praises Moorhead's payday loan crackdown

The program was passed by the City Council this past fall and caused the city's two lenders — Greenbacks at 819 30th Ave. S. and Peoples Small Loan Co. at 1208 Center Ave. — to close up shop.

Payday loans.jpg
A sign still remains showing where the Greenbacks payday loan lending office was located at 819 30th Ave. S. in Moorhead. After the city passed a more restrictive ordinance regulating the businesses, the shop and the other one in the city both closed. Barry Amundson / The Forum
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MOORHEAD — Moorhead's pioneering city program of cracking down on payday loan lending was recognized Wednesday, Dec. 30, by Minnesotans for Fair Lending.

The group, primarily sponsored by the Evangelical Lutheran Church of America, met with City Council member Heidi Durand, who is leaving office this week, as well as with Mayor Johnathan Judd and newly elected State Rep. Heather Keeler to praise the city's effort. Moorhead dramatically lowered the payday loan interest rate from what Durand said averaged about 250% to 33% at Moorhead's two lenders.

"Moorhead is a model for what can be done," Durand said. "We're going to take it on the road."

She said several other Minnesota cities have been in contact to learn more about the city's program that is the first of its kind in the state.

Besides limiting the interest rate, the city's program restricts fees, limits the number of loans to two under $1,000 per year, requires repayment within 60 days and also calls for detailed itemizations of all charges as well as annual reports from the lenders to the city.


The program was passed by the City Council this past fall and caused the city's two lenders — Greenbacks at 819 30th Ave. S. and Peoples Small Loan Co. at 1208 Center Ave. — to close up shop.

A call to Greenbacks, which lists on its website that its hours are unknown but still has a phone number, wasn't returned on Wednesday. A sign for the company is still found outside the office building.

In a public hearing on the plan before it was adopted, Chris Laid and his brother, Nick, of Greenbacks Inc. were the only residents to offer opposition. They owned the business with their father, Vel.

Nick Laid wrote that if the law passed it would likely put them out of business and drive people to Fargo where there are higher interest rates.

"Many people who use short-term consumer loans already have limited credit access either due to poor credit, no credits, lack of collateral or lack of community support structures such as friends or family," Chris Laid added.

Durand, who has been studying and leading on the issue for years, said the lenders require a payment due within two weeks, or the charges go up immediately if the loan can't be paid off.

Many credit card companies survive on interest rates that are much lower than 33%, she said.

She said the Moorhead program is similar to North Dakota's state program, while Minnesota regulations aren't nearly as restrictive as the city's.


Minnesotans for Fair Lending is building a website and has a Facebook page where it calls the payday loans "predatory" that put borrowers into a debt trap with the triple-digit interest rates.

Durand has repeatedly praised the Exodus Lending nonprofit organization in Minnesota that has a 99% success rate of getting borrowers out of payday loan debt.

An almost 50-year veteran of the newspaper business, Amundson has worked for The Forum and Forum News Service for 15 years. He started as a sport reporter in Minnesota. He is currently the city and night reporter for The Forum. 701-451-5665
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