Jesus Rodriguez knew he was going to come up short on his bills, so on a recent Friday afternoon he took his accustomed trip to a Baldwin Park strip mall.
The produce-truck driver walked into a payday lending business nestled alongside a Chinese fast-food joint and a dental office. He wrote out a personal check for $300 and walked out with $255 cash. The 33-year-old Mexican immigrant basically gave away $45 to get the advance, but he said he didn't see a lot of other options.
"Seen a certain way, it is a lot of money," Rodriguez said as his young daughter waited nearby, clutching a jump rope. "But it's a help. You can't get a loan like this from a bank."
But Baldwin Park officials don't think such businesses are helpful and are taking steps they hope will drive payday lending and check-cashing businesses away. City officials had voted to enact a moratorium prohibiting more shops from opening. Maybe the rest will just shrivel away, Baldwin Park Mayor Manuel Lozano said.
"These places are like vultures," he said. "In Baldwin Park, we wish they would close up and get out of the city."
Baldwin Park was the latest city to target businesses that conduct payday lending and check cashing; others include San Francisco, Sacramento, Oakland, Oceanside, Pico Rivera and Montebello. Cities across the country and in Canada have mulled or passed restrictive measures on such businesses.
And last year, the Marine Corps and the Navy successfully lobbied the California Legislature to pass a law dramatically reducing the amount payday lending businesses -- common near military bases -- can charge service members. Military commanders said debt from payday loans had increasingly been threatening troops' reenlistment and the security clearance of key personnel.
The Marines and the Navy started their own quick no-interest loan programs to counter the payday lenders -- which, for the most part, have stopped lending to troops, said Marine Maj. Gen. Michael Lehnert.
Critics call it "predatory lending," with businesses opening in largely poor and working-class neighborhoods; the industry calls it serving the underserved.
State regulators say that with 2,500 outlets, the industry seems more visible than ever.
Officials in some cities, including Baldwin Park, argue that the proliferation of such businesses reinforces their reputations as poor communities.
State regulators say that there are "bad apples" but that the number of complaints from consumers against these businesses are relatively low, especially considering the volume of transactions.
The amount customers can borrow at payday lending stores is limited to $255. To do so, a customer might walk in and sign over a check for $300. The payday advance store agrees to defer deposit of the check for two weeks or more. The rates are usually clearly laid out for customers, regulators say.
"The industry may not be very popular, but it's very transparent," said Mark Leyes, a spokesman for the California Department of Corporations. "Why ever risk penalties by cheating somebody out of an extra $5 when you can just do it" legally?
"A lot of people see these types of businesses as predatory," he said. "I guess that's in the eye of the beholder."
Where there's a market
Despite concerns from some city leaders, many customers swear by payday lenders, saying the loans help cover costs when money is short.
On a recent afternoon, Olivia Lobato, 31, walked out of a Baldwin Park payday advance store with $255. Her 3-year-old squirmed in her arms. A single mother of two boys and an analyst for Kaiser Permanente, Lobato said the money was for their trip the next day to Disney World in Florida.
"This is more just spending money," she said. "It helps you on a vacation, or Christmastime. It really helps Christmastime."
In neighboring West Covina, Oscar Mendoza, 32, recently walked into a payday advance store with neon signs touting that it does not check for bad credit.
"Bye, Virginia! Thanks! Send me customers," an employee who gave her name as Laura said to another customer. Mendoza is a regular at the store even though he lives in Baldwin Park.
"I just don't want people to see me there," Mendoza said.
He said he thinks Baldwin Park has larger problems than check-cashing and payday lending business. A few days ago, someone broke into his Chevrolet Suburban.
"By a hair I almost caught the guy," he told the employees, who nodded sympathetically.
Another employee said she somewhat understands where the city is coming from. She grew up in Baldwin Park and thinks the city is trying to make itself better.
Mendoza, a tractor driver, said payday advances helped get him and his wife through a rough patch after he lost his job at a bank about a year ago. He almost lost his house, he said.