It doesn’t matter to D.C. Council Member Mary Cheh that there are no payday loan shops in Ward 3, the predominantly white, upscale jurisdiction she represents.

As chair of the Committee on Public Services and Consumer Affairs, Cheh wants to rein in all institutions that offer the two-week, quick-fix cash loans through a bill that places a 24 percent annual percentage rate cap on interest charged by the lenders.

Cheh called such lenders little more than “loan sharks” who prey on predominantly low-income minorities by offering the loans, which are available to anyone who can produce a pay stub and proof of a checking account. Customers often take a loan out only to find they don’t have the resources to pay it back. Instead, many get forced into a cycle of taking out other loans at high interest rates and face financial ruin as a result, Cheh said.

There are 48 such shops in the District, located predominantly in lower-income, minority areas, according to a map from the Center for Responsible Lending, which supports Cheh’s bill. Many of the lenders are near the Maryland border, because Maryland does not allow such loans, according to the center.

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“This makes me mad, preying on people like this,” Cheh said. “They need $500, they were at the margins. They’re not going to have the $500 in a week or two weeks, and they re-up.”

Cheh introduced the Payday Loan Consumer Protection Act with Council Member Marion Barry, D-Ward 8. A hearing on it is scheduled for 1 p.m. today.

Cheh can expect a fight from the Community Financial Services Association, which represents 60 percent of the payday loan industry, including well-known lenders Check ’n Go and Check Into Cash. Spokesman Steve Schlein disputed Cheh’s argument, saying only 2 percent of payday loan recipients default.

Schlein said the 24 percent APR Cheh proposes would make it impossible for the businesses to operate in the District.

cmabeus@dcexaminer.com