The Des Moines City Council voted 6-0 today to impose a six-month moratorium on new payday lending operations and pawn shops.

City leaders will spend the next 180 days examining long-term zoning regulations on such businesses. The action was taken partly in response to concerns voiced by neighborhood leaders and business owners.

Plans to open new Pawn America shops on Merle Hay Road and SE 14th Street prompted the City Council to act. Ideally, Iowa would have enacted stronger regulations on the payday lending industry long ago, because the industry’s business model depends on trapping borrowers in cycles of debt. Some Iowa Democrats tried to pass new regulations on payday lending during this year’s legislative session, but unfortunately the bill didn’t have the votes to get out of subcommittee before the first “funnel” deadline.

After the jump I’ve posted Iowa Citizens for Community Improvement‘s reaction to today’s news. Iowa CCI was one of several organizations that urged the legislature to act to protect consumers from payday lenders.

It’s not yet clear whether payday lending restrictions will be part of the federal financial reform legislation Congress is now considering.