PSC writes rule to prevent utility payments in payday loan facilities

ST. JOSEPH, Mo. – The Civil Service Commission met today at the Missouri Western University Hearnes Center for its regular agenda meeting, approved three ordinances, and discussed in depth a possible change in rule allowing utilities to use payday loan facilities as places of payment.

Commissioner Kenney
Commissioner Kenney

Most state utility companies do not use payday loan facilities as payment venues – most are in urban or suburban areas. Commissioner Bill Kenney said the locations he found were in his former Senate district – Blue Springs and Lee’s Summit.

Several groups have come forward for comment, ranging from utility companies and short-term loan providers to social and educational groups, during the May-June comment period.

“Allowing payday loan storefronts to serve as payment kiosks for utility bills puts our families at risk!” Said Sister Berta Sailer – a co-founder of Operation Breakthrough in Kansas City. “A parent with limited resources is easy prey for lenders who will encourage them to borrow in order to keep the heat or lights on. I ask you to investigate alternative sites.

Regarding utilities, Summit Natural Gas said it has no locations at payday lending establishments. Empire Electric said the same, but added other comments saying they prefer flexibility for paid locations.

“Empire prefers to retain the flexibility of selecting its own payment terminal locations,” said Diana Carter, lawyer for Empire Electric. “Payment kiosks are intended for the convenience of Empire customers and facilitate the collection of utility payments, and Empire argues that every regulated utility should be able to exercise its own informed judgment and make this type of decision. management decisions without unnecessary interference. “

PSC staff released a report in mid-August recommending that the Commission not write the rule, its reasoning being that “the power of the Commission to do so is unclear at best.” The Missouri Energy Development Association submitted comments in agreement with staff.

“MEDA commends the staff for their management of the workshop and the comprehensiveness of their report,” the additional comments read. “MEDA supports the staff’s conclusion that the Commission should not engage in the promulgation of regulations aimed at arbitrarily prohibiting or restricting the ability of a public service to contract with third parties, including payday lending institutions, to act as public service authorized paying agents. MEDA agrees with staff’s observation that the statutory authority of the Commission to deal with this issue is unclear at best. Staff note that payday lending institutions are engaged in legal activity regulated by the Missouri Division of Finance. “

The OPC responded to the staff report stating that they disagreed that the authority was unclear.

“[T]The Commission clearly has the power to regulate billing and collection practices affecting utility customers and the jurisdiction to determine that the practices of such lenders go beyond what is in the public interest, and therefore, to prohibit the services. public to use certain short-term lenders as payment terminals ”, read the OPC’s response.

President Kenney
President Kenney

Today, President Robert Kenney said, “Let’s try to phrase some language,” supporting “the language that has been overseen by the Public Council Office. “

Kenney opened the discussion, saying it could be questionable whether the Commission had the power to create such a rule, but responding to his own dilemmas as to whether a rule would be good public policy.

“I was convinced several years ago that it was a bad idea to locate payment kiosks in these facilities,” said the president, saying that having these slots available for payment gives a “signature of approval “.

Commissioner Stephen Stoll sided with President Kenney, saying there was public demand for a rule.

“I have received phone calls from people urging us to enact a rule,” Stoll said.

After Stoll discussed stakeholder engagement with President Kenney, he concluded that a rule should be drafted.

“The only thing is I think having the utility logo on the door gives credit to their legitimacy,” Stoll said. “People can still go there to pay a bill. We should move forward to establish a rule.

Commissioner Bill Kenney appeared to side with Stoll and President Kenney, saying the practice “preyed on those with limited options.” Bill Kenney responded to Stoll’s dilemma over stakeholder involvement, saying payday loan interest he spoke with was not subject to a rule. Bill Kenney named Payday Loan consultant Mark Rhoads as someone he sat down with to discuss the matter.

“I understand they are concerned that paying for utilities at a convenience store might entice a customer into taking out a payday loan,” Rhoads told the Missouri Times. “First of all, from an industry perspective – even if that were true – we don’t see anything wrong with it. It is much cheaper for a consumer than paying for a disconnection and reconnection. Second, we did research, which we submitted to the commission, which showed that there is no direct connection to paying bills and taking out a personal loan. We believe that the Commission, and although we understand their concern, is trying to solve a problem that does not exist.

QC Holdings submitted comments to the Commission in June, providing information on the industry. The comments explain that the Community Financial Services Association represents more than 300 Missouri short-term lending centers.

“Members of CFSA, QC Holdings, Advance America and Check Into Cash are the state’s largest short-term payday loan providers,” the comments say. “All three companies serve as an agent for third parties who accept utility payments on behalf of various utility companies. QC, for example, through its Moneygram service, accepts utility bill payments at approximately 85 of our 100 Missouri branches.

“While the Commission is of the view that consumers in Missouri should not pay additional fees when making utility payments, we have no objection to this proposal,” continued comments from QC Holding. “However, we strongly take issue with the unsubstantiated view that payday loan stores take advantage of customers who pay bills. As shown below, there is almost no overlap between customers who pay bills and payday loan customers. ”

Commissioner Rupp
Commissioner Rupp

“Some utilities have mentioned that if we were to impose a rule, we would hamper those who have to travel. [to pay their utilities]Bill Kenney said, saying the locations he found were in the Kansas City suburbs, not requiring a lot of travel. He agreed he didn’t want to see payday loans “legitimized” by utilities, supporting the creation of a rule.

Commissioner Daniel Hall said he was unsure of the Commission’s authority to draft such a rule, but said the rule should not include liquor stores or casinos as places of payment.

“We should tie all the rules to a particular interest rate,” Hall said.

Commissioner Scott Rupp defended flexibility in the choice of payment venues, saying he “saw no problem at the moment.

“I don’t think it’s the role of a commission to stop people from making bad choices,” Rupp said.

President Kenney closed the discussion by asking for a rule to be formulated.


Price and new orders
Item No. Case / Tracking number Company name / Brief description Main staff / Additional resource person (s)



Kansas City Power & Light Company – Notice Acknowledging Annual Update Report and Closing File Pridgin



KCP & L Greater Missouri Operations Company – Notice Acknowledging Annual Update Report and Closing Record Pridgin



Summit Natural Gas of Missouri, Inc. – Partial Clauses and Agreements Order Jordan
Case discussion
Item No. Case n ° Company name / Brief description Main staff / Additional resource person (s)
Rule to be written



Commission – Memo: Discussion of staff report regarding the need for a rule prohibiting utilities from using payday lending facilities as authorized payment stations woodruff



Summit Natural Gas of Missouri, Inc. – Pre-hearing discussion – Michael Stark v. Summit Natural Gas of Missouri, Inc. Jones



Liberty Utilities (Midstates Natural Gas) Corp. – Pre-hearing discussion Pridgin
Other discussion
Other description brief description Main staff / Additional resource person (s)
Questions relating to the programming of committees Kenney (Robert)
Legislation Kenney (Robert)
Budget Kenney (Robert)
Comments submitted as modified Other Draft FCC Response Comments Regarding Connect America Fund Phase II. Van Eschen, Dale
Closed session Kenney (Robert)
Litigation Kenney (Robert)
Litigation External litigation Harden
Staff Kenney (Robert)

The commissioners then held public meetings in northern Missouri regarding the Grain Belt Express line.

The PSC will meet next Wednesday at noon, due to the evidence hearings in the Liberty Utilities case. There will be no meeting on the 17the.