City restricts where payday lenders can locate

Columbia City Council unanimously approved restrictions on payday lenders Wednesday, banning them from opening new locations in buildings smaller than 12,000 square feet or within a half mile of an existing lender.

The restrictions are designed to reduce what some City Council members say is the clustering of payday lenders in poor areas of the city.

The new law does not apply to existing payday lending locations.

Council members had agreed weeks ago on the half-mile buffer, but got hung up on a requirement that would have required new payday lenders to operate only in shopping centers larger than 30,000 square feet. They were concerned that requiring that large of a building would effectively ban the industry in the city.

Marc Mylott, the city's director of zoning and development services, said the city has 375 buildings of at least 30,000 square feet that are zoned for commercial use. The city has 1,075 buildings of at least 12,000 square feet that are zoned for commercial use.

"We would really have some justification to stand behind that number," Councilman Daniel Rickenmann said of the 12,000-square-foot requirement.

The vote ended a two-year debate on payday lending that started when the city's Code Enforcement Task Force recommended the changes in 2008.

The issue quickly took on a political tone when Steve Benjamin, who is a member of the board of directors for the Spartanburg-based Advance America, the country's largest payday lender, announced his candidacy for mayor. Benjamin announced this week that he plans to resign from the board in May to avoid any "distractions" from his campaign.

Benjamin's candidacy prompted the task force to push the ordinance through council before the April 6 elections. But it wasn't easy. The debate included an hours-long public hearing at City Hall followed by an unusual deadlock because one of the City Council members was absent. The result was a delay in the vote.

Columbia isn't the first city to place zoning restrictions on payday lending. Rock Hill has restrictions similar to Columbia's, while the city of Greenville's ordinance applies to all payday lending locations, including ones already established. Some business owners have sued Greenville.

The payday lending industry, led by Jamie Fulmer, spokesman for Advance America, has opposed Columbia's restrictions, saying they are a back door way of trying to eliminate the industry entirely.

But neighborhood and community leaders, such as the Rev. John W. Culp of the Virginia Wingard Memorial United Methodist Church on Broad River Road, say the lenders are an eyesore.

"When I stand on my front steps (of the church), I see four title lenders," Culp told council members, adding one would be enough.

Payday lenders in the City of Columbia as of July 2008:
View Payday lenders in a larger map