ALTHOUGH COLUMBIA City Council's ability to regulate payday lenders is limited to its zoning authority, it's quite appropriate for the council to take what small actions it can to protect local communities.
Had lawmakers taken the best approach and banned these predators, Columbia and other locales wouldn't have to worry about their debilitating effect on citizens and neighborhoods. But legislators passed new rules - they don't go into effect until next year - that won't protect borrowers from being ensnared in a debt cycle.
Some City Council members are understandably concerned about lenders congregating in poor neighborhoods, enticing those who can least afford the financial entanglement. In addition, clusters of payday lenders can change the character of neighborhoods. So the city's Code Enforcement Task Force recommends limiting where lenders can locate to protect the aesthetics and integrity of communities.
The Planning Commission wants to continue the current practice of requiring payday lending locations to receive a special exception from the Board of Zoning Adjustments. But the Code Enforcement Task Force proposes a more effective, predictable approach that would prohibit lenders from operating within about a half-mile of each other. The lenders would have to apply for a conditional use designation, which would be granted automatically - if they conform to certain conditions, which include not operating in buildings larger than 30,000 square feet, and locating at least 3,000 feet away from each other.
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Proponents of the change say the problem isn't that there's a glut of payday lending applications, but that existing locations are concentrated along stretches of the city's economically depressed commercial corridors. When that happens, it "suggests a commercial corridor is in economic and social decline, negatively impacting economic development efforts," according to the Code Enforcement Task Force. While the proposal won't affect the more than 40 payday locations already in the city, the hope is that over time they will thin out.
This hot-button issue became more intense after Steve Benjamin joined the mayor's race. Mr. Benjamin serves on the board of directors of Advance America, the nation's largest payday lender, and has lobbied on behalf of payday lenders outside South Carolina.
Some are legitimately concerned about Mr. Benjamin's affiliation with payday lenders and wonder whose interest he would protect as mayor. When he was asked about the matter, Mr. Benjamin sounded more like a lobbyist than a candidate for mayor. "The Legislature made some pretty sweeping reforms this year as it relates to the industry - some necessary and needed reforms that I think will lead to some significant contraction in the industry," he said. "I think that's within the purview of state government to address those needs. I think a mayor and City Council need to be focused on creating jobs in this community and providing strong basic services to this community, making sure we create a livable city." He went on to say that if he's elected, he likely would recuse himself from matters dealing with payday lending.
This issue and Mr. Benjamin's affiliation could play a role in April's election. It's worth watching.
Meantime, it makes sense for Columbia to do what it can to protect citizens. It won't stop lenders from preying on borrowers, but it could limit where they locate, preserve neighborhood decorum and - who knows? - perhaps save some from unnecessary debt.