COLUMBIA CITY Council has every reason to move forward with a proposal to limit where payday lenders can locate in the city.
Some members want to wait to see what effect a new state law that attempts to regulate the industry will have on the number of payday lending locations in the city before approving new zoning restrictions.
It's true that the number of payday lending locations in South Carolina has decreased since the passage of a state law - 11 have closed in Columbia. But the state law wasn't meant to control where payday lenders locate. And it's questionable whether it will be effective at doing what it's supposed to do - keep people from being snared in a cycle of debt. We believe its effect will be minimal; these lenders always tend to find a way around prevailing law to line their pockets.
The least the city can do is make sure they don't congregate in poor areas or proliferate along certain corridors, making them less appealing. Some city officials and residents point out that the appearance of many payday lending establishments - they use bright, colorful signs to catch people's eye and entice them to enter - work against communities that are attempting to lure new development.
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The payday lending industry, led by Spartanburg-based Advance America, says the law restricting borrowers to one loan at a time and establishing a statewide database to track loans addresses the city's concerns, making the zoning changes unnecessary. Some City Council members are 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. A city task force recommends limiting where lenders can locate to protect the aesthetics and integrity of communities.
If a lender shut its doors in a certain location, that doesn't mean another won't open up at the same place or nearby. The hope is that the new zoning will cause payday lending locations to thin out. The only way the city can assure they are spaced out sufficiently is to approve rules that require that. No harm would be done to existing shops because the law wouldn't affect them. If the day ever comes when the law isn't needed, the city can repeal it.
But, at the moment, there's still a need. Under the proposal before the council, the lenders would have to apply for a conditional use designation, which would be granted automatically - if they conform to certain conditions, which include them operating in buildings larger than 30,000 square feet, and locating at least 3,000 feet away from each other.
Council members Belinda Gergel, Tameika Isaac Devine, Sam Davis, Daniel Rickenmann and Kirkman Finlay have said they support the ordinance, while E.W. Cromartie and Mayor Bob Coble have said they want to delay the vote until the spring to see what impact the new state law will have. But the new law won't go into effect until February - if then; the timing depends on when a statewide database is up and running.
We question a suggestion that the city wait and deal with this issue in the spring. Should attorney Steve Benjamin be elected mayor in April, that could cause some difficulty. Mr. Benjamin sits on the board of directors of Advance America, and has lobbied on behalf of payday lenders. He has said if he's elected, he likely would recuse himself from matters dealing with payday lending (he also opposes this proposal), which is yet another reason to move forward now, when all of the city's leadership can participate in the debate.
City Council shouldn't leave this to chance. Circumstances today dictate that it approve the new rules.