A majority of Columbia City Council members say they will approve an ordinance Wednesday that will ban payday lenders from operating within a half-mile of each other or in buildings of less than 30,000 square feet.
The ordinance is designed to reduce the clustering of payday lenders in poor neighborhoods, which some council members believe contributes to the cycle of poverty that keeps those areas poor.
But the payday lending industry says the ordinance is an attempt to do what the state Legislature did not do earlier this year - ban the industry outright.
The ordinance would affect new lenders, not those already in place.
Council members Belinda Gergel, Sam Davis, Tameika Isaac Devine, Kirkman Finlay and Daniel Rickenmann say they will support the ordinance.
Attempts to reach Councilman E.W. Cromartie and Mayor Bob Coble were unsuccessful.
Two weeks ago, during a public hearing on the issue, council members could not agree on the ordinance and decided to delay a vote until this week.
It's unclear what pushed council members to approve the ordinance. But when explaining her stance Monday, Devine mentioned a pending application for a payday lender on North Main Street.
"We've been doing everything we can to have some real, positive investment on North Main Street," Devine said. "When you allow those kind of companies to saturate an area, I think it makes it harder for other businesses to want to come in and invest in that area."
Cash Right Advance submitted an application last month to operate in a shopping center at 6820 N. Main St. The shopping center is less than 30,000 square feet, meaning the lender would not be allowed to open if the ordinance were in place.
Attempts to reach Otis Richardson, who submitted the application, were unsuccessful.
Finlay said that while he plans to vote for the ordinance, he is concerned about its effects on the industry. He plans to offer an amendment that would cause the ordinance to expire in two years unless City Council members re-approve it.
"What else do we zone out of business if we're not careful?" Finlay asked.
Earlier this year, state lawmakers passed legislation that restricts borrowers to one loan at a time and establishes an industry-maintained database to keep track of loans.
The law won't take effect until February, but it is already having an impact, said Jamie Fulmer, spokesman for the Spartanburg-based Advance America, the nation's largest payday lender.
Statewide, 1,180 payday lenders were licensed before the state law was changed. Now, the state has 761, according to Mary Riley, chief of staff and director of research for the state Senate Banking and Insurance Committee.
In Columbia, Riley said, 11 payday lenders have shut down since the law changed.
"I don't understand why it doesn't make good sense to wait and see what the law does," Fulmer said.
Fulmer and a handful of other industry representatives met Monday with members of the city's Code Enforcement Task Force, which crafted the ordinance council members will vote on.
The task force met 35 times over a period of 2 1/2 years, but Monday was the task force's first meeting with the payday lending industry.
"From those of us on the outside, it just looks kind of fuzzy," said Carlton Washington, a consultant representing Advance America.
But the Rev. Wiley Cooper, chairman of the task force, said City Council members asked them to come up with a payday lending ordinance.
"It wasn't something we initiated," he said.