Monday, May 8, 2006

Continuing a flurry of news involving the turbulent Arizona payday loan industry, the Ahwatukee Foothills Village Planning Committee rejected the plan by Phoenix to limit the number of payday loan centers in the city, according to the Arizona Republic.

The committee voted against the proposed ordinance that would have changed the zoning ordinance to spread the businesses out, despite the fact that the number of payday advance centers in Ahwatukee can be counted on one hand. Members felt the code was the wrong way for the city to address concerns about cash loan stores, and that Phoenix had not worked hard enough with the industry on a compromise.

Phoenix launched an initiative late last year to restrict the number of faxless payday loan and check cashing businesses, with city planners looking for a buffer of 1,320 feet between such establishments and a 500-foot zone between the businesses and residential districts.

Several cities in Arizona (including Tempe and Tucson) have passed similar ordinances.

Phoenix has been shopping the plan to its village planning committees in the past few weeks, with about 10 voting in favor of the change and two voting against it, said the Phoenix planning department. The Ahwatukee Foothills Village Planning Committee is one of those two. The ordinance change goes before the City Council for a vote in late June.

Despite the city's claims the of the quick cash advance business taking advantage of a low-income residents by charging interest rates up to 550 percent and engaging in questionable collection methods, members of the committee were reluctant to alter zoning based on a particular industry.

"It's a slippery slope," board member Laurel Arndt said. "Why don't we start limiting the Circle K's because they sell a lot of fatty food?"

Check cashing places and firms offering payday loans are rare in Ahwatukee, although some Phoenix ZIP codes have more than a dozen such sites.

"They don't have the same problems (with payday loan centers) that other parts of the city have," said Councilman Dave Siebert, whose district has a strip of quick cash loan ventures along Bell Road.

The Ahwatukee group said the city has not tried to reach an agreement with the industry. The Arizona Community Financial Services Association, a trade group that represents the payday industry, is trying to compromise with the city on the wording of the ordinance. An attorney for the association noted that many of the stores that now house payday cash loan companies used to be video rental or cellphone stores, both of which were eliminated by national chains.

This entry was posted on Monday, May 8th, 2006 at 12:14 pm and is filed under Arizona.