The rising number of check-cashing, title loan and payday lending businesses along Birmingham streets could be halted if the City Council approves a proposed moratorium on the companies.
 |
| (Press-Register) |
Scales is chairwoman of the council's economic development committee, which recently endorsed the measure.
"Our desire as a city is to attract healthy community-friendly businesses to all parts of the city," Scales said. "We want to bring in businesses that create wealth and create prosperity and not take away from it."
Scales said a drive along the city's main thoroughfares quickly illustrates the proliferation of the businesses her ordinance is targeting.
"The excessive concentration of these types of businesses within the territorial confines of the Birmingham city limits effectively limits the ability of the city of Birmingham to attract various and different types of businesses which would conform to the city's long-range comprehensive land use plan," the ordinance reads.
Scales said she understands why people turn to payday loans, and the city, while limiting them, should also lobby for better financial alternatives, including encouraging banks to provide needed services for lower-income clientele.
"That's why it's important that elected leaders work with banking institutions to make their lending practices more flexible to everyday working people," Scales said. "These businesses that are included in the moratorium serve initially as an advantage, but prove later to be a disadvantage to the working poor because the interest rates are nearly impossible to pay off. Therefore it continues to recycle a habit of indebtedness that can never be repaid."
Birmingham's proposed ordinance is modeled after one passed this summer in Midfield. Leaders there limited the number of payday lending institutions to the city's current number of 12.
Midfield Mayor Gary Richardson said if the number dips below that, then the city could consider granting another business license. That ordinance passed unanimously.
"They take up valuable retail space because they don't generate any revenue for the city other than a business license," Richardson said. "The only thing they generate is grief."
However, Midfield is in court over the ordinance following a lawsuit from a lender who calls the moratorium a violation of free commerce.
Richardson said the rules are no different than common zoning regulations regarding other businesses.
"Cities have a responsibility to bring businesses that would improve the quality of life for its residents," Richardson said. "It also means keeping out certain types of businesses that aren't in the best interest of your citizens. They are in the same category as a strip club or some red-light-district type business."
While a move to limit the cluster of payday lenders is popular among Birmingham council members, several said the city must ensure any moratorium passes legal muster.
Councilwoman Valerie Abbott, chairwoman of the Planning and Zoning Committee, agreed that the increasing number of short-term lending businesses "just brings down the area." However, she said moratoriums are temporary and an ordinance needs more explanation of its conditions.
"I don't think we can just declare a moratorium forever," Abbott said. "I certainly am not a fan of these businesses and would like to limit their proliferation as much as the next person; however, if we don't do it legally we'll end up in the court system, and that just costs our taxpayers a lot of money."
Council President Roderick Royal said it's premature to bring the ordinance before the council without having it reviewed by the city's legal department.
However, he said, "I support the limited presence of these places, which tend to prey off the poorest of our residents. I think one answer might be to lobby the Legislature to regulate the industry more closely or encourage traditional banks to offer products which meet the demands in that market."
No comments:
Post a Comment