Garden City may join other communities across the country in passing zoning restrictions on high-interest payday lenders. In December, the city of Caldwell was the first in Idaho to adopt a payday lender ordinance, and a state law may be on the horizon.
Payday loans are short-term loans with steep finance charges.
At a work session earlier this week, Garden City officials discussed the possibility of restricting the businesses to specified areas of the city. Councilwoman Pam Beaumont said she brought up the issue for discussion.
“These companies are predatory in nature, taking advantage of lower income people and charging extremely high interest rates (100 percent + in many cases),” Beaumont said via e-mail after the meeting. “In some states they are being highly regulated and virtually shut down because of their usury fees. While I am hopeful that our state legislature will also address this issue, I believe that restricting them to higher traffic commercial areas could be an initial step in highlighting what they are really all about.”
Councilman Jeff Souza and Councilwoman Elfreda Higgins have a favorable opinion of restrictions.
“We need to limit the number of questionable businesses and/or businesses that prey on the low income residents,” Higgins told the Statesman. “Perhaps these businesses will be limited if they are confined to a small area.”
Souza said the three payday loan businesses that have set up near each other on Chinden Boulevard make the city look blighted. He says he’s open to any restrictions that are enforceable.
The one dissenter is Councilman Mike Moser, who doesn’t cotton to the idea of restricting legal businesses. Here’s what he told the Statesman:
“If their business model is improper, then it is the state’s role to regulate them … There are probably several business models I personally don’t have a high opinion of, but this is America, let individuals choose to avail or not avail themselves to any particular businesses’ product or service. In short, I don’t believe we have a problem so why try to fix it.”