Changes Proposed to Where Payday and Title Loan Companies Can Go

October 24, 2013
Richmond Times-Dispatch (VA) 
payday lending news

Chesterfield County officials, who earlier in the year approved a measure to allow payday and title lenders to operate in the Virginia jurisdiction, are now looking to revise their decision. The county board of supervisors will consider a change that would force the lenders to operate inside shopping centers or in multi-use structures rather than in independent storefronts.

Ray Cash, a senior planner for the county, said the change is being considered due to concerns about "the visual impact on the surrounding community when the uses were located in freestanding structures." The existing county policy requires alternative lenders to maintain a minimum of one mile between the closest property lines. The policy also bans them from operating next to residential property or in five designated revitalization areas. Multiple short-term lenders also cannot operate under the same roof.

Payday and auto title lenders have been criticized for high-interest lending practices that many consider predatory, targeted toward consumers with few options for obtaining credit in times of need. The Center for Responsible Lending says payday lenders build their businesses by “making loans borrowers cannot afford to pay off, so that they will keep coming back and paying repeated fees on the same small amount of money.” The organization conducted a study that found that such loans “cost U.S. consumers $3.6 billion a year in interest on $1.6 billion in loans.”

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