In Waterloo, Iowa, new Ward 3 councilman Pat Morrissey is calling for city zoning changes as an attempt to rein in payday lenders. Such changes would limit where the lenders can set up shop. Morrissey says the efforts would not affect current business but would restrict "future expansion." The local zoning commission voted unanimously to endorse the ordinance changes, which may be considered by the full City Council early next month.
Neighborhood associations support the changes, saying that payday lenders negatively affect communities and take advantage of lower-income residents. "You see them in depressed areas where people don't have any alternatives," said Mary Potter, leader of the Church Row Historic Neighborhood Association. "If we don't put this ordinance in, these places are just going to run rampant."
Waterloo's proposed zoning ordinance for "deferred deposit services" would not allow new payday lenders or pawn shops to move into the downtown C-3 zoning district or S-1 shopping center districts. Such businesses would be restricted to the C-2 commercial district or manufacturing zones. New payday lenders or pawn shops also could not open within 600 feet of each other or within 600 feet of liquor stores, bars, or any other "protected uses" in the city. These include residences, day centers, churches, schools, libraries, public parks, recreation centers, museums, civic centers, medical facilities, and government buildings. According to City Planner Aric Schroeder, the proposed ordinance would "grandfather in" existing payday lenders and pawn shops. The businesses could be sold, but would lose their legal status if they closed for three consecutive months.