Golden Valley Moves Forward with Restrictions for Payday Lenders and Pawnbrokers | Community
Golden Valley City Council took action on Aug. 17 to protect its community from “predatory lenders” through zoning bylaws. An amendment to the city code, which will be the subject of a second hearing and a final round of approvals at an upcoming meeting, will limit where payday lenders, money changers, lenders pawn shops and precious metal dealers can set up shop.
The new code is the result of a one-year moratorium that prevented new business in all three specialty areas, with the aim of investigating whether the types of businesses had an effect on crime, safety and health client. It restricts businesses to commercial areas only and prohibits them from setting up within 750 feet of each other. Other parts of the code require entryway visibility from the right-of-way and in store windows.
Crime and Necessity
Staff research and discussions with the Planning Commission sought a compromise that would create some regulation without banning businesses altogether. Much of this is because customers of check cashes and payday lenders often struggle to find other options.
“There are negative impacts associated with these uses, but they are sort of a necessity or a necessary role for those who don’t have access to them or don’t have a traditional bank account,” said city planner Miles. Campbell on the board.
In their research, staff found that the Federal Reserve recently estimated that 55 million Americans either do not have a bank account or have limited access to banking services.
Campbell said companies tended to be “crime attractors,” in large part because their operations require cash. Pawn shops and precious metal collectors could help with the movement of stolen goods, he added, but better record keeping allowed some tracking capacity.
Campbell ensured that the academic study staff examined to formulate their conclusions was based on data from major US cities.
“Golden Valley is not Los Angeles or Seattle,” Campbell said.
License changes in the future?
A resident who spoke during the public comments questioned whether the restrictions went far enough. She recommended that the council also consider limiting the number of licenses that could be granted in the city for activities and capping the interest rates at which lenders command the consumer.
City council member Gillian Rosenquist asked city attorney Maria Cisneros about the feasibility of these regulations.
“I think the way to address those concerns would be to go through some licensing regulations other than zoning regulations,” Cisneros said.
Research should also be conducted on whether cities would have the power to approve such regulations and how they could be enforced, she added.
According to a staff summary, several members of the Planning Commission supported exploring the permit requirements, believing they could be more effective in protecting consumers.
The first reading was adopted unanimously. Councilor Kimberly Sanberg, acting as mayor pro tempore at the meeting, called the zoning bylaws “an important step in the right direction.” Board member Larry Fonnest said he viewed businesses such as payday lenders and buyers of pawn shops and precious metals as “a potential negative influence on the community” and believed the regulations were working to “keep things going. ‘integrity of our own community’.
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