6. This week’s vote by the Memphis City Council regulating the location of payday lenders, check-cashing and title loan businesses in the city generated pointed questions about demographics, money, private business, the threat of litigation and the role of the council.
If that vote is any indication, Monday’s vote by the Shelby County Board of Commissioners on the same joint city-county ordinance likely will do the same thing.
The third and final reading by the City Council on a measure that would put new restrictions on where those fringe-lending businesses can operate passed Tuesday night on a unanimous vote.
The County Commission’s third and final reading of the same ordinance – which limits those businesses to operating no closer than 1,000 feet from each other – will take place during Monday’s commission meeting.
Bill Morrison is the council member who sponsored the ordinance on the city side and who first got the idea to try and clamp down on where those businesses can operate.
He said he began sketching out a plan for the ordinance, which would create new zoning guidelines for the businesses, with officials such as Assistant City Attorney Thomas Pacello and Mary Baker, deputy director of the city-county Office of Planning and Development.
But for a body that often has gone out of its way to keep a focus on the financial burdens of city taxpayers and residents, Morrison’s idea sparked a surprising mix of responses.
In addition to that, representatives of the businesses and of the fringe-lending industry itself mounted an intense behind-the-scenes effort against Morrison’s original proposal, the basic idea of which was to break up the existing clusters of check-cashing stores, payday loan and title loan shops around the city.
Working the angles
That lobbying effort continued throughout Tuesday night’s council meeting, when individual council members repeatedly left the dais to venture into the audience and huddle with representatives of the industry.
Steve Lockwood, executive director of the Frayser Community Development Corp. and an opponent of the fringe lenders, brandished statistics at Tuesday’s meeting showing how one debtor ended up paying after one year more than $800 on a $440 payday loan.
Several council members, including Barbara Swearengen Ware, promoted one of the same arguments put forward repeatedly by representatives of the industry in private discussions about the issue. That argument was this:
“When you talk about regulating a legal business, you’re treading on thin ice, to say the least,” she said. “And to say that where they locate – the regulation needs to be in the interest rates (they charge) ... We’re not talking about strip clubs, people.”
After some inaudible whispering among council members, Ware continued: “You say strip joints are legal? Well, let’s make them illegal ... It’s supply and demand that’s driving these businesses. Nobody’s holding a gun to these people to make them walk in and hand somebody the title to their car.”
That argument about the businesses having a legal and proper right to operate is the same idea Chuck Welch, an attorney from the Nashville office of Farris Bobango Branan PLC, shared with The Daily News in a conversation a few days before the council vote. Welch is one of the industry representatives who has been meeting with local legislators who have for the last few weeks been mulling over the issue.
“What you’ve got is a lawful business that’s a commercial retail establishment, and it’s permitted and regulated by the state of Tennessee,” Welch said.
Council member Joe Brown questioned Morrison during the meeting about whether he was being supported in his effort to push the ordinance by any entity that stands to profit from its passage. That’s something at least one of the industry representatives told a reporter privately before the vote – that some of the bill’s supporters might be able to capitalize on legislation curbing the growth of fringe-lending operations.
Morrison, during Tuesday’s meeting, reiterated the fact that he came up with the plan on his own, with help from officials like Pacello and Baker.
“It does leave something to be desired … but (this ordinance) is a step in the right direction for our city,” Morrison said.
Lockwood called it “an opening shot across the bow.”...