Scottsdale toughens rules on payday loan stores

The Scottsdale City Council has agreed to impose tougher regulations on payday loan stores with hopes of reducing their numbers throughout the city.

Our View: Council should hold off on payday loan store quest

Council to discuss payday loan stores

The council last week unanimously backed the idea of establishing minimum distance requirements between the stores, which have opened primarily in the southern part of Scottsdale and provide short-term loans at what critics say are high-interest and even predatory rates.

The specific restrictions will be outlined at a future meeting when the council initiates the zoning change, possibly as early as Sept. 23.

A number of other cities have already established distance restrictions, which tend to be about a quarter-mile to prevent the clustering of the stores. The council is also expected to review whether to impose development standards or require a conditional use permit be approved by the council, which the city already requires for other "sensitive uses" such as bars.

Mayor Mary Manross last month requested the council pursue new regulations, saying she wanted to avoid a proliferation of the stores that do not "lend themselves to uplifting neighborhoods and centers."

"This is a step we can take at the local level and make a difference," Manross said.

Steven Schlein, a payday loan industry spokesman, said the industry has no position on the Scottsdale proposals.

Two residents addressed the council Tuesday in support of further restrictions, saying the stores lead to crime and overall neighborhood decline.

The payday loan issue was debated a couple of months ago by the council during a rezoning case for a south Scottsdale strip center. The council told the owner of the Scottsdale East Plaza, on the southeast corner of Hayden Road and Roosevelt Street, looking to renovate the center that it would not approve the rezoning unless there was a ban on new payday loan stores. The final agreement allowed a convenience store that offers those services to remain, but no new payday loan stores could open.

In November, voters statewide will vote on Proposition 200, an initiative backed by the payday loan industry. The proposition will determine whether to allow payday loan operations to continue past their current expiration date of July 1, 2010.

Mike Phillips, a Scottsdale spokesman, said the city does not track how many payday loan stores are operating in Scottsdale.