By unanimous vote, the Planning Commission this week agreed to a half-mile spacing requirement for future payday-loan businesses. That same distance restriction would apply from schools, churches, city-owned government buildings and state property.
The recommendation now moves to the City Council, whose members want to join the ranks of nine other Salt Lake Valley cities that have cracked down on the highinterest- loan stores.
"The ethic we have in the city and one we are trying to promote is being responsible financial citizens," said commission Chairman Matthew Wirthlin.
At least one commissioner questioned whether the move goes far enough.
"If we don't put a cap but we put a spacing limit, the city could have more than the existing 49' stores, Commissioner Susie McHugh argued.
If Salt Lake City adopted a one-per-10,000-residents rule, as other cities have done and planning staffers recommend, that number eventually could be slashed to 18.
But Commissioner Peggy McDonough, who lobbied for the half-mile limit, insisted a cap could effectively "nestle" the outlets long-term.
Deputy City Attorney Lynn Pace also warned that when cities enact a ceiling it tends to "memorialize" check-cashing stores.
Commissioner Tim Chambless maintained the move is prescient as fallout from the economic collapse on Wall Street grips the country, stifling people's ability to get credit. "Given the past two weeks, it's becoming a growth industry," he said.
Criticized for preying on low-income residents, payday lenders offer cash advances without credit checks. But the loans carry interest rates that sometimes exceed 500 percent a year, perpetuating the poverty cycle.
Backers of payday lenders oppose government meddling with the market, saying that it stifles competition and, ultimately, hurts the consumer.
