Instead of soaking in scenic vistas, members of this southeast Salt Lake Valley community's City Council gaze out of bus windows at strip malls, neon lights and boxy storefronts.

With Community Development Director Michael Coulam behind the wheel, the council is cruising State Street and 700 East to survey the city's "nondepository" financial institutions - businesses that offer payday loans, check cashing, deferred-deposit advances or car-title loans.

Sandy's Planning Commission has asked the council to crack down on the number of such loan centers allowed within the city. The request isn't unusual in the valley: South Salt Lake, West Valley City, Taylorsville, West Jordan, South Jordan, Draper and Midvale already have imposed limits on the businesses, leaving stores to cluster in unregulated areas.

Tuesday night, Sandy City Council will debate whether to cap payday lenders at 1 per 10,000 residents and require a one-mile distance between stores.

With 10 check-cashing stores already in the city of 95,000 people - 105,000 if unincorporated islands are included - the measure could effectively stop new stores from moving inside Sandy's boundaries. Two applications, including one from Check City, are pending.

"There seems to be a real proliferation lately. [These businesses] go into prime locations on main thoroughfares," Coulam tells his passengers.

Although consumer advocates charge that the businesses exploit borrowers with interest rates upward of 400 percent, Coulam's primary concern is the stores' appearances. On the tour, he points out "garish" color combinations, shoddy building exteriors and glaring neon lights.

Still, some council members worry about the lenders' practices.

"I'm not real convinced they're a real legitimate business," Councilman Scott Cowdell says in an interview. He's concerned the lenders take advantage of people in "desperate" financial situations.

"I wouldn't want one on every corner . . . everywhere in the city," Cowdell says.

But Check City corporate counsel John Swallow, who guides the council members on their tour, argues that the industry is simply "misunderstood" and provides a valuable service.

"This is the bank for the under-banked - for people who don't have a deposit account," Swallow, a two-time Republican congressional nominee, tells council members as they arrive at a new Check City in Midvale.

"We don't force anybody to come into our stores."

Inside the Midvale store's entrance the annual percentage rate is posted near the door: 417.14 percent. But Swallow says that's misleading because payday lenders are only allowed to charge interest for 12 weeks, not the full year.

Typically a Check City customer will pay an $8 weekly fee for a $100 loan - cheaper than a $50 bounced check fee or a $39 fee for a late credit-card payment, Swallow contends. Store manager Rachel Lopez, a former customer, calls the service "a safety net."

The new Midvale store, lacking any neon signs and boasting a stone-and-stucco exterior, has a markedly different appearance than an older Check City one block away. Swallow tells Council members the industry is "maturing" and beginning to invest in quality buildings.

Councilman Steve Fairbanks won't be supporting any limits on the stores. Reducing competition would only allow the lenders to raise their interest rates higher, Fairbanks concludes.

"We have a free-market economy, and we ought to let it operate," he says in an interview. "Obviously, there are people who use these businesses, and they ought to have a choice."

Taylorsville curtailed the growth of payday lenders to allow room for other businesses - ones that produce sales-tax revenue - to move into the city, according to Economic Development Director Don Adams. In 2005, the 10-square-mile city of 60,000 people had 18 check cashing stores.

Those stores remain, but a cap of one per 10,000 people means no new branches can open in Taylorsville. The businesses in that central Salt Lake Valley city also have to be 600 feet apart.

Adams says the stores, pushed south by restrictions in West Valley City, ate up prime locations, and the industry's stigma prevented some businesses from locating nearby.

Invited to share Taylorsville's situation following Sandy City Council's tour, Adams also tells council members the stores spawned a marked increase in calls to police about forgeries, drug-related crimes and robberies.

"We are content with the way the regulation turned out. We believe that it's equitable," Adams says in an interview. "We're not telling the businesses they cannot be in here. We're just regulating how many can."

rwinters@sltrib.com