News Column

Fresno payday lenders get new city rules, including space between businesses

June 29, 2014

By George Hostetter, The Fresno Bee

June 29--What began months ago as a controversial effort to regulate payday loan stores in Fresno has ended as a yawner.

Turns out everyone -- including the lenders -- thinks the new rules are a good idea.

The City Council on Thursday approved regulations that include two key provisions:

--New payday loan stores must get a conditional use permit before opening their doors. Such permits set operating standards.

--New stores must be at least a quarter-mile (1,320 feet) from any other payday lender.

No council member raised a peep of protest. None of the loan-industry representatives in the audience objected. A handful of industry critics trooped to the public microphone, and more were waiting in line, when Council Member Oliver Baines suggested everyone sit down because they were preaching to the choir.

The critics did as directed, then smiled at the 7-0 vote.

Baines got the ball rolling last November when he pitched a resolution directing staff to prepare a zoning ordinance amendment for payday lenders.

Baines at the time said his legislation "is very fair and balanced. It brings payday lenders in parity with other lending institutions of the city."

Baines said his proposal was not designed to put payday lenders out of business or impose a moratorium on new stores. He said the proposed amendment would reduce the concentration of payday lenders, which sometimes occurs in low-income neighborhoods.

Council members Paul Caprioglio, Clint Olivier and Steve Brandau voted against Baines' resolution.

Caprioglio said he supported the mandate for the special permit, but not the mandated quarter-mile separation. Brandau said the proposal is too much regulation.

Olivier didn't explain his stance.

Council Member Lee Brand, a business advocate who often has persuasive powers with other pro-business council members, praised Baines. Brand said the proposal was reasonable.

There was agreement at the November meeting that the poor should not be victimized, all people should have access to reasonable credit and debts should be paid in a timely manner.

Supporters of payday lenders said the industry delivers a valuable service largely ignored by other lenders. Opponents said payday lenders, with their high interest rates and rollover loans, often push desperate borrowers toward insolvency.

There was no enthusiasm in any quarter for the government to get into the payday-loan business.

Something happened in the past six months to make everyone see eye-to-eye. No one on Thursday gave a hint of what that was.

Fresno had 66 payday lenders as of Dec. 31, 2012, according to staff. A staff report map shows the lenders concentrated in a diagonal line stretching from northwest to southeast Fresno.

Existing payday lenders will not need a conditional use permit. They will need one if they expand.

Michael Alexander, president/chief executive of United Way of Fresno County, told the council on Thursday why it's important for City Hall to keep a close eye on payday lenders.

"The cycle of debt is the tragedy."

The reporter can be reached at (559) 441-6272, or @GeorgeHostetter on Twitter.


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Source: Fresno Bee, The (CA)

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