News Column

Moratorium extended on permitting short-term lenders to set up shop

July 29, 2014

By Patrick McCreless, The Anniston Star, Ala.

July 29--Local officials have given themselves another three months to finalize regulations on short-term loan businesses before any new ones can open in Anniston.

During its Monday meeting, the Anniston City Council extended its ban on the opening of new short-term loan businesses in the city by three months. City officials want more time to finish proposed restrictions on such businesses, which they say hurt low-income residents and the economy.

The moratorium continues a six-month ban that began in February and prohibits any new payday lenders, check cashing, title loan, car title loan or any similar type of short-term loan business from opening during that period.

There are about 15 such businesses currently in the city limits, most of which are clustered along Quintard Avenue.

City Manager Brian Johnson said he believes he can have an ordinance with new regulations ready for the council to approve in two weeks at the earliest.

"We don't necessarily need the three months ... we just want to make sure we're having a deliberate and methodical look at this," Johnson said of the ordinance.

Anniston's proposed regulations include limiting how many new short-term loan businesses can open in the city based on population and location. The regulations are expected to curb the growth of such businesses and, in the long term, shrink the number of them in the city overall.

Payday lender stores offer money based on a person's income. In Alabama, payday lenders are allowed to charge 400 percent annual interest rates on their loans, which equates to about $17.50 per $100 loaned.

Mayor Vaughn Stewart said the council wants to do whatever it can to better regulate short-term loan businesses.

"We do not take well to these businesses and their predatory lending practices," Stewart said of the council. "We just feel like they promote hardships to a substantial portion of the community and that they need to be regulated because of that."

Also during the meeting, the council gave Johnson permission to negotiate a contract with a potential city finance director.

"I haven't hired him yet and I can't hammer out a contract if I don't have permission," Johnson said.

Previous city Finance Director Danny McCullars resigned several months ago, Johnson said. In the meantime, the city has had interim Finance Director Brandon Phillips.

Johnson declined to say why McCullars resigned or provide details on his potential replacement until the hire is official.

In other business the council:

[BULLET] Reappointed Derrick Foster to the parks and recreation board.

[BULLET] Appointed Martinez Hall to the transit authority board.

[BULLET] Appointed Takisha Hall to the zoning board of adjustments.

[BULLET] Applied for a $243,976 grant with a $57,810 match for Anniston Multi-Modal Transportation Center.

[BULLET] Approved the purchase of a $43,015 CNC router for the Anniston Museum of Natural History and the Berman Museum.

Staff Writer Patrick McCreless: 256-235-3561. On Twitter @PMcCreless_Star.


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Source: Anniston Star (AL)

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