Councilman looks to crack down on title loan companies - WMC Action News 5 - Memphis, Tennessee

Reported by Jamel Major

Councilman looks to crack down on title loan companies

MEMPHIS, TN (WMC-TV) - In the tough economic times, some people are turning to pay-day loan agencies to make ends meet. But Memphis City Councilman Bill Morrison has a plan to keep them from becoming a fast growing problem.

When times are tough, Amber Lane relies on payday and title loan companies for help.

"They're a good source if your short on income or if you need cash right away," Lane said.
  
If Memphis city council gets its way, payday lenders and car title loan shops will face stricter rules about where they can and cannot open. Councilman Bill Morrison said many of these businesses target poor areas, leaving a bad stigma on the communities around them.

That is why he's pushing for regulations prohibiting newly built payday lenders from being within a thousand feet of each other.

"It just brings an element that you don't want to be around. It doesn't promote economic growth. People who are going to these places are usually in financial trouble or crisis," Morrison said.

Lane disagrees.

"It's not like it's a strip club or a place that sells alcohol, so I don't see what harm is being done," Lane said.

But Morrison said there are more than a hundred "fringe" lenders in Shelby County and he is concerned about the predatory effect these businesses have on customers. Things like charging them large fees for a paycheck advance.

"When you're paying 300 percent on a loan, nobody can get out from underneath that. No matter how much money you make," Morrison said.

Under current zoning codes, title loan and payday lenders fall under the category of banking. That means they don't have to submit an application saying what type of business is being opened.

However, Morrison hopes to change that by making sure these lenders have their own zoning ordinances and standards to follow.

The zoning ordinance is scheduled to be presented to the Land Use Control Board Thursday morning at 10 am.


Click here to e-mail Jamel Major.

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