Payday Loan Times

Leaders in Rock Hill have decided to make it tougher for new payday lenders to open after the number of businesses in the city offering the short-term high-interest loans tripled in six years.

The City Council passed zoning laws on the businesses Monday night, banning new savings account payday loan lenders from opening within 300 feet of neighborhoods, churches and schools and within 1,000 feet of existing lenders.

The rules also won’t allow lenders to open in stand-alone buildings, requiring them to be in shopping centers or supermarkets of at least 30,000 square feet.

Six years ago Rock Hill had less than a dozen no fax payday advance lenders. Now the city has 38, officials said.

The boom happened after North Carolina, just 10 miles to the north on Interstate 77, banned payday lenders. Georgia also has banned the businesses.

Rock Hill officials said they want to prevent payday lenders from opening near each other because they often refer customers who cannot pay off their loans to a lender next door, where they get another loan.

The bad credit cash loan lending businesses argued against the new rules at Monday’s meeting.

“Are you going to start zoning out McDonald’s because it’s bad for your health? If you take away our product, all you’ve done is take away one of the tools that folks have to choose from when they find themselves in need of money,” said Jamie Fulmer, director of investor relations for Spartanburg-based Advance America, the nation’s largest payday lender.

Providers of payday cash advances typically offer loans of several hundred dollars for several weeks. The current cap on interest in South Carolina is $15 for every $100, which works out to 400 percent interest annually.

Fulmer said the quick cash can actually save customers money compared to fees from a bounced check or having to get their utilities turned back on.

“If you eliminate payday lending, you’ve done nothing to address the fact that people have short-term needs,” Fulmer said.

City leaders said they decided to take action on their own after state lawmakers failed to pass new regulations on the industry during this year’s session.

The zoning rules will not affect fast payday loan lenders already operation in Rock Hill.

SOURCE: The Charlotte Observer