Tempe is working on a plan that would restrict new payday loan and check-cashing stores in the city, addressing resident concerns that the industry's growth could get out of hand.
The plan came after complaints from residents that too many of these stores would be bad for Tempe neighborhoods and businesses.
At the City Council's request, the development services department recently began writing an amendment to the city zoning and development code that would require a public hearing for any loan store and restrict locations, said Chris Anaradian, Tempe development services manager.
The ordinance would create a separation clause preventing new stores from being built within a quarter mile of existing stores, Anaradian said.
"The purpose of the ordinance would be to prevent clusters of loan stores from forming," he added.
The public hearing process would allow Tempe residents to voice opinions before a new store opens.
The ordinance would not affect existing stores, Anaradian said.
Precisely which businesses will be included in the ordinance still needs to be decided, Anaradian said.
The council wants to regulate financial institutions that don't have to comply with federal regulations, as do established banks and other financial institutions, Anaradian said.
The Planning and Zoning Commission must make a recommendation to the council on the proposed ordinance before the city can take action, Anaradian said.
The first public hearing will be held Nov. 17, and the second public hearing and vote will be held Dec. 1, Anaradian said.
Anaradian also said there are about 12 loan stores in Tempe now. The city does not usually track businesses by type, he added.
The city should complete the proposed ordinance within the next week, Anaradian said.
The proposed ordinance will help existing stores by preventing competitors from moving in, said Sue Dusold, office manager of Alliance Cash Advance in Tempe.
"There does not need to be an overabundance of payday loan stores," Dusold said.
But the issue has placed negative attention on payday loan and check-cashing stores, Dusold said.
"Some people are making the broad generalization that all payday loan stores are picking on people that don't have any money," he added. "[Our service is] very personalized and friendly, we're not taking advantage of anybody."
Reach the reporter at emilia.arnold@asu.edu.
