Mesa plan to restrict payday loan stores cited as racism

August 18, 2006 - Mesa, Arizona

One councilman says Mesa's attempts to prevent the clustering of payday loan stores is akin to racism.

"It's nothing but an attempt to keep Hispanics out of White neighborhoods," said Councilman Tom Rawles, who pointed out that the primary users of such businesses tend to be poor and Hispanic. "This is racism, bottom line."

But other city officials say any ordinance would be aimed at reducing, not eliminating, the stores.

Thursday, the City Council proposed a requirement that payday stores be at least 1,200 feet apart, similar to ordinances in Phoenix, Peoria and Tempe.

A second option, recommended by the city's Downtown Development Committee, would have been even more restrictive, establishing a 500-foot radius around every residential district in Mesa.

Under that option, only large commercial and industrial areas, such as Fiesta Mall, would be eligible for new store sites, according to the city.

The 1,200-foot rule also would have also applied.

Either option would not affect the status of existing stores.

Rawles, a Libertarian who wants the market to decide where a business should go, said he sees "no rational connection" between the proposed restrictions and the business.

"Should we regulate the number of McDonald's?" Rawles asked. "What's different about a payday loan store?

Payday stores are common in west Mesa, an older part of the city that has struggled in recent years to redevelop itself and combat blight.

That part of the city is home to one of the heaviest concentrations of payday-loan stores in the state.

"I'm not a fan of the businesses, but I don't want to become a regulating body," said Vice Mayor Claudia Walters, on finding the right ordinance to eliminate the perception that neighborhoods with payday stores are somehow troubled.

There are more than 110 payday loan stores in Mesa, the bulk of them on or west of Gilbert Road.

News Source

The Arizona Republic, Justin Juozapavicius, Staff Writer

Related Stories - Arizona

• Payday lenders, state reach deal on curbing fees [March 18, 2007]
• Hot line helps Tucsonans avoid predatory lenders [November 4, 2006]
• Credit union to offer cheaper alternative to payday loans [October 24, 2006]
• Limit need, not loan shops [October 14, 2006]
• Payday lenders target young military families [September 5, 2006]
• Mesa plan to restrict payday loan stores cited as racism [August 18, 2006]
• Payday-loan controls nixed [May 6, 2006]
• Payday-lending reform bill is next to useless [May 5, 2006]
• Payday loan survey raises questions [March 17, 2006]
• Cash advance to computer upgrades [February 1, 2006]
• Payday loan customers getting older [January 26, 2006]
• Arizona payday loan stores face restrictions [December 22, 2005]

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