View full sizeBirmingham City Councilwoman Lashunda Scales Councilwoman Lashunda Scales asked for a delay on the payday loans proposal to give city lawyers time to review the ordinance in addition to making time for a public hearing on the issue. (Jeff Roberts/Birmngham News).BIRMINGHAM, Alabama -- The Birmingham City Council today
title pawn and check cashing businesses, instead agreeing to hold a public hearing on the issue.
City leaders today again delayed voting on the proposed limits for six weeks. Instead, Councilwoman Lashunda Scales, who sponsored the new rules, asked for a delay to give city lawyers time to review the ordinance in addition to making time for a public hearing on the issue.
Scales maintains her position that the city is inundated with the businesses that she said impair economic development.
"Economic development depends on the type of businesses that can employ members of the community as well as serve to be a true community friendly business" she said in an interview after the meeting. "These businesses have their own interest at heart; that's obvious. However my job and the job of the city is to protect the citizens from those who would take advantage of those who need that kind of service most."
A date for the public hearing has not been set. While the hearing would allow city officials to get input from residents, Scales said she's already heard from people who support her new rules, many of whom are former customers of the payday loan businesses.
Scales has said the businesses present high interest rates that force many to "recycle a habit of indebtedness that can never be repaid."
Birmingham's proposed ordinance is modeled after one passed in Midfield. However, that city is in court after a lender called the moratorium a violation of free commerce.
Charles Hunter, spokesman for Borrow Smart Alabama, the industry's trade group, said the Birmingham council was wise to take additional time.
"This is a complicated decision that will have significant impact on small businesses and consumers and might also carry substantial legal ramifications," he said. "As the council continues to work through this issue, we will absolutely support in any way we can."
Hunter has said his businesses provide a necessary service and are unfairly characterized. In addition, he said the moratorium would affect existing businesses because it would prevent them from either moving or transferring ownership, both of which require a change in business license.
Councilwoman Kim Rafferty has been a critic of the proposed ordinance, calling it legally unsound.
"There's been no review by the law department to correct language flaws and the ordinance we are using is an exact duplicate of the Midfield ordinance which is currently being challenged in court,"she said.
Still Rafferty said she agreed with the goals of the proposal.
"I can see the necessity for further regulation of this type of business in the city just as I would with liquor stores or when we had issues with the bingo halls and strip clubs," she said."The over proliferation of any business does not contribute to the integrity of any community."