RIVERDALE -- Officials are considering an ordinance that would restrict title loan companies in the city.
"With the growth of all these types of businesses lately, cities are concerned how to prevent a flooding," said City Attorney Steve Brooks. "We need to make sure we don't have too many of these businesses."
The planning commission recommended allowing title loan companies only in C3 zones as a conditional use, similar to requirements governing pawn shops and payday loan/check cashing businesses. The recommendation would mean title loan companies would have to be located 500 feet from residential zones because of the businesses' "predatory" nature.
However, title loan company owners claim their business fits better into a financial institution category than a payday loan category.
"It is something completely different than a check-cashing store or payday-loan type of service," said Mike Medina, retail specialist with Mountain West Retail Investment. "It is regulated totally differently and has different customers, someone who has equity or assets, that needs some liquidity. Rates for loans are significantly less."
City Administrator Larry Hansen, a former chief lending officer of a financial institution, disagreed.
"I equate (title loan companies) more closely with pawn-shop lending and check-cashing facilities in structure and type of lending," Hansen said. "There is a considerable difference between title loan companies and other lending institutions."
Jim Baker would like to lease his commercial property, formerly occupied by Truly Nolen Pest Control to American Title Loans, which has applied for a business license with the city. However, the property at 4224 Riverdale Road is too close to a residential area, according to the planning commission's recommendations.
"I understand the desire to regulate these types of businesses and where they go in your city," Michael Debbenham, a representative of American Title Loans, told the city council. "But we offer the same service that a car dealership or bank or credit union does."
Councilman Norm Searle said he would like to see how other cities have handled title loan company restrictions.
Councilwoman Shelly Jenkins moved to table accepting the planning commission's recommendations so the council could do more research. She said that the nearby residential area in question would likely convert to commercial zoning in the near future. At the same time, Jenkins said, she didn't want to discourage a small business from locating within city limits.