CLEARFIELD — Predatory lending spurred changes to regulations regarding payday establishments.
With Clearfield having one of the lowest median incomes in the county, a city analysis determined that the city is susceptible for such establishments.
It states that “payday lenders cluster in low to moderate income neighborhoods in urban areas.”
Thus, the analysis determined the city is more likely to see a clustering effect for this type of business, which can ultimately negatively affect the city.
This is due to a number of mentioned factors, including that other commercial retail businesses do not want to locate in close proximity to payday lenders.
The city council recently approved changes to the land use ordinance, which includes supplementary standards for payday lending establishments and modifications to the pawn and secondhand business definitions.
City Manager Adam Lenhard said changes, specifically to payday lending groups, generated quite a bit of discussion. Existing businesses will be grandfathered and thus unaffected by the changes.
He added that talk of changing regulations has been ongoing for two years ago. The planning commission has been looking at and studying what changes should or could be made to the ordinance.
Lenhard said concern over such establishments is not just limited to Clearfield, but is an issue being talked about at the state level as well.
“People get themselves into really difficult situations,” Lenhard said. “There are those who believe that those types of establishments are predatory. People tend to get in a lot worse situations than they would be in otherwise.
“That’s why there is a need for this regulation,” he said.
Approved changes include requirements that payday lending establishments cannot be within one mile of one another and that only 1 per 10,000 residents per capita would be allowed.
“We want to prevent a district of these types of businesses,” Lenhard explained.
A payday lending establishment is defined as any business involved in check cashing, deferred deposit lending, or any other similar types of business licensed by the state pursuant to the check cashing, according to the city resident.
The city currently has five payday lending establishments in its boundaries.
According to the approved changes, if any existing business fails to renew its Clearfield license or vacates its premises, then that business and use is deemed terminated.
If those businesses wanted to reopen, they would then be subject to the newly approved regulations.
Changes to these establishments are expected to limit detrimental effects that a high concentration of establishments could have, mitigate the clustering effect and increase the likelihood of attracting high-quality retail, according to the city study.