LAYTON -- There are 17 title loan, payday loan and deferred deposit lending businesses in Layton, a number city officials have deemed too high.
In response, the city council has taken action to eventually bring that number down.
Thursday night, the council adopted an ordinance that regulates those lending businesses. The ordinance caps the number of businesses allowed in the industry, while eventually lowering the number to 13, and prevents them from existing within 1,500 feet of each other.
Several other cities have similar regulations and Layton long-range planner Peter Matson said Layton did not want to be the last one to the party.
"(Lending businesses) serve a purpose or obviously they wouldn't be in place," Matson said. "We didn't want to take it so far that the market was taken out of play."
The ordinance is the result of several months work.
"Overall it is something we can live with," said Wendy Gibson, spokeswoman for Utah Consumer Lending Association. "It's not perfect, it's not great, but its something the industry can live with."
Gibson said her industry has been wrongfully targeted by cities looking to regulate the number of businesses operating.
Gibson said that Layton handled the process better than other cities by sending out a notice to everyone in the industry letting them know the city was discussing the regulations in planning commission meetings. That allowed those in the industry to give input and help educate city officials about the lending business.
Gibson's main objection is that limiting competition is not good for business or the consumer in the free market.
"The market is really the best indicator of what's going to work for an industry," Gibson said. "Limiting any type of company, no matter what it is, is not good news for the consumer."
Under Layton's ordinance, there will be a cap of 13 title loan, payday loan and deferred deposit lending businesses. However, all existing businesses will be grandfathered in. Layton came up with 13 because the city's estimated population at build-out would be 130,000, and city officials want a ratio of one such business per 10,000 residents.
Should a business close its doors and sell its location to another business in the industry, that new business would be allowed to operate under the grandfather clause. However, if the new owner of the property is not in the lending industry, then no lending business can return to that location.
"We feel it's a fair balance," Matson said. "We're kind of keeping an eye on them and having a goal to work toward, but we're not shutting them down because people use them and they do serve a purpose."