East Ridge eyes cap on lenders

How many short-term lending businesses does a town of 20,000 need?

East Ridge city leaders think 26 is too many for their municipality, and they want to do something about it.

The city is studying ways to limit the number of pay-day lenders, check cashers and title pawn broker businesses.

"When we look at the number of check-cashing places on Ringgold Road, which is a pretty short route, you have to ask when is enough enough," Mayor Mike Steele said.

The businesses choose to locate in East Ridge because the law in nearby Georgia makes short-term, high-interest lending more expensive for the borrower, Mr. Steele said. But he said his city is overrun with that type of business, as well as with used car lots.

"Some of our check-cashing businesses do a wonderful job keeping their storefronts attractive, and there are others who do not," Mr. Steele said.

Ryan Harris, a spokesman for Check Into Cash, the Cleveland, Tenn.-based short-term lender, said his employer is willing to cooperate with East Ridge but does not want limits placed on their type of business.

"We want to work with East Ridge in their community revitalization, all the while ensuring that our customers have access to the short-term lending that we provide," Mr. Harris said. "We want a partnership, but we want to protect our business."

At least one East Ridge resident said he would welcome a cap on the lenders because they increase the city's "seedy" reputation.

"I think it's a pretty good idea," said Dick Cook, who lives on Grandview Avenue. "The council has the ability to pass an ordinance limiting the number of these types of businesses. I'm just not sure why they haven't done it sooner."

A citywide revitalization plan is aimed at drawing more businesses that will attract and retain residents, Mr. Steele said.

"We want people to look at East Ridge and say, 'That city has everything I need, and I don't need to go anywhere else,'" he said.

Mr. Harris said Check Into Cash would be willing to comply with zoning requirements that would limit bright and flashy banners and other displays, which is another component of the short-term lending businesses the mayor finds objectionable.

The mayor said existing short-term lending businesses would be exempt, but as those businesses closed new enterprises would not be allowed.

Check Into Cash would not be agreeable to limiting the short-term lending industry in any way, Mr. Harris said.

The business' three most profitable locations are on state borders with Georgia, he said. Phenix City, Ala., North Augusta, S.C., and East Ridge are the busiest branches, he said, and that's because those cities are very close to the Georgia line. Borrowers know that Georgia imposes certain lending fees that other states do not, Mr. Harris said.