District 8, Hamilton County Commission Tim Boyd speaks on October 12, 2010.

Hamilton County Commissioner Tim Boyd wants the state Legislature to make payday lenders pay more money to local governments, but two lending companies said they would oppose any new fees.

Boyd spoke before the county's legislative delegation in December and asked them to consider "transaction fees" on payday lenders, check cashing companies and title pawn companies, to generate revenue for cities. There are no details on what the fees would be or how they would be collected. Under his plan cities would have the option to establish fees.

State Rep. Vince Dean, R-East Ridge, said the proposed bill filing deadline is Feb. 17, but he has not agreed to sponsor a bill based on Boyd's proposal. He also is not aware of any other legislators who might be interested in sponsoring a bill.

The lenders, which typically loan smaller amounts of money than a traditional bank, do not generate sales taxes, but Boyd said these businesses use city services.

"I would like for them to let the municipalities have an option to charge transaction fees on these unregulated lenders," Boyd said. "To me it's just fair. Out here in East Ridge there's a disproportionate number of them, and they don't collect any sales tax like their neighbors."

Boyd said these companies flourish in East Ridge. East Ridge Mayor Brent Lambert said he's heard of Boyd's proposal but said he would need to be sure a transaction fee would be legal under state law. He said by his count there are at least two dozen of the companies in East Ridge, most of them along Ringgold Road.

"If we cleared that hurdle, it certainly would be within the realm of consideration," Lambert said.

Chattanooga City Council Chairman Manny Rico said he needs to know more about Boyd's proposal. He said fees could have the consequence of harming the poor, who depend on these services.

Red Bank Mayor Monty Millard also said he needs to study the issue more.

Ryan Harris, a spokesman for Cleveland, Tenn.-based Check Into Cash, which operates a store in East Ridge, said the company would not welcome the fees.

"Our company pays numerous different kinds of taxes," Harris said. "Each transaction is regulated at the state and federal level, as well as providing jobs and paying rent to local landlords. Obviously we would be strongly opposed to being singled out for any kind of additional tax."

Marian Allen, branch manager of Check Advance of America in East Ridge, called Boyd's proposal a "bad idea."

"I don't think it would help the check advance companies at all because that would be more revenue they're paying out," Allen said.

Dean said Boyd's idea is "something we probably should look at." Dean said he understands the issue from his time on the East Ridge City Council. But he also said there's another side to the argument that should be considered.

"If those businesses were to go out of business, there would be that many vacant buildings in East Ridge," he said. "It already has a lot of vacant buildings, so they have to weigh that into consideration. They have to determine whether they would rather have those businesses or vacant buildings."

Contact staff writer Dan Whisenhunt at dwhisenhunt@timesfreepress.com or 423-757-6481.

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