In a split vote, the Chattanooga City Council voted today to put a moratorium on city permits for so-called "alternative financing" businesses.
The resolution, which passed 5-4, prevents the city Land Development Office from issuing permits to new payday lenders, check-cashers, title loan businesses or other such businesses until the council votes on a separate ordinance next week that keeps new alternative financing businesses from clustering in an area.
The ordinance next week would bar alternative financing businesses from opening within 500 feet of residential areas or within a quarter-mile of other similar lenders
Council members Chris Anderson, Carol Berz, Moses Freeman, Russell Gilbert and Yusuf Hakeem supported the resolution. Chairman Chip Henderson, Larry Grohn, Jerry Mitchell and Ken Smith did not.
Jabo Covert, senior vice president of government affairs for Check Into Cash, the largest alternative finance company in the state -- and one of the largest in the nation, told council members he both supported and opposed the resolution and ordinance.
He was happy to see the actions, because it made business easier for his company.
"We do support it, because it will limit our competition. We are the largest provider in Tennessee, so to some extent it prevents our customers from going to our competition," Covert said.
But he said the ordinance "picked some [alternative financing businesses] but not picked others."
The council will vote on first reading of the ordinance to set distance limits between loan businesses next week.
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