Several businesses offering pay day lending are located near the Tennessee/Georgia border on Rossville Boulevard.But those in the industry say it's all politics. There's no tide of new lenders to stem.
Last week, the council narrowly passed a moratorium on new building permits for alternative financing businesses. The ban will stay in place until a proposed zoning ordinance that would bar such businesses from opening near other, similar sites passes or fails. A first reading of that ordinance is set for Tuesday.
The proposed zoning change, drafted by council members Russell Gilbert and Carol Berz, would prevent such businesses from opening within 500 feet of residential areas or within a quarter-mile of similar lenders.
But Jabo Covert, senior vice president of government affairs for Check Into Cash, the largest alternative finance company in Tennessee, said the city is "creating a solution without a problem."
Three of Check Into Cash's 1,100 U.S. stores are in the city limits and the company has no plans to open more, Covert said.
"They are railing against a problem that doesn't exist, or I'm not a part of," Covert said. "It's one of those deals where you felt like there was an inside joke going on that you weren't in on."
The moratorium passed by the council doesn't actually prevent payday lenders from opening up shop.
Deputy City Attorney Phil Noblett said the moratorium only prevents new title loan, payday lending or check-cashing businesses from building new structures in the city.
Buildings that are already outfitted with lighting and plumbing - and require no further construction permits issued by the city's Land Development Office - can open as alternate financing shops with no problem. The moratorium doesn't bar new business licenses, he said.
That's why Chairman Chip Henderson didn't vote for it.
"I don't think placing a moratorium on permits through the Land Development Office is going to stop a payday lender from setting up shop," Henderson said. "I didn't see a purpose in it."
As to the zoning ordinance, Henderson is torn.
"I've just always thought free enterprise should determine what we have and what we don't have - unless it's detrimental to the public. But that's where the gray area is, and I'm undecided," Henderson said. "I don't know what it's like to be in that situation [to need a payday loan] and not have that available to me."
City spokeswoman Lacie Stone couldn't say Friday how many alternative financing businesses were active in the city, because neither the Land Development Office nor the city treasury track permits based on that type of business.
Further, state law exempts payday lenders from paying business tax, because they are financial institutions, she said.
Contact staff writer Louie Brogdon at lbrogdon@timesfreepress .com or 423-757-6481.