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Arizona payday loan stores face restrictions

December 22, 2005 - Mesa, Arizona

Two months after a fatal shooting at a west Mesa payday loan store, the City Council has voted to draft an ordinance preventing the clustering of such businesses.

Monday's 4-3 vote could force payday and auto title loan stores to be bound by the same policies governing tattoo parlors and pawn shops, which have to be at least 1,200 feet apart in Mesa. The draft would go through the Planning and Zoning Board before coming before the council next year.

Mayor Keno Hawker and council members Tom Rawles and Janie Thom cast dissenting votes.

Rawles called regulation of the shops "absurd," and Thom said the belief that such businesses only target low-income areas is incorrect because there is one location adjacent to the upscale Val Vista Lakes neighborhood.

"This is not to eliminate these. This is to stop the further clustering," said Vice Mayor Claudia Walters, who added that other businesses are deterred from coming to areas crowded with payday-loan stores.

The stores are common in west Mesa, an older, generally lower-income part of the city that has struggled in recent years to redevelop itself and combat blight. That part of the city is home to one of the heaviest concentrations of payday-loan stores in the state.

In October, the owner of the America's Cash Source at 1940 W. Baseline Road shot two armed robbery suspects, one fatally, after they walked into the store with handguns and one fought with him, according to police.

To date, there are 95 licenses issued for payday loan stores with Mesa addresses for home or branch offices, nearly two-thirds of them on or west of Gilbert Road, according to a council staff report.

Payday loan and auto-title loan stores are categorized as "financial/general office" and are permitted without separation requirements, according to a staff report sent to the council.

Peoria and Tempe have combated the spread of payday-loan stores by requiring a use permit and separation between establishments.

News Source

The Arizona Republic (Mesa Edition), reported by Justin Juozapavicius

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