Thursday, July 21, 2005 | 9:47 a.m.
North Las Vegas enacted a six-month moratorium on new payday loan companies Wednesday, but the industry opposes any regulations that limit their number in the community and distance from one another.
Two weeks ago the City Council imposed a two-week ban on processing of payday permits simply by setting the moratorium for a public hearing and vote on Wednesday. The council adopted the moratorium to give city officials time to develop an ordinance.
Staff will consider a range of ideas from limiting the number of licenses allowed per year, restricting the number of licenses by population, holding a lottery for licenses and even an outright ban on new businesses.
They will also review setting standards from their distance to one another and to subdivisions, establishment size and hours of operation.
North Las Vegas officials said the city, which has 25 such payday loan operations, has seen a substantial increase in applications for businesses, which are seen by some as preying on problem gamblers, drinkers and the poor with high interest rates.
North Las Vegas Mayor Mike Montandon said the city has imposed moratoriums in the past on other uses and is justified in doing so again because the city is growing so rapidly. A moratorium gives the city "breathing room" to deal with the issue, he said.
Kim Koster, treasurer for the Nevada Financial Services Association, which represents payday loan companies, said her group is not opposed to a moratorium that gives the city time to study the issue. She said her group is willing to work with city staff on developing an ordinance.
But Koster said they're opposed to any regulations on distance requirements or anything that limits the number of payday loan companies in North Las Vegas.
"We are against anything that eliminates competition," Koster said. "They would be protecting those people that would otherwise be forced out of business."
Payday loan operators said their industry is being unfairly tarnished by unscrupulous companies. They contend they are providing a service primarily to people who need cash before their next pay check to cover emergency expenses. Such small loans aren't available from banks whose overdraft charges and other fees are significantly higher, they said.
A new state law went into effect July 1 that limits the penalties that can be charged on delinquent loans. It stops garnishment fees and triple damages being added to late paying loans and fees for early payment of the loan.
Not everyone's happy with the city's decision to impose a moratorium. Chet Cox, the owner of payday loan company Cash Box, said it's unnecessary and discrimination against his industry.
Cox has filed a lawsuit against the city, which earlier this year rejected his permit at the northeast corner of Cheyenne Avenue and Martin Luther King Boulevard.
On Aug. 3 the City Council is scheduled to hear an appeal from city staff who oppose a permit to open a payday loan center at 2696 W. Ann Road, Cox said. He said Henderson approved a permit on Tuesday and that if the North Las Vegas City Council rejects his permit, he will file another lawsuit.
"I don't understand their reasoning," Cox said. "They don't do it for fuel stations or taco shops. They think they are immune from the rest of the county."
Henderson and North Las Vegas have few limits on payday loan companies now. Las Vegas prevents them from being closer than 200 feet to homes and no closer than 1,000 feet to other financial institutions, auto title and pawn shops. Las Vegas also limits hours and requires they be at least 1,500 square feet, according to a North Las Vegas city staff report.
Clark County has similar distance requirements to Las Vegas, but has no regulations on size and hours of operation, the report said.
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