Council considers limit to payday loan growth

Wednesday, Sept. 7, 2005 | 9:06 a.m.

Concerned that the payday loan industry is growing too fast in Henderson, the City Council is mulling regulations that would limit its growth.

The council on Tuesday approved two conditional use permits allowing two more payday loan branches to open, but not before council members scolded the industry for what officials called predatory practices and warned that a new ordinance is being prepared for Henderson.

Unlike North Las Vegas, Henderson has no plans to enact a moratorium on payday loan companies seeking a permit. In July, North Las Vegas put a six-month halt on new permits while the city considers a range of ideas from limiting the number of licenses allowed per year or by population or even an outright ban on new businesses.

Henderson, however, is focusing on other regulations under consideration in North Las Vegas, including limiting the number of payday loan companies close to each other, to schools and to homes. Once a staff review is completed in upcoming months, the council will consider an ordinance.

There are 29 payday loan branches in Henderson. Council members said they are concerned that it's one of the fastest-growing businesses in the Las Vegas Vegas Valley.

The industry has come under fire by some as preying on problem gamblers, drinkers and the poor with high interest rates.

"This business is one of the most predatory on the face of the earth," said Henderson Councilman Jack Clark in citing some that charge 700 percent interest rates. "It preys on people who can least afford it. They have higher rates than loan sharks. They may not break any legs, but they are taking food out of the mouth of kids."

Other council members called on the Nevada Legislature to do even more in regulating payday loan companies and protecting the public. A new state law went into effect July 1 that limits the penalties that can be charged on delinquent loans. It stops garnishment fee and triple damages from being added to late paying loans and fees for early payment of the loan.

Despite their concerns, council members unanimously approved the request of Dallas-based Fastbucks Holding Corp. to open two branches at 709 E. Horizon Drive and 410 Marks St. The council went against the recommendation of the Henderson Planning Commission, which opposed both permits.

Despite staff recommendations for approval, planning commissioners said they didn't want the establishments too close to residential neighborhoods.

Representatives of Fastbucks told the council that the denial was unwarranted and that the business is compatible with neighborhoods because it will serve residents within a two-mile radius.

Company General Counsel Steve Solomon told the council that Fastbucks isn't like others in the industry that give it a "wild west" reputation. He said the company limits transactions of customers and said it is a good corporate citizen.

As a condition for getting its permits, Fastbucks agreed to let the council review its permit in one year.

Clark even suggested the city start a hotline that would take complaints on how the payday loan companies are operating in Henderson.

Fastbucks plans four branches in Henderson and 12 in Nevada in the next year.