County gets closer to approval of payday, vehicle title, high interest lenders

After several work sessions and a public hearing, the Chesterfield County Planning Commission approved an ordinance which would allowing alternative financial institutions (AFIs) to be located here. The Board of Supervisors would also have to approve the controversial ordinance.

AFIs are lending institutions that provide short-term, high-interest loans to individuals; such as check cashing establishments, motor vehicle title lenders, pawnbrokers, payday lenders, precious metals dealers and similar individual lenders. Banks, credit unions or savings and loan associations are not included in the ordinance. Any proposed AFIs would also be required to obtain a conditional use permit, which can only be approved by the Board of Supervisors.

In addition, only one AFI could be permitted in a single building, although an AFI could combine services such as check cashing in addition to vehicle title loans and so forth. AFIs could only be permitted in areas designated by the new comprehensive plan as a general commercial business area; be spread at least a mile apart and not located in residential areas. Bermuda Planning Commissioner, Dale Patton said that the limit could cause problems.

“I know that we have TitleMax waiting in the wings, and if they are approved they will be the top [AFI] in Virginia because we have eliminated their competition,” Patton said. “[Because of the rule] we are effectively limiting commerce to their [TitleMax] benefit.” Patten also said that any of the AFIs should be able to cash checks as part of their business model as do many businesses. Dale District Planning Commissioner, William Brown countered that other businesses do not charge 15 percent of the check amount to cash a check. Changes were made on the proposed ordinance to allow checkcashing as part of another AFI function.

Colonial Heights, which has a number of AFIs located on Boulevard, has allowed the lenders to locate within walking distance of residential neighborhoods or in revitalization areas.
In March the Board of Supervisors approved five consumer finance establishments in the county, two of which are located on Jefferson Davis Highway near Route 10, one at Iron Bridge Plaza, (Water Tower Shopping Center) and two on Midlothian Turnpike.

Brown, argued that the county should not allow AFIs in Chesterfield at all, citing that the businesses tend to lower property values. “After speaking with the county attorney, I think this is about as tough as we can get,” Brown said.
The commission approved the proposed ordinance unanimously. The Board of Supervisors must consider the commission’s action before voting on the proposed ordinance.

Comments

AFIs

This is cool! I guess, with the presence of AFIs, many people could avail of vehicle title loans quicker and with easy access. Thanks for sharing this news!

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