TITLE
Recommendation to adopt a Minute Order pursuant to Chapter 21.50 of the Long Beach Municipal Code and request City Attorney and the Planning Commission, in cooperation with the Development Services Department, to undertake a city-wide study of the City's existing zoning regulations as they relate to so-called Payday Lending, Car Title Loan Lending, and Short-Term Consumer Finance Lending; and further request City Attorney to prepare an interim zoning ordinance initiating a moratorium for a period of one year temporarily prohibiting the above described land uses until such time as the Planning Commission and Planning staff have completed their study and formulated a recommendation for the City Council's consideration.
DISCUSSION
The inability of lower income consumers with poor credit history to obtain certain services from federally insured banks and lending institutions has resulted in a two-tiered financial services industry. More financially stable consumers are generally able to use traditional banks or credit unions, which typically charge lower fees and interest rates and issue loans that are heavily regulated by either the federal or state governments. Lower income financially vulnerable consumers, on the other hand, often have to rely upon the alternative financial services industry for the same services. Predatory lenders typically seek out young or financially inexperienced borrowers who may have bank accounts and steady jobs, but also have little in savings or flawed credit or have hit their credit limits. Predatory loan products feature high fees and interest rates, with some requiring large balloon payments. Oftentimes lenders engaged in providing such loans obfuscate the comparative cost of their product with other options that may be available to the consumer.
So-called "Payday Lending", "Car Title Loan Lending" and "Short-Term Consumer Finance Lending" are part of the growing alternative financial services industry. Numerous states and...
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