"Migrant Mother" by Dorothea Lange, photographing for the Farm Security Administration, 1936

Rolling around slightly behind the scenes, being discussed at the committee level and before the Plan Commission, with some very limited discussion by the Council, has been a proposed ordinance that would regulate "alternative banking enterprises" — that's check cashing joints to most people.
 
The proposal would have required that any such business would need a Special Use Permit from the Council, ordinarily only after a favorable recommendation from the Plan Commission, to receive a building permit. Additionally, no such business could be located closer than 1000 feet from another; they would not be allowed in the freeway (and turnpike) overlays but the rest of the city was fair game; and even if that business was part of another business, such as a convenience store or supercenter, it would still be regulated if more than 100 checks were cashed per month.
 
The ordinance was discussed by Council at last night's work session and more this evening. I resisted this ordinance for a number of reasons:

• There are almost none in District 1 and those that are here have not had a negative affect.
• The reasons given by the staff, based on research from other cities, simply didn't seem to apply. One contention was that they drove out conventional banks. There is one on North Garland Ave and another on the frontage of SH 190. Several banks have opened since each has opened.
• Statements were made that they charge horrendous interest rates. There was never any documentation presented to verify that contention. It was said that they are predatory, feeding on the poor and weak. The Council does not have authority to regulate interest rates.

Even if everything said was true, I felt the ordinance would not help the situations described. First, the ordinance would apply only to new businesses, not existing ones.
 
Second, passing the ordinance would give those existing businesses a monopoly. Should a new business happen to be approved for an SUP, the business could not locate closer than 1000 feet to another such business. (It was starting to sound like other anti-business proposals from the past.)
 
And third, the consumer only benefits when there is competition between businesses. If the existing businesses were bad actors, a monopoly would only make the situation worse.
 
The one argument offered that I felt had merit was from Councilman Rick Williams. He said they could be poisonous in some neighborhood business settings, discouraging other new businesses. I think most people would agree that is very possible. The best way to control those circumstances is with a Special Use Permit.
 
Other Council members and I proposed amendments to the ordinance that would strip the restriction on overlay zones, the 1000-foot minimum rule, and, if located with another business, the AFE would have to being doing less than half the business.
 
There are situations and areas of the city that too many of these businesses could be detrimental. The prohibition against competition would have prevented innovative new business from competing. And the 100-check limit would have prevented large businesses from offering the service at high-volume, minimum-fee rates.
 
The ordinance then passed unanimously. Future Council decisions can be based on the merits of each case rather than being limited to arbitrary decisions with unknown consequences.