Selma votes to ban new payday loan businesses - Action News 5 - Memphis, Tennessee

Selma votes to ban new payday loan businesses

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Selma is banning new payday loan businesses from opening, but current ones will not be affected. Selma is banning new payday loan businesses from opening, but current ones will not be affected.
SELMA, AL (WSFA) -

Selma resident Lorene Brown says if it hadn't been for the Great American Payday store, she wouldn't have had the money for her children's college tuition.

"With today's economy being what it is, sometimes you have a take a loan like this and that's what I did," Brown said.

People who typically take out loans at payday loan stores are those who have poor credit scores and unable to obtain a loan from a bank.

Still, it was a sad story that prompted Selma city councilman Michael Johnson to push for a 90-day ban on new payday stores in the city. Johnson says a payday loan shop took advantage of a friend, a friend who ended up losing his home. The city council voted in favor of Johnson's proposal with a unanimous vote.

"It was a situation where he could no longer afford the payments and the interest rate just kept compounding and they took his car," said the councilman.

Johnson says his friend has since died.

Anthony Moore called the councilman's move 'misguided.'

"I didn't realize Selma's tax base was strong enough where you could afford to prevent businesses from coming here," said Moore who manages Great American Payday.

State law allows payday loan stores to charge an interest rate of more than 17% but Moore argues he has the discretion to charge less.

"We sometimes do that. In fact, we'll tell them just bring us some cash," said Moore.

Either way the ordinance has the full backing of the mayor.

"We don't want to prevent businesses from coming but at the same time we don't want our citizens to suffer because of it," said Mayor George Evans.

Mayor Evans says there is a good chance the council could extend the ban once the initial 90-days are up.

As for Anthony Moore he is so upset about this ordinance he is thinking about shutting down his business altogether.

Councilman Johnson says the reasoning behind the 90-day ban part of the ordinance is to slow the growth of payday loan stores in Selma, a cooling off period. The city has at least 5 of these types of businesses.

"We just don't want any more payday loans in Selma,' said Johnson.

The ordinance is effective immediately.

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