|TitleMax recently moved into the building on Little River Turnpike formerly occupied by Jerry's Subs.|
The Fairfax County Board of Supervisors on Nov. 17 approved a Zoning Ordinance amendment to restrict title and payday lenders. These businesses, referred to as “alternative lending institutions,” prey on the poor, charging interest rates as high as 300 percent.
They would be prohibited in commercial revitalization districts (CRDs) and commercial revitalization area (CRAs), which tend to be older areas where the county is trying to encourage redevelopment. Parts of Annandale, Bailey’s Crossroads, and Seven Corners are CRDs.
The amendment would establish a new definition for these institutions. They would be permitted in certain areas zoned for regional retail (C-7) and highway commercial (C-8) uses in non CRD or CRA areas, only under these conditions:
- They would have to be located within a shopping center, as opposed to be being a stand-alone building.
- They could not be located adjacent to or across a public right-of-way from “specifically identified sensitive land uses,” such as a public use, a child care center, or a place of worship.
- They could only be open from 8 a.m. to 6 p.m.
- The storage or sale of automobiles would be prohibited on these sites.
The amendment applies only to new title and payday lenders; existing businesses would not be affected.
Data from the Virginia State Corporation Commission (SCC) shows the number of title and payday lenders operating in Fairfax County increased from 16 in January 2012 to 31 in August 2015.
There are 10 of these businesses in Mason District, including three Title Max stores, two Advance America, two Loan Max, two Fast Auto Loans and one Ace Cash Express store. Those stores attract many borrowers from Maryland the District of Columbia, which have have stricter laws on alternative lending.
These businesses tend to cluster disproportionately in low to moderate-income areas, around concentrations of lower-wage workers, and near military bases, the county staff report states. They also tend to cluster in the same areas, such as along Arlington Boulevard, Little Turnpike, and Richmond Highway.
Predatory lenders target poor and desperate people, who often don’t understand what they are signing and end up having their vehicles repossessed.
The staff report sites a study by California State University, Northridge, that says a concentration of “fringe banking institutions,” such as payday lenders, “may constitute a visible sign of neighborhood decline and signal to potential troublemakers that informal social control is weak at best.”