CC MTG DATE: 04/01/08
CITY OF SHOW LOW
STAFF SUMMARY REPORT
AGENDA TITLE: PUBLIC HEARING and Consideration of Ordinance No. 2008-05
Amending Article 15-1, Zoning Ordinance, of the Show Low City Code by
Amending Sections 15-1-21 and 15-1-60 Regarding Non-Chartered
Financial Institutions (Justen Tregaskes)
I MOVE to read Ordinance No. 2008-05 by title only since all Council members have a copy.
I MOVE to adopt Ordinance No. 2008-05.
At its meeting of March 25, 2008, the Planning and Zoning Commission voted 5 to 1
(Commissioner Isaacs opposed and Commissioner Leech was absent) to approve the
proposed changes to subsections 15-1-21 to create a definition of “non-chartered financial
institutions” and 15-1-60 to restrict non-chartered financial institutions to the C-2 zoning district
as a conditional use only and require a minimum of 1,320 feet between uses. The
Commission’s action included forwarding this recommendation to the City Council. Currently,
the Zoning Ordinance does not address non-chartered financial institutions.
Non-chartered financial institutions are also known as payday-loan or auto title-loan centers
that offer small, short-term loans that often have interest rates exceeding 400%. Typical
payday loan customers are those with cash flow problems, few lower-cost borrowing
alternatives, and often choose to “roll over” their credits to obtain additional money.
The Federal Trade Commission has issued a consumer alert about payday loans, considered
a form of sub-prime lending. There are strict regulations on any Federal Deposit Insurance
Corporation (FDIC) member bank that practices payday lending. The Federal Reserve and the
Office of the Controller of the Currency have banned payday loan practices altogether.
However, non-chartered financial institutions are not members of the Federal Reserve and are
not subject to FDIC regulations.
A non-chartered financial institution is defined as a business that, other than a state or
federally charted bank, credit union, mortgage lender, or savings and loan association, offers
check cashing services, auto title loans, and loans for payment of a percentage fee.
Specifically included are check-cashing businesses that charge a percentage fee for cashing a
check or negotiable instrument and payday-loan businesses that make loans on assignments
of wages received. Automobile dealers are not considered non-chartered financial institutions.
At least seven cities and one county in Arizona have created ordinances that limit the numbers
of these businesses allowed to operate in a certain area by creating a minimum distance,
usually 1,000 or 1,320 feet, between these businesses. The most-used distance is 1,320 feet,
which is a quarter-mile. For example, the City of Goodyear has established that 1,320 feet
between non-chartered financial institutions is the acceptable maximum standard. Some cities
also include a minimum distance of 500 feet from residential zones. In addition, most cities in
Arizona require non-chartered financial institutions to obtain a conditional use permit to
operate. Two cities that do not list non-chartered financial institutions as a conditional use
require special applications that are reviewed and, if appropriate, approved by the planning
and zoning director. A chart outlining these requirements is attached. The proposed changes
to Show Low’s Zoning Ordinance are consistent with those adopted in Goodyear and
Staff has scheduled the public hearing and possible adoption of Ordinance No. 2008-05 for
April 1, 2008. If adopted, the ordinance would become effective 30 days thereafter.
Ordinance No. 2008-05
Chart of requirements by other jurisdictions
CITY OF SHOW LOW ORDINANCE NO. 2008-05
AN ORDINANCE OF THE MAYOR AND COUNCIL OF THE CITY
OF SHOW LOW, ARIZONA, AMENDING ARTICLE 15-1, ZONING
ORDINANCE, OF THE SHOW LOW CITY CODE BY AMENDING
SECTIONS 15-1-21 AND 15-1-60 REGARDING NON-
CHARTERED FINANCIAL INSTITUTIONS
NOW, THEREFORE, BE IT ORDAINED by the Mayor and Council of the City of Show
Low, Arizona as follows:
Section 15-1-21, Generally, of the Show Low City Code shall be amended by the
addition of a definition for non-chartered financial institutions as follows:
Non-chartered financial institution: Any business, including accessory uses,
other than a state or federally chartered bank, credit union, mortgage lender or
savings and loan association, that offers check cashing services, vehicle title
loans, and loans for payment of a percentage or graduated fee. Specifically
included are check cashing and pawn shop businesses that charge a percentage
or graduated fee for cashing a check or negotiable instrument and “payday loan”
businesses which make loans upon assignment of wages received, or
businesses that function as deferred presentment services. Automobile dealers
shall not be considered non-chartered financial institutions.
Subsection (C)(1), Conditional uses, of Section 15-1-60, C-2 zone, general commercial,
of the Show Low City Code shall be amended to limit non-chartered financial institutions
to the C-2 zoning district only as a conditional use and require a minimum of 1,320 feet
between uses as follows:
Non-chartered financial institutions, provided they shall not be located within one
thousand three hundred twenty (1,320) feet of the same type of use.
Measurement shall be in a straight line from parcel boundary to parcel boundary,
including non-chartered financial institutions outside city limits.
Any person found guilty of violating any provisions of this ordinance shall be guilty of a
civil violation, except where otherwise specifically provided. Civil violations are
punishable by a maximum fine of up to $2,500.00 as provided in section 1-8-1(a) of the
City Code and A.R.S. §9-240. Each day that a violation continues shall be a separate
If any section, subsection, sentence, clause, phrase, or portion of this ordinance is, for
any reason, held to be invalid or unconstitutional by the decision of any court of
competent jurisdiction, such decision shall not affect the validity of the remaining
PASSED AND ADOPTED this 1st day of April, 2008, by the Mayor and Council of the
City of Show Low, Arizona.
Rick Fernau, Mayor
Ann Kurasaki, City Clerk
APPROVED AS TO FORM:
K. Kane Graves, City Attorney
City of Show Low Ordinance No. 2008-05 Page 2
City Zoning Use
District Permit Separation Requirements Notes
Avondale Shall not be within 1,320 feet of
the same use whether or not it is
Measured in a straight
located in the same city. In
line from the nearest
C-2 Required addition they may not be located
property line of each
within 1,320 feet of a tavern,
bar, cocktail lounge or an adult
Goodyear An application for the
establishment of a NCFI
A proposed NCFI shall not be
Not must be submitted and
located within 1,320 feet (one-
C-2 Required reviewed by the
quarter mile) from any other
(see notes) Community Development
Directory or their
C-2, C-3, C-4, May not be located within 1,000 Measured in a straight
C-5, PI-1, and Required feet of the same use whether or line from lot line to lot
I-1 not it is located in the same city. line in any direction.
Phoenix Measured from the
Shall not be located within 1,320 exterior walls of the
Not feet of the same type of use or buildings in which the
Required within 500 feet of a residential businesses are conducted
use. or proposed to be
County 1,320 feet from all other NCFI Measured from site
CB-2 and 500 feet from all residential boundary to site
South Measured from lot line to
No NCFI use will be within 1,000
Tucson lot line. NCFI group
feet of any other NCFI, nor be
Not application required; the
SB-2, SB-2A, within 500 feet of any residential
Required Zoning Administrator has
and SI-1 zone, public playground, and/or
(see notes) 7 working days to grant
park. No more than one NCFI is
or deny a NCFI group
allowed per lot.
Tempe Shall not be within 1,320 feet of
another NCFI measured by a These requirements shall
straight line in any direction also apply to NCFI which
from lot line to lot line. Nor shall are ancillary to another
zones and C-1
they be located within 500 feet existing or permitted use.
of a residential zone.
Separation between facilities of
C-2 and C-3 Required 1,320 feet and 500 feet between
the facility and residential zone.
(proposed) Measured from parcel
Shall not be located within 1,320
C-2 Required boundary to parcel
feet of another NCFI.
* NCFI= Non-Chartered Financial Institutions