UPDATE: The first hurdle was passed at council Tuesday night, that could mean some changes for local businesses.

Mayor Andy Berke has proposed a new zoning ordinance to keep the number of "predatory lenders" to a minimum.  

The proposal would no longer allow payday lenders to have a business within close range of a neighborhood, or another payday lending business.  

The first reading of the ordinance passed before the City Council Tuesday night, the second reading is next week.


Jabo Covert with Check into Cash says they're just doing what any business would.

"We locate on busy roads where people travel to and from work for convenience," said Covert.

He says their company, headquartered in Cleveland, only operates three businesses within Chattanooga city limits. He says they've been in the city for over 15 years and have no plans to add more.

"Chattanooga is not a city that's large enough to support any more than what we have now and actually the number of stores across the state have been declining, not increasing," said Covert.

He says Check into Cash now has 200 fewer stores across the country than they did a few years ago and for that reason alone he says he doesn't understand the purpose of the ordinance.

However Mayor Andy Berke says the people have spoken.

"What I've heard over the last several years is that people are tired of seeing all of these payday lenders populating their roads and really taking money out of our community," said Mayor Berke.

But Covert says they're just providing a service that's needed.

"We did not invent the demand, we are simply servicing the demand," said Covert.

Mayor Berke says he believes these lending businesses attract more crime, deter other businesses and prevent new development.

"What we can tell is if you look at the different areas around our city, we see disinvestment where you see a disinvestment of payday lenders," said Mayor Berke.

Covert disagrees.

"We've got the most upscale restaurant and hotel in town right next to our parking lot so I'm not sure exactly what anyone's point is," said Covert.

He says they aren't angry with the ordinance, that it will help their business by keeping other competition out. But they would have liked to have been involved with the process and for there to have been a real reason for it.

The first reading of the ordinance is going before the council on Tuesday.