KILMARNOCK -- The Kilmarnock Town Council rejected a request last night to allow a payday-lending company to open an office.

The council voted 4-2 against the proposal after a short public hearing in which only one person -- the manager of a nearby payday-lending office -- spoke in favor of the idea.

Nearly a dozen people, including ministers, business owners and social advocates, who spoke at the hearing criticized the request to allow cash-advance businesses in commercial zones. They said the businesses prey on unsophisticated borrowers who are subject to becoming trapped in debt.

Dana Wiggins of the Virginia Poverty Law Center said her group has been approached by borrowers who are unable to pay back the high-interest, short-term loans that payday lenders offer.

"Their finances are like a bucket, and payday lenders are a hole in the bucket," Wiggins said.

Other speakers said the lenders siphon off money in fees that otherwise would be spent locally.

"The ultimate freedom is a healthy community," said the Rev. Megan L. Hollaway, assistant rector at Grace Episcopal Church in town. "That is the freedom we're asking you to protect."

The developer of the Wal-Mart shopping center asked the council to permit payday lenders in commercial zones to accommodate an Advance America office. The proliferation of short-term lenders prompted the General Assembly recently to pass legislation capping the fees and interest rates that payday lenders can charge.

Randy Phelps, a district manager for Advance America stores, including one in nearby Warsaw, said the company wanted to open an office in Kilmarnock to meet local demand. "We've been invited by our customers who want us here," he said.

"I'm adamantly against it," Councilman Frank Tomlinson said before the vote. He alluded to a character from Shakespeare's "The Merchant of Venice" who demanded a pound of flesh from those to whom he extended loans. "It's like Shylock," he said.
Contact Lawrence Latané III at (804) 333-3461 or llatane@timesdispatch.com.