The ban, which prevents any new check-cashing and payday loan businesses from setting up shop in the city, has been established for 45 days, but was approved for an additional 10 months, 15 days. City staff asked for the extension to better investigate the need for restrictions on the establishments.

"This council should reserve the right to at any time legally neutralize any business," Councilman Gregory Salcido said at a Feb. 12 meeting.

Eight check-cashing establishments exist within the city limits, while there are just six traditional bank branches.

The businesses give short-term loans, to be repaid by customers when they receive their paychecks.

They also cash checks for a fee, usually based on percentage. The cost is between 10 percent and 25 percent of the amount borrowed.

Mayor Ron Beilke said he expected the extension to pass, because of the council's view of what the businesses do in the community.

"It was basically a given," Beilke said. "They're really abusive banking practices."

Beilke said he and other city officials would rather see residents use traditional banks.

Raul Murga, director of the Pico Rivera Community for Truth in Politics, spoke against the ban at the meeting.

"I do feel that this is too much intervention from government," Murga said.

First Amendment attorney Roger Jon Diamond said Tuesday he believes there is little that can be done about the temporary ban, but any permanent move in the city to ban check-cashing businesses could be successfully challenged in court.

Diamond said a permanent ordinance against any one type of business contradicts laws already on the books.

Source: http://www.whittierdailynews.com/news/ci_8309232