Can a Virginia city or county use zoning to require a special use permit for payday loan stores?

Plain-English summary

Delegate Glenn Oder asked whether Virginia's zoning enabling statutes let a city or county put payday lending businesses into the "special exception" or "special permit" category, requiring them to go through a case-by-case approval process rather than locating in any zone where retail or financial services are allowed.

AG Cuccinelli concluded yes. Section 15.2-2280 lets local governing bodies adopt zoning ordinances; § 15.2-2286(A)(3) gives them the prerogative to provide for special exceptions. The opinion treats "special exception" and "special permit" as referring to the same tool. Relying on Board of Supervisors of Fairfax County v. The Southland Corp., the AG explained that the power to grant or deny special exceptions is a legitimate exercise of legislative, rather than administrative, power, and that the decision to place a use in the special-exception category involves the same balancing of private conduct against public welfare, health, and safety as any other legislative decision.

That classification gets the same deference as any other zoning decision. Local governing bodies have "wide discretion in the enactment and amendment of zoning ordinances," and an ordinance is presumed valid and reasonable unless it is shown to be unreasonable or arbitrary. The General Assembly's own treatment of payday lending in the Payday Loan Act (§§ 6.1-444 to 6.1-471) identified payday loan businesses as a separate class from banks, savings and loans, and credit unions, which the AG read as confirming that nothing exempts them from a locality's broad authority to regulate land use through zoning.

Currency note

This opinion was issued in 2010. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: What's the difference between 'permitted use' and 'special exception'?
A: A permitted use is allowed by right within a zoning district. A special exception (or special permit, or special use permit) is allowed only after the governing body or its delegate evaluates the specific application against standards designed to protect adjacent properties and the public.

Q: Could a locality just ban payday lending outright through zoning?
A: The opinion did not address an outright ban. It went only as far as confirming that a locality may classify payday lenders as a special-exception or special-permit use, which is the more modest tool. Anything more restrictive is outside what this opinion decided.

Q: What standards does the locality apply when ruling on a special-exception application?
A: Whatever the ordinance prescribes. Common factors include proximity to schools, churches, or other sensitive uses; traffic and parking impacts; compatibility with the existing neighborhood. The locality has to make a record sufficient to support its decision.

Q: Does this opinion bar a payday lender from challenging an adverse decision?
A: No. Applicants can challenge a denial on the usual zoning-appeal routes, including a showing that the denial was unreasonable or arbitrary. The presumption of validity is rebuttable.

Background and statutory framework

The Virginia zoning enabling statutes are in Title 15.2, Chapter 22. Section 15.2-2280 authorizes the local zoning ordinance. Section 15.2-2286(A)(3) authorizes special exceptions. The Virginia Supreme Court framework comes from Southland Corp. (1982), which characterized the special-exception decision as legislative, and from Turner v. Bd. of Supvrs. (2002), which emphasized the wide discretion local governing bodies have. The more recent Schefer v. City Council of Falls Church (2010) restated the same principles.

The Payday Loan Act in former Title 6.1 (later reorganized) governed the substantive payday-loan business. The General Assembly's choice to treat payday lenders as a separate regulated class from other consumer-finance businesses gave the AG additional comfort that singling them out in a zoning ordinance was within the locality's discretion.

Citations

• Va. Code Ann. § 15.2-2280 (zoning ordinance authority)
• Va. Code Ann. § 15.2-2286(A)(3) (special exceptions)
• Va. Code Ann. §§ 6.1-444 to 6.1-471 (Payday Loan Act)
• Bd. of Supvrs. of Fairfax Cty. v. Southland Corp., 224 Va. 514 (1982) (special exception is legislative)
• Turner v. Bd. of Supvs. of Prince William Cty., 263 Va. 283 (2002) (wide discretion)
• Schefer v. City Council of Falls Church, 279 Va. 588 (2010) (zoning ordinance presumed valid)

Source

• Landing page: https://www.oag.state.va.us/annual-reports-opinions/official-opinions
• Original PDF: https://www.oag.state.va.us/files/Opinions/2010/10-017_Oder.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain, the linked PDF is authoritative.

COMMONWEALTH OF VIRGINIA
Office of the Attorney General
Kenneth T. Cuccinelli, II

900 East Main Street
Richmond, Virginia 23219
804-786-2071

Attorney General

June 23, 2010

The Honorable G. Glenn Oder
Post Office Box 6161
Newport News, Virginia 23606

Dear Delegate Oder:

I am responding to your request for an official advisory opinion in accordance with § 2.2-505 of the Code of Virginia.

Issue Presented

You ask whether a local governing body has the authority, under existing zoning enabling statutes, to classify payday loan businesses as a special exception or special permit use.

Response

It is my opinion that a local governing body has the authority, under existing zoning enabling statutes, to classify payday loan businesses as a special exception or special permit use.

Applicable Law and Discussion

The General Assembly has authorized the governing bodies of Virginia localities to adopt local zoning ordinances. Along with zoning ordinances, local governing bodies have the prerogative to provide for special exceptions. The action of a local governing body in enacting its zoning ordinance is presumed valid, and carries a presumption that the classification contained in the ordinance is reasonable and not arbitrary or capricious. Local governing bodies have "wide discretion in the enactment and amendment of zoning ordinances." Ordinances are upheld so long as they are not unreasonable or arbitrary.

In Board of Supervisors of Fairfax County v. The Southland Corporation, the Virginia Supreme Court held that the power to grant or deny special exceptions or use permits is a legitimate exercise of legislative, rather than administrative, power. The Court further reasoned that, "the decision of the legislative body, when framing its zoning ordinance, to place certain uses in the special exception or conditional use category … involves the same balancing of the consequences of private conduct against the interests of public welfare, health, and safety as any other legislative decision."

You correctly note that the General Assembly has identified payday loan businesses as a separate class from banks, savings and loans, and credit unions when enacting the Payday Loan Act. A "payday loan" is defined by § 6.1-444 of the Payday Loan Act as "a small, short-maturity loan on the security of (i) a check, (ii) any form of assignment of an interest in the account of an individual or individuals at a depository institution, or (iii) any form of assignment of income payable to an individual or individuals, other than loans based on income tax refunds." Given this statutory backdrop, there is no reason to believe that payday loan establishments are exempted from the locality's broad authority to regulate land use through zoning, provided the ordinances are not unreasonable, arbitrary or capricious.

Conclusion

Accordingly, it is my opinion that a local governing body has the authority, under existing zoning enabling statutes, to classify payday loan businesses as a special exception or special permit use.

With kindest regards, I am

Very truly yours,

Kenneth T. Cuccinelli, II
Attorney General