A seven-year battle over a Long Island town’s efforts to use its local zoning powers to ban check cashing establishments has come to an end. In Sunrise Check Cashing and Payroll Services v. Town of Hempstead,1 the New York Court of Appeals has struck down the Town of Hempstead’s zoning measure in a decision that sets forth significant limitations on the ability of municipalities to use their zoning laws to regulate businesses. Indeed, with very limited exceptions, the ruling makes it highly unlikely that local governments will be able to use zoning to bar businesses from operating in their communities where state law otherwise permits these businesses to exist.
The Ordinance
In January 2006, Hempstead adopted Section 302(K) of Article XXXI of its zoning ordinance. Section 302(K) "expressly prohibited" check cashing establishments in "any use district except Y Industrial and LM Light Manufacturing districts." Under an amortization provision in Section 302(K), preexisting check cashing businesses located in districts where they would be prohibited under Section 302(K) were required to terminate by amortization no later than five years after the effective date of the law.2
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