## Facts

- The Town of Hempstead enacted a zoning provision prohibiting check-cashing establishments in all districts except two limited industrial/light manufacturing districts.
- The principal stated rationale in the record was a municipal memorandum criticizing check-cashing businesses on social and economic policy grounds (e.g., effects on low-income residents’ banking behavior and neighborhood conditions).
- Check-cashing businesses operating or seeking to operate in the Town sued for declaratory relief, arguing the ordinance was unlawful, including as an invalid exercise of zoning authority and as preempted by state banking regulation.
- The trial court upheld the ordinance on summary judgment.
- The intermediate appellate court reversed on state-law preemption grounds.
- The Town appealed to the state’s highest court.

## Issues

1. Whether a zoning ordinance that broadly excludes check-cashing establishments from business and commercial districts is a valid land-use regulation or an impermissible effort to control the identity of a lawful business user.
2. Whether state banking law and regulations governing check-cashers preempt the local ordinance (raised and decided below but not reached by the court of last resort).

## Decision

- The court invalidated the ordinance as beyond the municipality’s zoning power.
- It held the measure targeted a particular lawful business based on social-policy objections rather than regulating land use impacts.
- The court affirmed the judgment for the plaintiffs but did so on zoning-power grounds, expressly declining to decide preemption.

## Legal Principles

- Zoning authority is directed to regulating the use of land; it generally may not be used to exclude lawful businesses based on disapproval of the business model, clientele, or perceived social worth of the user.
- A categorical exclusion of a named type of establishment must be supported by land-use justifications (e.g., physical or operational impacts) rather than generalized social or economic policy aims.
- Courts may invalidate a local ordinance as an ultra vires exercise of zoning power without reaching separate arguments such as state-law preemption when the zoning defect is dispositive.

## Conclusion

The court held that Hempstead’s near-total ban on check-cashing establishments was not a legitimate zoning regulation because it sought to eliminate a disfavored but lawful business for social-policy reasons rather than addressing land-use concerns, and it therefore struck down the ordinance without deciding whether state banking law also preempted it.


Sunrise Check Cashing & Payroll Servs., Inc. v. Town of Hempstead, 20 N.Y.3d 481, 986 N.E.2d 898 (N.Y. 2013)