Legislators Attempt to Clamp Down on Payday Lenders
Rep. Jim Dunnigan, R-Taylorsville, is one of a few legislators introducing bills that would give consumers more protection when dealing with payday lending companies.
HB127 would require deferred deposit lenders, also known as payday lenders, to start reporting detailed information about the loans they give out and how long it takes people to repay them. Rep. Dunnigan says this will help get to the bottom of the claim that payday lenders help create a cycle of debt for people with low income.
“We still struggle, a little bit, to evaluate that, because there are not very many complaints filed with our state regulator every year, for whatever reason,” he says.
In addition, the bill would require payday lenders to give a person who defaults on a loan 10 days notice before bringing any civil action. It also allows a consumer to have more flexibility paying back a loan if they aren’t able to do so within 10 weeks. Finally, the legislation would prohibit payday lenders from making consumers waive their right of venue, which means payday lenders will only be allowed to take someone to court in the county the loan was taken out.
Utah County is home to several large payday lending companies, some of them linked to the scandal that led to the resignation of former Attorney General John Swallow. Investigators found that Swallow was receiving large donations from these lenders to help them obscure money used to defeat legislators that ran bills against their industry. As chair of the House committee that investigated Swallow, Dunnigan says he’s well aware of that history, but that he isn’t too concerned.
“You know, I’m trying to look at good practices," he says. "And looking at the industry and what they say are good practices and they have kind of a national standard. And I’m saying if those are good national standards then lets implement some of them in Utah.”
Rep. Larry Wiley, D-West Valley, is running two of his own bills that deal with similar issues. The two lawmakers are meeting to see if could consolidate the bills into one.