Utah has some of the highest payday lending rates in the nation. That’s according to a new report released this week from the Pew Charitable Trusts. The research indicates that a state’s limit on interest rates is the key factor driving loan pricing. Utah is one of seven states where there is no legal limit.
A bill imposing new restrictions on payday lenders in Utah passed a crucial vote in the Utah Senate today. HB127 requires payday lenders to disclose the terms of their consumer loans, including the typically high interest rates, before a contract is signed. And the Lenders won’t be allowed to pick the courts where they file lawsuits against borrowers who default either.
Sen. John Valentine, R-Orem, cited the example of a payday lender in St. George.
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.