Utah Senate Bill 16, pending Governor Jon Huntsman Jr's signature, would bar payday loan companies from using the state's bad-check law to collect on payday debts. The bill would also allow the state to levy fines up to $500 for any payday lenders who do not register with the state.
Utah House Bill 329, still awaiting committee assignment, would require payday lenders to provide more disclosure about actual fees and penalties to consumers who apply for loans. The bill would also bar payday loan companies from providing additional loans to consumers who are still paying off a prior loan.
While both these bills establish regulations that would ultimately protect consumers, one important issue is not addressed. The state does not have an usury law in place to prevent lenders from charging consumers unreasonable interest rates. Utah payday loan companies sometimes charge more than 500 percent interest on payday loans and will continue to do so unless legislators pass additional laws to limit the rates.
This entry was posted on Thursday, February 1st, 2007 at 2:43 pm and is filed under Bankruptcy and Predatory Lending. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.
500% interest rate, that’s nothing compared to what I was nailed with by my local bank. I was in a squeeze and had a check bounce. You figure out the interest and I was nailed roughly 2,000% for that mistake. I used a payday loan and payed a mere 30 bucks to borrow money for 14 days. To me it was a lifesaver and I hope there’s never a bill passed against them.