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SALT LAKE CITY — A new report shows Utahns are paying an average 466-percent interest rate on payday loans and one lawmaker plans to continue the fight to tighten regulation laws for the lenders.
Utah has among the nation’s highest interest rates for payday loans, according to U.S. Finance Post. A study, released by the Pew Charitable Trusts, found Utah, Nevada and Idaho have high rates mainly because they are among only seven states that impose no legal limits on payday loans, the U.S. Finance Post said.
The 34th annual Report of the Commissioner of Financial Institutions found that Utahns paid over $1.2 million in deferred deposit loans from July 1, 2013 to June 30.
Republican Representative Brad Daw, of Utah County, has been pushing to have legislation put more restrictions on payday lenders. However, Daw lost the 2012 race after anonymous mailers attacking him were circulated that were connected to a campaign consultant to former Attorney General John Swallow, who is now under investigation by the Salt Lake and Davis county attorneys and the FBI, according to a previous KSL.com article.
A House investigative committee uncovered emails from Swallow's computer that dealt with how that consultant used hidden campaign money on attack ads against Daw. In June, Daw said he knew the attack ads “came from the payday lenders.”
Daw was re-elected to office on Nov. 4 and has talked about trying again to have legislation put restrictions on payday loans in Utah. He said he has researched the legislation for a dozen states where payday lenders are required to do credit checks before approving a loan.
Daw said Arizona voters recently banned payday loans in their state and although he doesn’t necessarily think Utah should ban payday loans, he does want tighter laws to regulate the lenders.
“If they are going to be here, we are going to control them and the legislation that we’ve looked at from a dozen other states is effective at controlling a lot of the abuse,” Daw said on the KSL Radio Doug Wright Show Tuesday.
However, Daw said passing any reform to the legislation regarding payday loans in Utah “will not be an easy trip.”
“I can tell you right now without naming names, that they have already spent a lot of money gearing up to try and fight any genuine reform that is going to happen or that I am going to attempt to do this next session,” Daw said on the Doug Wright Show. “They are very interested in protecting their business practices.”
