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SALT LAKE CITY (AP) -- Salt Lake City is considering regulations on payday loan businesses.
The City Council is scheduled to vote April 21 on a measure to restrict the check-cashing outlets from moving closer than a half-mile from one another.
Officials hope the regulation would lead to fewer people seeking the quick cash, which can come at a very high cost from the controversial lenders.
"It is time that we send a message," councilman J.T. Martin said.
Salt Lake City has been wrestling with the issue for nearly four years. Many other cities along the Wasatch Front have already imposed regulations on payday lenders.
The city can have some control of how many payday lenders there are and where the shops can be located, but council members say it's up to the Legislature to curb payday lenders' sky-high interest rates.
"We're nibbling at the corners," councilman Van Turner said. "The real problem is the high interest."
Check-store managers defended the industry during a public hearing last week.
Wendy Gibson says the stores fully disclose all loan terms and are highly regulated through unannounced annual audits. "It's going to limit my customers' access to credit," Gibson said of the city's half-mile proposal.
Opponents of payday loan stores have accused the industry of lobbying against a legislative proposal to cap interest, which was killed in committee earlier this year.
Attorney Frank Pignanelli, a former mayoral candidate and a lobbyist for the Utah Consumer Lending Association, said the accusation is too broad. Pignanelli said rules have been tightened since the first legislation that policed payday-loan businesses was passed 10 years ago.
"To say it's been ignored is incorrect," he said. "It's always been very pro-consumer."
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Information from: The Salt Lake Tribune
(Copyright 2009 by The Associated Press. All Rights Reserved.)
