Estimated read time: 2-3 minutes
This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.
SALT LAKE CITY -- The Salt Lake City Council took on payday lenders Tuesday night and passed an ordinance that prevents the businesses from opening a new store within a half mile of an existing one.
This ordinance has been in the works for more than three years, and there's only so much a city can do when it comes to regulating payday lenders. Some say this ordinance is a start.
"There are important steps that need to be taken to continue to address predatory practices," said City Councilman Soren Simonsen.
City Councilman Eric Jorgensen said, "The elephant in the room is that one group of our advocates is here simply because this is a problem for the poor and the very poor. They're not here to discuss land-use issues."
There were no payday lenders in attendance at Tuesday night's meeting, but earlier the day we caught up with one who says businesses like hers are being picked on unfairly.
"I just don't think it's fair, only because banks and credit unions aren't part of this ordinance," said Check City manager Rachel Lopez.
However, the differences between payday lenders and banks and credit unions are vast when it comes to regulation and interest rate caps. Payday lenders are infamous for APRs topping 400 to 500 percent. For that reason, critics call them predatory.
"This is simply decreasing access to the most predatory type of loan," said Linda Hilton, with the Coalition of Religious Communities.
But Lopez counters, "We don't go out there and ask people to get loans, they come to us when there's an emergency, when they need a short-term loan."
The ordinance has its roots in protecting consumers from themselves. Other such efforts have failed, specifically at the Legislature, where attempts to cap interest rates at payday lenders repeatedly fail.
At least nine other cities in Salt Lake County -- including Sandy, West Valley and Midvale -- along with unincorporated suburbs, have implemented similar restrictions.
------
Story compiled with contributions from Whit Johnson, Richard Piatt and Shara Park.
