Estimated read time: 1-2 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 Information in the story may be outdated or superseded by additional information.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 (AP) -- The Utah House unanimously approved a bill Wednesday meant to help consumers who get stuck paying huge interest rates on quick loans obtained through payday lending companies.
House Bill 166, sponsored by Rep. Ty McCartney, D-Salt Lake City, also would prohibit lenders from bullying debtors with threats of criminal prosecution, and borrowers would be allowed to repay the loans within 24 hours without penalty.
It also would permit debtors make partial payments. McCartney said some payday lenders refuse partial payments. Lenders then roll over finance charges on the full amount of the loan.
Payday lenders would have to be audited once every three years.
He said the bill would weed out the "bad apples" in the business, he added that the average payday loan store charges more than 500 percent interest on loans.
"They claim to want to help, but they just get them (the customers) deeper and deeper and deeper into debt so they can never get out," said Rep. Loraine Pace, R-Logan.
Rep. Lou Shurtliff, D-Ogden, said she was aware of a case where a man was charged 547 percent interest on a $400 loan and ended up with a $4,000 bill.
"This will clean up the industry and protect the consumer at the same time," McCartney said.
The bill will now be considered by the Senate.
(Copyright 2003 by The Associated Press. All Rights Reserved.)