From Deseret News archives:
Hill wants limits on payday loans
Payday loan stores in Utah charge an average 521 percent annual interest, about $20 per $100 borrowed on a two-week loan. Critics contend that the poor are lured into loans they cannot repay on time and then spiral into deeper debt as they take out more payday loans to pay off earlier loans.
Shurtleff has said, however, that such loans are often a better deal for the poor than such alternatives as bouncing checks or paying late fees on utilities or other bills. Amid his defense of that industry, payday lenders have donated nearly $60,000 to his campaign.
Hill called Thursday to limit the interest that payday lenders can charge to just 36 percent annual interest. She also proposed limiting the period that borrowers can "roll over" or extend loans from the current 12 weeks to just four weeks.
"A 36 percent rate is still quite high, but it would restore a modicum of fairness to the system and probably encourage the most unscrupulous lenders to leave the market," Hill said.
Hill said shortening the time for "rollovers" is needed because "the payday lenders' business model is based on the expectation that the borrowers will need to roll over their loans when the first two-week loan expires. That triggers more hidden fees and more interest, trapping borrowers in a downward spiral of debt," she said.
Hill said she also opposes provisions in most current payday lending agreements that allows payday lenders to sue customers in courts nearest the headquarters of the lenders which may be far from where borrowers live.
"It is completely unfair for a payday lender to bring a lawsuit in Provo against a borrower who lives in St. George," Hill said. "By definition, payday lending customers live paycheck to paycheck. They can't afford to travel across the state to appear in court, and that means they're likely to be saddled with a potentially catastrophic default judgment, regardless of the merits."
A Deseret News study earlier this year showed that payday lenders filed 58 percent of all lawsuits in small-claims courts along the Wasatch Front last year. In Provo (headquarters of Check City), they filed 81 percent of all small claims cases.
"I think continuing to do nothing is immoral," Hill said. "The attorney general should be protecting consumer from loan shark tactics, and that's what I would do if elected on Tuesday."
E-mail: lee@desnews.com
Recent comments
APR or Annual Percentage Rate is an amount a lender can collect if a...
Annual Percentage Rate | Nov. 7, 2008 at 4:05 p.m.
Hill is wrong on various counts regarding the payday loan industry....
Payday Lending Rep | Nov. 5, 2008 at 1:46 p.m.
I believe now is not the time to limit a consumer's right to borrow...
Over the Hill | Nov. 1, 2008 at 7:14 a.m.
- Move over, Monopoly 4:16 p.m.
- Trains in gardens a hit 4:16 p.m.
- Trailers spoil the movie plots 4:16 p.m.
- Parents should listen to Lambert 4:15 p.m.
- Toys leave little to imagination 4:15 p.m.
- Holiday cards elicit complaints 4:15 p.m.
- New garage functions like a garage 4:15 p.m.
- Family grows poinsettias 4:15 p.m.
- Garden tips and events 4:15 p.m.
- Family-friendly activities calendar 4:14 p.m.
- Hall mouths off about hate of Utah
- BYU is champion of the state
- Cougars beat Utes in overtime
- Credit Coug defense for win
- Field goals, penalties doomed Utes
- Cougar defense rose to occasion
- Marriage definitions vary widely
- Jones' joy for life remembered
- Banged up Jazz get best of Blazers
- Cave to be sealed with body inside
- Hall mouths off about hate of Utah
692 - Cougars beat Utes in overtime
465 - Thunder rolls by Jazz
136 - BYU is champion of the state
126 - Man trapped in Nutty Putty cave dies
117 - Cave to be sealed with body inside
115 - Editorial: Poor welcome for Palin
113 - Rivalry Week is highly profane
90 - Hall's legacy measured today
77 - Y. focused on 10-win season
74
I wanted to tell them not to go. I dropped subtle hints. "My money is on...
When I was a kid, I worshipped my grandpa. He was undoubtedly my hero....
Don't hold back. Tell us what you really think. It is amazing what built...
WHERE DID THE MIGHTY utes GO? OH, I SEE THEM THEY ARE MENTIONED IN THE...
Of course many of the businesses want taxes raised because their business...
Beer??? Utah has a zero-tolerance policy towards alcohol on campus, dorms ans...
Since the American population is mostly Catholic, is it ok for them to...
As an Alta skier since 1948 I must say it is the best snow on earth. I live...
How Much money would BYU save if they axed the sports program? Is even an...
Max Hall just defined his legacy which is sad for the young man. As much as...
Unfortunately, there are times where you must be a little more PC than usual....
Winning 2 of the last 3 gives us some momentum going into the offseason. As...


