From Deseret News archives:
Trapped for cash: Deeper in debt
Payday lenders put many borrowers in a vicious cycle
Bailey could not afford to pay off those "payday loans." So, with cash from her paycheck, she visited lenders to buy more time. For example, she would pay, according to her records, $26 to Cash America to extend a $200 loan for another two weeks for an interest rate that comes to 469 percent annually.
After buying time with such lenders, Bailey would find she had little left to live on, so she would sometimes take out yet another payday loan. "At one point, I had seven to nine payday loans at the same time," Bailey said.
It all led her to bankruptcy after months of harassment from collectors, a mountain of bounced-check fees, small-claims lawsuits, wage garnishment, stress-induced sickness and loss of her job.
Bailey is not alone.
Few states have laws that are friendlier to the payday loan industry than Utah. It is among 39 states that explicitly allow such loans. It is among 10 that have no cap on interest rates or fees. It is among two with no legal maximum amounts for such loans. Utah also has among the longest time allowed to "roll over" loans with continuing high interest: 12 weeks. Most states ban rollovers.
Amid such friendly laws, Utah has seen meteoric growth of payday lenders. The first store appeared here in 1984. In 1994, the Salt Lake area still had only 14, according to old Yellow Pages. Now, the state has 381 payday loan stores or licensed online lenders.
Comments
- Obama to suggest Afghan endgame 12:28 p.m.
- New 3rd District judge appointed 12:12 p.m.
- Richmond woman dies after crash 12:10 p.m.
- Prep swim rankings 12:05 p.m.
- Woods' wife asked neighbors to call 12:03 p.m.
- Stocks climb after econ reports 11:57 a.m.
- Missionaries talk to Michigan paper 11:49 a.m.
- Witness: Mitchell wanted attention 11:45 a.m.
- NBC sale to Comcast cleared 11:14 a.m.
- Palin book goes platinum 11:12 a.m.
- 2 citations issued at Y.-U. game
- Hall reprimanded by MWC
- Utes won't respond to Hall
- Mitchell called intelligent, controlling
- Hall's pain reflects self-betrayal
- Daughter: Mitchell fed me my pet
- BYU says Hall incident resolved
- Max Hall: a fixture in rivalry lore
- 'Grandfamilies' a growing trend
- Cougs begin bowl preparations
- Hall mouths off about hate of Utah
900 - Cougars beat Utes in overtime
481 - Hall reprimanded by MWC
395 - Max Hall issues apology
385 - Hall's pain reflects self-betrayal
331 - Utes won't respond to Hall
269 - BYU says Hall incident resolved
154 - BYU is champion of the state
140 - Man trapped in Nutty Putty cave dies
124 - Cave to be sealed with body inside
120
My husband was teaching his 6th-grade class in Salt Lake last year when...
I wanted to tell them not to go. I dropped subtle hints. "My money is on...
Says you Mike Richards. You are welcome to you beliefs, but Government is...
A spike in sales doesn't necessarily imply growth.
Damian Lillard was the best player on the court. Weber wins that game at the...
Maybe the President knows what many of us don't, but it's hard to see this...
Really?? | 8:50 a.m. Dec. 1, 2009 We will lose more respect???...
In a way he died so that no one will enjoy or die in the cave anymore. IMO, I...
After Chaffetz is done here he will be going back to TMZ to talk about Miss...
One of the most inspiring lectures I ever heard about the Sermon on the Mount...
Chaffetz is soft on terrorism, soft on national security. Where do you...
Well said.



You can be the first to comment on this story.