Unlike some states, Utah has no cap on the size or cost of a payday loan, "has no meaningful limits on repeat borrowing" and does not require the kind of reporting that can help regulators and legislators know how the industry is affecting Utah borrowers, Fox said. "So you have to make policies in the dark," she told legislators.

A dozen states don't allow payday lending at all, she said. Some states put caps on small-loan interest. But even in states where there is a 36 percent cap on interest, the industry has successfully lobbied legislatures to exempt payday lenders from the cap, she said.

According to Fox, the average payday borrower is a 35-year-old woman whose average income is about $2,100 a month. Most loans are "consecutive" rather than one-time emergency loans, she said, characterizing it as "chronic borrowing because the design of the loan makes it hard to pay off." Military families are also often caught in the trap, which recently prompted the Department of Defense to urge putting limits on payday loans as a top priority, she said.

"It's easy to condemn the industry," counters Frank Pignanelli, who represents the Utah Consumer Lending Association. But payday lenders, he argues, provide a valuable service to people whose credit ratings prevent them from getting bank or credit union loans.

The typical interest payment on $100 is only $9, he says, not the $20 Fox contends. "No one pays 521 percent," the amount usually cited as the average in Utah, he says. It's not fair, he adds, to take a two-week rate, even if it's rolled over, and present it as a yearly APR.

"Do they want to put us out of business or regulate us?" asks Pignanelli. "If they want us to go out of business, where is the alternative?"

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E-mail: jarvik@desnews.com