State regulators are willing to discuss with legislators the activities of payday lenders but are not planning to push any specific bills.

Instead, a legislative committee was told Wednesday, the Utah Department of Financial Institutions wants to see if a pair of bills passed during the last general session will be effective.

Paul Allred, deputy commissioner of the department, told the Business and Labor Interim Committee — meeting to decide what issues to study this year — that SB144 and SB16 featured provisions about payday and title lending institutions. Specifically, SB16 allows fining payday lenders for various disclosure and licensing violations.

Allred also noted that a federal law passed in 2006 limits to 36 percent the interest rate payday lenders can charge military personnel and their family members.

"We don't disagree that some of the issues needed to be discussed that were brought up in other bills during the session and that we support the Legislature studying that on an interim basis. ... The things that we were able to accomplish in SB16 we feel will give us the ability, and we like the opportunity to see if those additional tools help us in enforcing it," Allred said. "But we don't have any priorities beyond what we had in SB16."

A Deseret Morning News series last year showed the median rate charged by Utah payday lenders is 521 percent annual interest. A Morning News series in 2005 found that Utah has more payday loan stores than 7-Elevens, McDonald's, Burger Kings and Subway stores combined. Most are concentrated in areas that are poorer, heavily Hispanic or near military bases.

Still, Allred reiterated that his department receives few complaints about payday lenders, usually only 10 to 20 written complaints per year.

"The sense that we get is that those who use the payday lending understand the product. They know what they're getting. They understand that they're paying a high rate of interest," he said. "But it's an alternative that they are choosing to take. And we hope that with passage of the bill this session, that we gained some tools that will give us the opportunity to make sure that those infractions that we see, that we can take care of in a more precise manner."

Francine Giani, executive director of the Utah Department of Commerce, said her department, which does not have regulatory authority over payday lenders, receives 20 to 30 complaints about those lenders annually. Most are about high interest rates, she said.

"Thirty-six percent for our military boys is great, but I can tell you that we have consumers that are paying 400 and 500 percent interest rates," Giani said. "And we ask (and), well, they understand because they're desperate and they go in and go ahead and sign all the papers and say that they'll do all that they're expected to do. They are are behind the eight ball by and large because they cannot get themselves out of debt."

Allred noted that borrowers who pay back loans quickly face fewer problems. As an example, he said a lender gets 69 cents for a $100 loan for one week at 36 percent interest. That same $100 loan would have interest of 520 percent if there is a charge of $10 that is annualized over a year.

"But if the borrower pays off the loan in a week, they've paid $10," he said. "So you need to look at that careful analysis and understand what's occurring."

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E-mail: bwallace@desnews.com