There are sound reasons why Congress imposed a 36 percent interest cap on payday lenders who make loans to service members and their families. Those people were vulnerable to exploitation by unscrupulous lenders, some of whom charge 900 percent interest on loans.

Industry representatives say the free market should prevail because payday lenders are lenders of last resort. Their clients cannot obtain credit elsewhere because of poor or nonexistent credit histories. If these lenders assume the risk of loaning to such people, they should be able to charge sizable interest rates, they contend.

These lenders should be able to make a reasonable profit. But does that mean they should have free rein to exploit desperate and vulnerable people? There is a lot of middle ground between the federally imposed 36 percent interest rate for military borrowers and the median 521 percent interest rates charged by payday lenders in Utah.

Yet, there appears to be little appetite on the part of state and local government to further regulate these businesses. In October, the Salt Lake County Council enacted a six-month ban on new check-cashing businesses in the unincorporated county. The ban was passed in the hopes that the Legislature would take up the matter statewide. Meanwhile, a move to limit these businesses in Salt Lake City sputtered when the key backer was defeated in the fall elections.

It is even more doubtful that the Utah Legislature will take on this issue given the philosophy of Utah Attorney General Mark Shurtleff, who argued in a recent public debate that banning payday loans would hurt the poor, forcing more of them into bankruptcies or repossessions. Shurtleff, participating in the annual Jefferson B. Fordham Debate at the University of Utah's S. J. Quinney College of Law, noted that state regulators receive few complaints from the clients of payday lenders.

Again, it is one thing to provide a service and quite another to exploit people who use your service because, for them, it's the only game in town. To rationalize that a dearth of complaints about this industry somehow justifies interest rates that can run up to 900 percent in Utah is troubling. Are people who are so down on their luck that they need to patronize payday lenders going to bother to file formal complaints with state agencies?

Financial institutions in other states are effectively squeezing out the competition by playing the payday lending game. One credit union in Kansas is matching the federally imposed 36 percent interest rate. Loans are limited to $500 and no further loans are available until the previous loan is retired. People who do not repay the loan in three months are required to attend credit counseling each time they apply.

This is not only competition, it serves an important consumer education function. Perhaps Utah lending institutions could follow suit.