Of all the industries in which to restrict new business, I would imagine that payday loans are one of the last businesses one would want to see restricted. Perhaps more competition the better, allowing a free market to place payday loan companies into a fierce competition to provide the consumer with the best lowest interest rates. By restricting the number of the payday loan companies, it allows the fewer to maintain higher rates. Let payday loan companies battle it out across the street from each other having to outbid each other with lower and lower interest rate signs that the public can easily compare.

That's why Government has no business getting involved in business.

First, as "Tab" accurately pointed out, restricting the number of companies does exactly the opposite. More competition would lower the rates.

Second, people need money for a reason. A dozen bounced check charges may be 5 times the cost of a payday loan. Maybe some are blind to the rate, but most know it is costly, but less than the alternative.

These people aren't even putting up collateral. If so, they could go to a pawn shop at 120%. Rates there would be higher if there were fewer choices. Each new pawn shop doesn't cause more people to need money, it lowers the rates for those that do.

Payday lenders do not cause poor spending habits, they just fill a need people have caused for themselves. And, they fill it cheaper than the alternatives of bounced checks, late fees, poor credit, etc.

Tab is so right. Like any new product, as competition grows, the consumer is always the benefactor. Let the payday loan businesses reach saturation. Then to for a business to be successful they will have to set themselves apart from the others by offering better service than the competition, perhaps in the form of lower rates. Then the competition has to respond, and before too long the payday loan business will regulate itself.

It is worth the risk to wait it out and see if such a scenario will play out, rather than allowing the governement to regulate it for us, for they will truely make a mess of it as they do on everything else they try to regulate.

Well since there has been unregulated free enterprise of the payday loan industry especially in Utah were a state legislator is one of the powerful owners of a payday loan store, shouldn't the free market have already taken place?

Thank you Salt Lake County. These payday loan outfits are reducing my profits on bank overdraft fees.

You can still come to me for a loan.

jmdspk:

Payday loan businesses are still somewhat in their infancy in many parts of the country. I know when I left Utah twelve years ago, I had never even heard of payday loan stores. It took the PC industry about that long before competition started driving down prices.

In many of the comments made about payday loan stores, I note that there tends to be a feeling that Utah has more than their share of payday loan stores. But during a week visit last month I really didn't notice any more than what there are in most places I have visited. These businesses are all through the midwest and southeast. In our town of 20,000 people there are seven of payday loan stores.

this policy is the opposite of what should be done; if you limit competition and put a cap on the supply of these payday loans, you will never see the market even out