Deseret News | Reader comments: Is Salt Lake dragging feet on payday lenders?

Reader comments
Is Salt Lake dragging feet on payday lenders?

liberal larry | 6:26 a.m. April 22, 2008

It's time to limit the number of "pay day lenders" to zero. Other states have had the gumption to ban these bottom feeders, and it is time for Utah to do the same. I can't understand why a state that has the good sense to limit predatory practices, like gambling, would not see fit to prohibit these loan sharks!

Easy explanation | 6:49 a.m. April 22, 2008

The fact that Rocky Anderson destroyed the Planning Department and the Becker administration bombed the ruins might have something to do with it.

Anonymous | 7:21 a.m. April 22, 2008

i think that Payday lenders are just like Gambleing. almost they get loans when they don't have the $$$$$$$$ then they have to pay it all back after they recive their Paychecks, to me that really is almost like gambleing, I thinkthat ehy should get rid of all the chains & stores that they have in UT County.

Comments continue below

tcip | 7:49 a.m. April 22, 2008

We not only can't see the forest for the trees, we can't see the tree for the leaves. This is not a "build it and they will come" situation. "They" are already out there--payday lenders fill the need and aparently the need is great or payday lenders would not be thriving. I hate payday lenders, but cutting them off only forces people to seek out Guido in a back alley somewhere. So, if we can't see what's happening that's better? Talk about putting our collective head in the sand! What is the real problem here? Payday lenders are a symptom not the problem. If we figure out the problem and SOLVE IT the payday lenders will go away without government intervention. When there's a problem why do we always cry for government to solve it?

Against Payday Loans | 7:57 a.m. April 22, 2008

I used to live in Georgia where payday lenders are illegal and it was so refreshing not to see the tacky buildings everywhere.

Loan Sharks | 7:57 a.m. April 22, 2008

The Utah Legislature should have reined in these loan sharks a long time ago by capping the amount of interest and fees they can charge.

Need for Payday Lenders | 8:01 a.m. April 22, 2008

People constantly ignore the evidence that there is a demand for payday lenders. If you need quick cash because you have written several checks that will bounce, or you can't pay a bill that has a steep penalty (such as a reconnect fee or other deposit), then payday lenders offer an alternative.

Just bounce a couple of checks at your local bank and see if their overdraft charges don't look pretty daunting. Their fees are much higher than the interest charged by payday lenders. Of course, since banks call their charges "fees," there is no "interest rate" associated with them. You would be amazed at the amount of profit provided to banks as a result of these fees.

So, while we are busy attempting to rid ourselves of the scourge of payday lenders, in fact these bottom feeders have a lot more company than we are lead to believe. We can eliminate payday lenders by eliminating the need for them.

Think harder | 8:20 a.m. April 22, 2008

If you limit the number of payday lenders, this will give the remaining ones a monopoly over the market, including the ability to charge whatever rates they can get away with because they have no competition. Simple economics. Is this a land use issue or a social issue that should be regulated by the federal government and/or banking industries?

Wake up | 8:37 a.m. April 22, 2008

Ordinances do not fly through. After an audit that criticized those who try to force issues through the planning process, cutting corners and the public out of the process, it's hard to believe that this is being pushed without respect to the process that needs to be followed. If you want to cut down on predatory lending, great, but be patient enough to go through the legal channels, and do it right.

Becker bombed | 8:55 a.m. April 22, 2008

Got to agree with whoever made the comment about Becker bombing the ruins of the planning department. People quitting, empty positions everywhere, and then his administration is trying to push this through and cut corners so they can look like they've actually accomplished something.

Ace Ventura | 8:55 a.m. April 22, 2008

Sounds like we have a couple of payday lenders (or one posing under different names) weighing in. Let's not dispute the need for payday lenders--just enforce the existing usury laws and limit the amount of interest they charge. Payday lenders do, in fact, provide a needed service. But when you have desperate people and greedy lenders it's a combination made for exploitation. That's why usury laws have such a solid and revered history.

So, keep the lenders, but limit their interest rates to something the payday lenders won't have to lie to their mothers about over Sunday dinner.

Dear "Need for Payday" | 8:59 a.m. April 22, 2008

There IS no "emergency" that justifies the use of a high-rate payday lender. Borrowing MORE money (at an incestuous interest rate) solves no problem. In fact, in most cases, a disconnect fee would be CHEAPER than the eventual impact of the payday loan.

As for bank fees: bank elsewhere!

Payday lenders, such as Republican SLC County Party Chairman James Evans, have political power in Utah. It's another way of insuring that the underclass stays "under", that a core group of uneducated workers/citizens remains that way, and that business has those workers/citizens available as low-cost employees.

There used to be usury laws, you know. Until the Republicans got rid of them.

Payday vs. Guido | 9:16 a.m. April 22, 2008

Is there a real difference? Payday/quick loan/car title lenders don't break legs, I guess... at least physically. These things are unethical, and should be at least regulated, and preferably abolished!

huh? | 9:12 a.m. April 22, 2008

Why complain about the behaviour of local government when it was the State Legislature that created the mess? Complain to the source of the problem.

Shurtleff Protector | 9:23 a.m. April 22, 2008

The general public just does not understand that this is just a ma and pa outfit. That is doing a public service according to our Atty General. He will mess with social issues but legal he has no idea. Just look at his CPS lawyers.

Help People, Don't Limit Options | 9:38 a.m. April 22, 2008

Limiting access to payday loan businesses does not help people. All it does is limit their financial options.

Usury Law | 10:09 a.m. April 22, 2008

To limit the number of payday lenders only enriches the ones that are allowed. Prior to the 1970 Carter high inflation era we had usury laws to protect people. Back then the loan sharks weren't legitimate and could be prosecuted. Usury rates were usually considered to be rates above 21%. Now days even credit cards can charge much more than that. I say put usury laws back into effect, which would help reduce much of the unsecured debt. Of course until people learn a little bit about individual money management there would be significant pain. Much of the high percentage goes to pay for those that never pay what they owe(including credit card debt). There isn't even much even payday lenders can do to recover unsecured loans except refuse to give more. The mob loan sharks could break your fingers, or worse. A gradual reduction of interest rates would reduce the number of payday loans, by reducing their obscene profit margin.

To: Need for Payday Lenders | 10:41 a.m. April 22, 2008

You talk about the huge fees that come with banks and say that they are more than the interest charged at these places. I don't think that a fee is likely to top 500% interest rates. Plus, if you're smart, you'll go to a credit union. They are not for profit (they make a small profit to pay their employees but they are not in the business to make money. Their board of directors and presidents ususally are unpaid). Credit unions have way better interest rates and almost no fees.

Reno | 10:42 a.m. April 22, 2008

It seems obvious to me that there should be a cap on a REASONABLE interest rate that the loan centers can charge. The loan center still makes a profit, and the borrower won't have to hand over their firstborn and the shirt off their back to get a small loan when times are lean.

Anon | 11:50 a.m. April 22, 2008

Have you ever been to a payday lender? They are nice people that don't "prey" on their customers. I have used them in the past (when an emergency arises) and had a positive experience. I use them when I need a little and make sure it is an amount I can pay back with my next paycheck. The fee is reasonable. I do agree we don't need one on every block, but I'm sure glad they are there when I need them.

wake up SLC!! | 12:05 p.m. April 22, 2008

Whoever keeps replying to "need for payday lenders" needs to get out their calculator. comments like "I don't think that a fee is likely to top 500% interest rates." only shows your ignorance to how APR, not the interest rate, is calculated. Did you know that you can have an 17% interest rate and a 443% APR? That is typical of a payday advance. Or that a NSF fee on a $100 bounced check from a bank (average around $26) is 678% APR? Did you know the reconnect fee for an average utility is $46 which makes the APR over 1200% APR. Of course you don't because you don't understand what you are talking about. Interest rate and apr ARE NOT THE SAME THING!!! STOP with the "i don't understand, so it must be bad" mentality. If you don't like it, don't use it. Taking someone else's financial choice away because you don't agree with it is economic discrimination at best and borderline anti-American at worst. Get a clue.

Cap Usury | 12:07 p.m. April 22, 2008

One solution is to cap usury. Many states now do this. Even though it is still high, the magic number seems to be 24.99% APR (fees included). If they can't turn a profit at that level, they really don't need to be in business.

Informed | 12:18 p.m. April 22, 2008

For those of you who want to be informed, interest is capped on payday loans in Utah. It's capped at 12 weeks, thanks to the legislature. After 12 weeks the interest rate goes to ZERO. Get an education. Don't comment unless you know what you are talking about. This APR thing that gets everyone excited is a federal requirement, but it makes no sense in Utah, because no one could legally have an annualized payday loan in Utah!! Also there is a one day cool down after a 12 week loan, to help stop the cycle of debt. Also, someone commented on how wonderful credit unions are. Forbes Magazine just did a study where they found that 60% of revenues for some credit unions come from (drum roll please) BOUNCED CHECK FEES. It's a huge $20 billion industry (compared to $4b for payday). According to Forbes, the leader of the fight to ban payday in North Carolina was (drum roll) The Self Help Credit Union, whose bounced check fee revenues DOUBLED when payday went out of business there. Thanks to our legislature for capping interest at 12 weeks. Competition, not government guesswork will drive prices to their lowest profitable level

MaryT | 12:32 p.m. April 22, 2008

To Loan Shark:

The legislature will not act on this issue. Some of them are the source of this issue--Remember Mr.Buttars? He owns a bunch of those stores! There are others. Check it out.

Wednesday's Child | 12:32 p.m. April 22, 2008

Salt Lake to the rescue! What a joke! I love the elitists on the comment board waging their finger at Salt Lake City for not taking action against payday lenders. As a person who has used payday loans on a couple of occassions I can attest to the fact that they have SAVED ME MONEY! Yeah, sorry you contolling know-it-alls, I don't need you help. This Hilton lady needs to go back and continue feeding dog food to the poor she claims to care about and leave reasonable people like me alone and allow me the right to get a $500 loan when I need one.

25% APR are you kidding | 12:43 p.m. April 22, 2008

If they cap it at a 25% apr that would work out to be $.48 per week per $100 dollars. That wouldn't even cover the cost to print out the paper work let alone cover the cost of the employees and all of the other overhead. I would like to know if you can find anyone willing to loan a $100 for one week for $.48. Why is there such a huge attack on the payday loan industry. What about banks, and all their hidden fees and charges. Atleast payday lenders are honest and up front telling you how much you are going to end up paying. On average according to the FDIC 60% of a banks profit comes from customer fees like bank fees, atm fees, late fees. What about putting a cap on banks and the amount of fees they can make? (which by the way average out to be tow or three times the apr of any payday loan place.) The problem is people try and get involved in things they know nothing about. Search it out before you try and complain.

Free to Choose | 12:53 p.m. April 22, 2008

Payday lenders are not a problem. The only problem may be individuals who are unwise with their money. Anyone who has ever used a credit card to make a purchase is doing the same type of thing as getting a payday loan: you need money that you don't actually have at the moment. Are we trying to get rid of credit cards?? It seems ridiculous that we don't let individuals choose how they want to handle their finances. If someone needs a loan after the banks are closed for an emergency, these institutions are there to assist them. This country is about freedom. Stop taking the rights of individuals and how they choose to handle their own finances!!!

Do the math | 1:04 p.m. April 22, 2008

It's pretty simple, payday loans are cheaper than bouncing checks. If I have 5 checks out that I know will bounce, I would much rather go borrow $200 and pay a $16 fee than be stuck with all the bounced fees. Let's see 5(checks)X$30(bank bounced check fee)=$150. Plus a $20 fee from each company that I wrote the check to. 5X$20=$100. So I paid $16 and saved $234 in bounced check fees.

Dane | 1:04 p.m. April 22, 2008

The fact that West Vally City was the first city to pass an ordinance regarding these lenders is a joke. The state should ban them altogether. People need to learn how to manage their money better and not stretch their income so far that they are a week away from bankruptcy.

Zach Morris | 1:13 p.m. April 22, 2008

Linda Hilton describes payday lending as a "debt trap" A trap means that you can't get out. If everyone who does payday loans is really trapped in payday loan debt, eventually they would not be able to pay anything back, and the lenders would be out of a client base, and thus out of business. However, it is evident that they are doing just fine, which to me means payday lending is more of a "in and out" type of loan, and not a "trap" Use a better metaphor next time,like "Financial emergency in and out solution."

I'm Convinved | 1:14 p.m. April 22, 2008

I used to look at Payday Lenders as a bunch of loan sharks, but I've changed my mind. Bank fees and other late-payment penalties can be as bad or worse than the fee to get a payday loan.

Are payday loans the best option? Probably not. But they might not be the worst either.

Also, government regulation almost always backfires. Free markets and competition allocate resources much more efficiently than a government ever could, especially over a long period of time. No one is being forced to use payday loans.

The real answer is to work hard, and live well below your means. Payday loans are an answer, but not the best one.

Payday Loan Propaganda | 1:48 p.m. April 22, 2008

It's nice to see all the Payday Loan owners out in force protecting their turf so that they can continue ripping off the people who are least able to pay their outrageous interest rates.

Government is continually passing laws to protect people from themselves, like seatbelt laws. This is another case where government should step in to protect people from themselves.

Bounce a check or two, pay the outrageous NSF fees, and you'll quickly learn to stop floating checks.

JaMarcus | 3:31 p.m. April 22, 2008

It nice to see all the, "rich" people out in force. It's easy to live within your means when you have the money. Try living paycheck to paycheck with no savings and see what options you have when you need to take a sick child to the doctor and pay for medication. If the govenment passes a law to protect people from themselves, are they really protecting the people? I enjoy seeing all the comments from people who have never had to borrow money. All they need to do is give Daddy a call. Keep Payday Lenders, for most of us this is a great option.

Paycheck to Paycheck | 4:00 p.m. April 22, 2008

You don't have to be "rich" to stop living paycheck to paycheck, you simply have to consume less. If you can't afford your house, sell it and rent. If you can't afford a rental live in a trailer. If you can't afford a trailer, find someone else and split rent with them. It's not easy to get out of a hole but it can be done.

I remember a time when I was in college and I was trying to live off $10 of food per week. I bought a huge bag of pancake mix and a gallon of syrup and ate pancakes everyday.

JaMarcus says "try living paycheck to paycheck with no savings." Well, I have tried that, and it's terrible. I'll never go back to that if I can help it.

I'm not saying its easy, but it can be done by anyone who is willing to work hard and live BELOW their means.

Wheezy | 4:03 p.m. April 22, 2008

I do not believe there is a problem with payday lenders. The issue is the interest rates they charge. Not long ago there were usury laws on the books that limited interest. Bring back the law and the problem will self adjust.

Wouldn't It Be Great . . . | 4:28 p.m. April 22, 2008

. . . if background information were included for each person who posts a comment here? I'd wager that many who posted above are involved, in one way or another, with the "payday lender" industry.

It seems so obvious that there is a
constant "publicity campaign" going on to make a silk purse out of the payday lenders' "sow's ear."

And, such charades play well in Utah where the legislature is constantly influenced by similar antics -- and uses such tactics to explain its unwillingness to tackle issues that would take money from their friends, employers, and cronies.

The "problem" with regulating the payday lender industry is simple -- it would not only "cap" the amount of money that such lenders can earn, it would be a step toward regulating banks.

The banking lobby has simply too much, indeed way too much, power and influence for that to happen.

But, let's not 'fess up to that. Instead, let's make up nice, clean stories about what a fine and beautiful thing it is to have payday lenders who provide such a healthy and wonderful alternative to all of life's [short-term] financial ills.

Yeah, right!

Use if needed... | 8:42 p.m. April 22, 2008

Payday loans are something to tide a person over in times of need or difficulty. I have used them before and never had any trouble getting back out of debt. Now my financial situation is much better than it was back then, and I have good credit, so it's not necessary to use them anymore, but good to know they're around if needed. Many people are stuck with stagnant wages, sky-high rent for horrible, crumbling apartments, and dying vehicles and simply cannot always make do with what they earn. They work multiple jobs, cut what they can, but bills must be paid (electricity, rent, etc.) and sometimes having $50-100 in late check fees would kill a family's budget in a month. The payday loan averts that and costs $15-20 instead. Do the math.

Re: Wouldn't it be Great... | 10:59 p.m. April 22, 2008

...if the background information of each person who posted a comment here? I'm certain the persons whining about consumersï¿½ right to choose are bought and paid for consumer advocates. These left-leaning advocates are bank rolled by George Soros, Ralph Nader, and the credit unions to fight consumersï¿½ right to choose payday loans.

Look up Martin Eakes and the Self-Help Credit Union in Forbes and you'll see the true colors of these self-righteous advocates.

Credit unions hate payday loans so much because payday loans eat into credit unions enormous profit margins gained via overdraft, bounced check, and late payment fees (about 60% of their profits come from these products). When is the D-News going to run a story on that?

The self-appointed consumer advocates on this post are whining because they can't tell half truths anymore without the lenders and borrowers defending their position.

It's ironic that consumer advocates want to limit discussion and comments on this matter. That speaks volumes about them.

Contrarian | 11:05 p.m. April 22, 2008

The real problem here boils down to repayment. Payday lenders collect what is owed to them. Traditional lenders try, however the people of Utah just file for bankruptcy. It seems the people of Utah don't want a business in town that can successfully collect it debts.

I use payday loans... | 9:08 a.m. April 23, 2008

ï¿½...payday lenders who take advantage unduly of people who are vulnerable in our community," Becker said. This comment (from our Mayor) is erroneous. I use payday loans, and I make $50,000 a year. I am not a ï¿½vulnerableï¿½ person. I am smart enough to weigh my options and pick what financial alternatives work best for my needs. I would like to see people stop judging those who use payday loans; stop assuming we are a bunch of idiots who cannot balance our check books!!

Let the Market Decide | 10:29 a.m. April 23, 2008

As Steve Colbert says the Market will decide. There must be a need for this type of business so leave it alone. Let people make their own choices.

Risk | 10:32 a.m. April 23, 2008

If people understood financial risk they would understand that a company that takes on high risk deserve a greater rate of return. Payday loan places are taking on a greater risk than any bank or credit union and yet their ROI or ROE is about the same. So why are banks making so much profit if they are not taking on as much risk??

RE: I use payday loans... | 12:29 p.m. April 23, 2008

You comments of: "This comment (from our Mayor) is erroneous. I use payday loans, and I make $50,000 a year. I am not a ï¿½vulnerableï¿½ person. I am smart enough to weigh my options and pick what financial alternatives work best for my needs. I would like to see people stop judging those who use payday loans; stop assuming we are a bunch of idiots who cannot balance our check books!!"

I'm sorry dude, if you earn that much and still have to go to pay day, then you are sadly among those who have little self control to spend below your means, and can't balance your check book. It's simple math, when you can't pay for things from what you earned, then you over extended yourself.

I earn about as much as you do, and are able to put away $2,000 a month into savings. So, what's the difference? You extended your financial habits then me.

Simple as can be, it's so elementary it's not even funny.

Re: Let the Market Decide | 4:24 p.m. April 23, 2008

Your statemtent of: "As Steve Colbert says the Market will decide. There must be a need for this type of business so leave it alone. Let people make their own choices."

Unfortunately, history has shown, when you let the people make their own poor choices, it's the rest of us taxz payers who have to also carry the burden of their actions.

Hint, the housing bubble. Their poor actions of buying something they couldn't afford, ended up affecting the food on the tables of millions of Americans.

So, do you think we should just let the people, or the market bear the brunt of our hard earned money to cover their stupidity?

You must also know that auto accidents due to poor driving skills or habits, indirectly hits your pockets by higher premiums.

It's all connected. This is the world we live in now.

So, to say, let them, it's saying to the rest of us, let everyone else pay for their poor money habits.

How inconsiderate and selfish that is!!!

By the way, the stores that have ran rampant all over the city, makes the neighboorhood ugly. Somehow it gives the impression that it's Mexico City.

Re: Re: Let the Market Decide | 10:55 p.m. April 23, 2008

Your comments about society having to bail out the free market is fundamentally flawed.

In a free market system government does not bail out those who fail to meet their obligations. If one defaults then they or the lender is responsible for covering the costs associated with the defaulted loans, not taxpayers.

Hint: Taxpayers have not had to bail out the housing market, so don't claim that it has increased your taxes, because it hasn't.

What these socialist consumer advocates are proposing is having you and every other taxpayer fund short-term lending for those who want these loans. What they & other progressives want is selfish because it places the burden on me (a taxpayer).

I suggest going back to school and taking a few economics classes before pontificating about how the free market raises your taxes. Remember, it is the government that does that.

Re: Re: Let the Market Decide | 10:17 a.m. April 26, 2008

It looks like that you're not seeing that the government is bailing out the failure of big banks with taxpayer's money.

Have you ever heard of the recent sale of the big bank to JP Morgan? Obviously not! Who helped paid for their loans from the company JP just purchased?

Advice that would speed things up is to get your head out of the sand.

It's not about the free market that I talked about, it's the burden that eventually falls onto taxpayers over the failure of the free market.

The last year should be plenty of evidence. Remember the stimulus, it's not Santa Claus that's paying for it.

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