Compromise payday loan bill advances
It managed to kill Friday a bill that would have forced payday lenders to divulge far more data than they want about their loans that average 521 percent interest here, and instead persuaded a committee to endorse what critics say is a tepid alternative.
The Senate Business and Labor Committee voted 5-2 to kill SB216, sponsored by Sen. Greg Bell, R-Fruit Heights. But it unanimously passed SB83 by Sen. Karen Mayne, D-West Valley.
Bell's bill would have required payday loan stores to provide more than a dozen categories of information each year, ranging from the number of loans made to what interest rates are charged, how long loans are outstanding, how often they are "rolled over," how many separate loans individuals take, and how many loans default.
Bell said it was patterned after data collected for years by Colorado. He said it would help lawmakers collect solid industry-wide data to end an ongoing he-said, she-said battles about whether payday lenders hurt or help the poor.
But Cort Walker, spokesman for the the payday lending industry's Utah Consumer Lending Association, said the proposed reporting was too onerous, required too much proprietary information, and is not needed because "we have virtually no complaints" by consumers to state regulators.
But Linda Hilton, a payday loan critic and director of the Coalition for Religious Communities, said, "It's an industry sympathetic bill. It's essentially useless."
Sen. Wayne Niederhauser, R-Sandy, urged the committee to pass only Mayne's bill, saying it was a "consensus bill" supported by all affected groups and worked out over many months by a legislative interim work group.
But consumer groups, critics and Bell cried foul, saying the working group originally proposed a bill much closer to Bell's — which payday lenders opposed. They said consumer groups and advocates for the poor were then left out of subsequent talks that led to Mayne's softer bill.
Niederhauser then acknowledged that an early bill did call for 15 categories of disclosure recommended by regulators rather than the five in Mayne's bill, but said, "It was not a consensus ... so we worked with the industry" on what became Mayne's bill.
Bell also complained about Walker's assertion that the industry has virtually no complaints, noting that the Deseret Morning News found earlier this month that payday lenders sued nearly 27,000 Utahns for default since 2005 — and that 51 percent of all small claims suits along the Wasatch Front come from payday lenders.
Recent comments
I don't understand the need to rewrite the laws in place for...
crispychicken | Feb. 20, 2008 at 10:54 p.m.
If you don't like the fees charged by payday lenders then maybe...
Beat Them! | Feb. 17, 2008 at 3:11 a.m.
I think that this bill should be killed and thrown out and not even...
Sheri | Feb. 16, 2008 at 10:55 a.m.
