The Salt Lake City Council is about to crack down on payday lenders by prohibiting them from locating near each other. But before it does that, the council should see what kind of picture a new state law will paint about the practices of these purveyors of short-term loans with sky-high interest rates.

Sen. Karen Mayne, D-West Valley City, sponsored Senate Bill 83 last year, and it became law on May 5, 2008. It requires payday lenders, or deferred-deposit lenders, to report annually on their operations so legislators can determine whether they are providing a necessary service or fleecing poor and vulnerable Utahns who are struggling to make ends meet.

The new law will collect hard data about average loan amounts, how often loans are extended before they are paid in full, how much interest increases for subsequent loans, the minimum and maximum interest rates charged and the number of loans repaid the next day.

Payday lenders cater to -- or prey upon -- people who need a relatively small amount of cash in order to make it to their next payday. Hence, the name. But some of these people can't repay the loan when it's due and end up borrowing more to make the payment. Interest rates can reach several hundred percent, figured on an annual basis, creating a debt that can be extended seemingly forever at a very high cost to the borrower.

In some circles, it's called loan sharking. But the lenders maintain most of their business is with people who are happy to be able to get the $100 they need when they need it and repay it with $15 interest in two weeks.

The reports required by the new law will help state and local lawmakers decide whether payday lenders are as predatory as some believe and whether they should be restricted or left alone.

In the meantime, the City Council's plan to go on the offensive by zoning to keep payday lenders from operating within a certain distance of one another should be put on hold. The council wants to discourage a borrower from getting a loan from one lender to make payments on another loan taken out from a different lender just down the block and getting himself further into debt.

That might be the best approach, but nobody can say with certainty.

It would be premature for the council to act now, without the information that will be forthcoming in just a matter of months.