Quantcast
Get breaking news alerts via email

Click here to manage your alerts
Payday loan reform bill passes Senate, goes to governor
Politics » Reform has easy sailing this year instead of usual fights.
First Published Mar 06 2014 11:28 am • Last Updated Mar 06 2014 09:19 pm

Two years ago, the payday-loan industry blocked reform with tactics that helped fuel the scandals that toppled former Attorney General John Swallow. On Thursday, lawmakers passed a reform bill that sailed to passage thanks to the scandals.

The measure will give borrowers time to pay off loans without interest or sanction after 10 weeks of high-interest payments; ensure that any lawsuits against borrowers are filed in courts near their homes; and require data disclosure that may end years of debate about whether the industry is predatory.

Join the Discussion
Post a Comment

The Senate passed HB127 on a 29-0 vote, and sent it to Gov. Gary Herbert for his signature. The House previously passed it 69-4.

The House Special Investigative Committee recently found that in 2012, the industry quietly spent hundreds of thousands of dollars — funneled by Swallow in hard-to-trace ways — to defeat former Rep. Brad Daw, R-Orem, who had pushed for reform.

In return, payday lenders also gave Swallow big donations in "dark money" that he used to defeat his primary election opponent, Republican Sean Reyes, who eventually replaced Swallow after he was pressured to resign.

The sponsor of the reform bill this year was Rep. Jim Dunnigan, R-Taylorsville, chairman of the committee that investigated Swallow.

"There have been concerns voiced by the lending industry. They are not excited about this legislation," Sen. Curt Bramble, R-Provo, the Senate sponsor of the bill, said in debate earlier this week. "But these are some needed reforms that should have some positive impact."

Payday loans currently carry an average of 474 percent annual interest in Utah. The loans are usually made for two weeks initially, but can be renewed or "rolled over" for up to 10 weeks, after which no more interest may be collected.

Dunnigan has said lenders’ threats of suing borrowers for default or threatening to deposit checks that borrowers leave as collateral — which would result in bounced-check fees — often lead borrowers to take out more payday loans from other lenders to pay off earlier loans.

The bill would give borrowers 60 days after reaching the 10-week limit to pay off the debt without lenders taking further action against them.


story continues below
story continues below

"This ends that cycle of debt," Bramble said.

The bill also would require lenders to file any default lawsuits where borrowers live or obtained the loan. Many lenders now make customers waive that right.

Lenders also would be required to do at least minimal checking to see if borrowers can afford loans and rollovers. And it would require the industry to report to the state how many loans go the full 10 weeks, how many end up in default, and the amounts involved.



Copyright 2014 The Salt Lake Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Top Reader Comments Read All Comments Post a Comment
Click here to read all comments   Click here to post a comment


About Reader Comments


Reader comments on sltrib.com are the opinions of the writer, not The Salt Lake Tribune. We will delete comments containing obscenities, personal attacks and inappropriate or offensive remarks. Flagrant or repeat violators will be banned. If you see an objectionable comment, please alert us by clicking the arrow on the upper right side of the comment and selecting "Flag comment as inappropriate". If you've recently registered with Disqus or aren't seeing your comments immediately, you may need to verify your email address. To do so, visit disqus.com/account.
See more about comments here.
Staying Connected
Videos
Jobs
Contests and Promotions
  • Search Obituaries
  • Place an Obituary

  • Search Cars
  • Search Homes
  • Search Jobs
  • Search Marketplace
  • Search Legal Notices

  • Other Services
  • Advertise With Us
  • Subscribe to the Newspaper
  • Access your e-Edition
  • Frequently Asked Questions
  • Contact a newsroom staff member
  • Access the Trib Archives
  • Privacy Policy
  • Missing your paper? Need to place your paper on vacation hold? For this and any other subscription related needs, click here or call 801.204.6100.