SLC Considers Limits on Payday Lenders
None by KCPW
(KCPW News) The Salt Lake City Council is now considering limits on the number of quick cash loan businesses that can operate in the city. West Valley City and Taylorsville already have ordinances that prevent multiple payday lenders from congregating within 600 feet of each other.Salt Lake City Councilwoman Nancy Saxton says the Capital City could benefit from a similar ordinance because of what she believes are predatory lending tactics that prey on the disadvantaged. Payday lenders often charge customers as much as 400-percent interest per year. The Utah Legislature has considered capping those rates, but has hit significant opposition from the lending and banking communities. Last year, Congress passed a measure capping the interest rate payday lenders can charge to members of the military at 36-percent APR.
Email to a friendPosted in KCPW Newsroom. Copyright 2008 KCPW
1. Lyndsey said:
Applying the 36% rate cap to all would leave millions of consumers with limited options. The Department of Defense acknowledged that the 36% cap would limit the availability of credit to the military, but felt that troop readiness during a time of war outweighed their need for credit options. Military personnel are accustomed to having such decisions made for them and to living under special circumstances. To compare concerns about our troops and ability to defend our nation to the legitimate short-term credit needs of the average citizen is to do a disservice to both the troops and the general public. The hard reality is that employed, well-meaning Americans sometimes fall short of cash between paydays and efforts to prohibit or limit the supply of products in this market hurts consumers.
3. John B. said:
Let's be real with who this affects. Middle and lower income people living paycheck to paycheck. If you are upper middle class to higher class, as most of the legislature is, you've probably never been into one of these locations. I would rather borrow $300 for 2 weeks and pay $40 for it than to bounce 3 checks and have 3 bounced check fees of $60 total and $60 or more with the store. No one likes the interest rates charged, but compare it to bounced check fees of $25-$35 even on checks for $20 or less. That's outrageous.Their rates are 400-500%, but max out at 8 weeks even if the loan is rolled over. If someone can't repay the loan within a couple of weeks, they shouldn't be borrowing the money to begin with. For many people this is the lesser or two evils. The bigger evil being bounced check and other fees banks and credit unions charge.
2. Jack Roddy said:
In response to Lindsey,If a 36 % cap leaves millions of consumers with limited iptions, then change nothing except not allowing roll overs. Roll overs are what trap unsuspecting borrowers.