We urge the Ogden City Council to enact into law a recommendation from the Ogden Planning Commission to limit payday loan establishments in Junction City to eight.
Although the 21 payday or title loan businesses in the city would be grandfathered in, no more payday lenders would be allowed in Ogden until the number of such businesses was eventually reduced.
Also, under the proposed Ogden ordinance, payday lenders wouldn't be allowed to have garish colors that make them look like fast-food restaurants or such. Only muted earth-tone colors would be allowed for exteriors. Offices would have to be a reasonable distance from historic buildings. Also, payday lenders would be prohibited from buying precious metals.
Finally, the ordinance would require this message to be posted -- in Spanish and English -- at Ogden payday loan businesses: "This business specializes in giving high-interest loans. These loans should not be used as a long-term financial solution. Ogden city encourages you to consider other options for obtaining money if you think you might not be able to repay the full amount of your loan on the date it is due."
Naturally, payday lenders and their lawyers are outraged at the proposed law, claiming it inhibits their ability to offer a service for cash-short consumers and forces others' speech onto their premises. If you listened to the payday loan industry long enough, you would believe that they are prudent lenders to financially astute borrowers who enjoy getting quick cash at high interest rates. That, of course, makes no sense because it's not true. Payday lenders serve a specific purpose. They cater to those in desperate need of cash who can't get it from conventional means, such as a bank. They attach high interest rates that -- if the loan is not paid off soon -- would make Shakespeare's Shylock blush. Many get caught in a cycle of interest payments that extend far beyond the interest of the original loan.
It is proper for cities to regulate these types of businesses. There are more payday lenders in Utah per capita than the national average because our state has deregulated interest rates for payday lenders. That occurrence is the fault of the Republican-dominated Legislature, which has done nothing to stop that. What has occurred in Ogden is a result of that regulatory neglect: 21 payday lenders for a city of 80,000.
Other cities that have recently regulated payday lenders include Roy and Sandy. We suggest that Utah's cities get together and craft a uniform law regulating payday lenders. If every Utah city were able to lessen the adverse consequences of too many payday lenders, it would help both the cities and consumers who may fall into a payday lending snare.
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