Another effort to provide some protections for consumers who get trapped in Utah's payday lending maze failed in the House Business and Labor Committee last week by a 9-4 repudiation.
House Bill 113, sponsored by Rep. Brad Daw, R-Orem, was intended to create a database of consumers who have a payday loan account or are in default of a payday loan. People on the database would have been prevented from obtaining another payday loan.
It makes sense to us. More reputatable financial institutions don't hand out loan after loan to consumers, particularly if the consumers have poor credit (which is one reason a person would seek a payday loan, which has interest rates that can run into the hundreds of percent and can be rolled over).
But we're not surprised that the reform bill failed quickly, or that Top of Utah Reps. Gage Froerer, R-Huntsville, and R. Curt Webb, R-Logan, were among the nine to reject HB113. (Ogden Republican Rep. Dixon Pitcher voted for the reform bill). Frankly, Utah is manna from heaven for the payday loan industry. Our Legislature allows this sleazy industry to reap all it can sow from its consumers who fall into the high-interest trap.
According to Salt Lake City media, those opposed to the reforms said it wasn't government's role to stop someone from making a poor financial choice. Sigh. It is government's role to protect consumers from predatory corporations which lay in wait to feast upon the most vulnerable of our neighbors. It's called "Poor Inc.," and too many corporate leeches have gotten rich off of worried consumers. Think of the stress and dysfunction these corporations have caused communities, individuals and families with their unhealthy presence.
Based on the reasoning of Froerer, Webb and the other seven naysayers to HB113, it's reasonable to think that they wouldn't support any reforms designed to avoid a repeat of the recent global financial recession. In the meantime, payday loaners rule in Utah.
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