Utah Lawmaker Wants To Put Limit On The Number Of Payday Loans That Can Be Taken Out At One Time

Those who advocate for the poor think this is a great idea. Other states already have a similar database and say it is very easy and inexpensive to set up. However, payday loan companies aren't so happy about this proposal and vow to fight it. Wendy Gibson, the district manager for Check City said, “It’s a matter of invasion of privacy. My customers don’t want a Big Brother government database watching them and preventing loans.” Payday loan companies in Utah charge borrowers $20 for every $100 they borrow. Most people can't afford to pay it back within the two weeks so they default on the loan.

Daw says that once a person defaults on the loan, the payday loan company will pressure them to take out another loan to pay off the previous one. This sends the borrower spiraling into debt with no escape in sight. Daw also said he had spoken with several individuals who had several payday loans at one time. One even had as many as 13 at the same time. This is the very thing Daw is trying to stop with his proposal. 

And though he has unsuccessfully tried to push through a similar proposal before, he is not giving up. He has refined this idea and took it back to the committee. He believes that passing a bill of this nature will end annual battles over payday loans. And while some payday loan companies think the bill is a bad idea, truth is it can help them. According to Mike Hanna of Veritec Solutions, using a database can actually help decrease the amount of loans that don't get paid back. In other words, a database can help save payday loan companies money. Even still, Wendy Gibson is not buying it. She said that new laws are already in place that help protect borrowers and a database is not needed. It looks like the people of Utah will just have to wait and see what happens.