Utah rep proposes bill to prevent payday loan providers from using bail money from borrowers

Utah rep proposes bill to prevent payday loan providers from using bail money from borrowers

For many years, Utah has offered a good regulatory weather for high-interest lenders.

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This short article initially showed up on ProPublica.

A Utah lawmaker has proposed a bill to cease high-interest loan providers from seizing bail funds from borrowers that don’t repay their loans. The bill, introduced into the state’s House of Representatives this came in response to a ProPublica investigation in December week. This article revealed that payday loan providers along with other loan that is high-interest regularly sue borrowers in Utah’s little claims courts and just take the bail cash of the that are arrested, and quite often jailed, for missing a hearing.

Rep. Brad Daw, a Republican, whom authored the bill that is new stated he had been “aghast” after reading this article. “This has the aroma of debtors jail,” he said. “People were outraged.”

Debtors prisons had been prohibited by Congress in 1833. But ProPublica’s article revealed that, in Utah, debtors can remain arrested for lacking court hearings required by creditors. Utah has provided a good regulatory weather for high-interest loan providers. It’s certainly one of just six states where there are not any rate of interest caps regulating loans that are payday. This past year, an average of, payday loan providers in Utah charged yearly portion prices of 652%. This article revealed just exactly how, in Utah, such prices usually trap borrowers in a period of financial obligation. Nastavi čitati “Utah rep proposes bill to prevent payday loan providers from using bail money from borrowers”