Don’t limit payday lenders
February 5, 2010 | Utah, industry | Comments (0)The head of the Utah Consumer Lending Association has this to say:
Some members of the city council believe this ordinance is not intended to discriminate against short-term lenders, that is absurd. If the city government’s primary issue with cash advance lenders is the fees assessed by lenders (Generally $15 to $20 per $100 borrowed) then Ogden should impose the same proposed restrictions on all financial institution that charges the same as or more than payday lenders. A 2009 study by the FDIC shows that overdraft fees are four to seven times more expensive than payday loans. Credit Unions that charge overdraft and Non Sufficient Funds fees greater than $15 should be forced to hang signs in their lobbies telling consumers that Ogden City believes consumers should seek alternative forms of short-term financing instead of utilizing overdraft protection and the fees associated with that service.
The push for this ordinance has not come from concerned residents of Ogden, rather a socialistic ACORN type organization, the Coalition of Religious Communities. This group has duped the council into believing that there are serious issues with short-term loan providers, when indeed the facts show otherwise. The folly of the council to allow the Coalition to draft its proposed ordinance should be troubling to residents. Ordinances that unconstitutionally target legal and legitimate businesses often land municipalities in court defending poorly implemented public policy.
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