The Ogden City Council says there should be only 15 “short-term lenders” in its town.  From the story: 

The ordinance limits the number of short-term lenders in Ogden to 15. There are currently 21 in the city.

Those that already exist will be allowed to remain, but if they close, others would not be allowed to open at new locations until the number dips below 15.

The limit is less stringent than a recommendation from the Ogden Planning Commission, which suggested the number of short-term lenders be capped at eight.

The ordinance also prohibits short-term loan businesses within 1,000 feet of a similar business or within 660 feet of a pawnbroker or a sexually oriented business, to prevent clustering.

From the Cache Valley (Utah) Daily:

Logan Municipal councilmember Jay Monson had high hopes for a bill putting restrictions on payday lending companies to be passed during the 2010 session of the Utah Legislature. But at a listening forum with local residents on Saturday, three local lawmakers said they don’t know what happened to the bill Monson was referring to.

Representative Curt Webb, R-District 5, said he does know that proposed bills have come up the last couple of years.

“Believe me, there were as many people that came in to defend them as necessary, as workable, and important to them as there were that came in said they were abused by that system,” Webb said.

“You don’t usually see the legislature taking a stand against them primarily because they seem to see it as more of a free market consideration.”

With you the shouting and name-calling, you’d think these people were New Yorkers.   (No offense, the Payday Pundit is from the New York area.)  From the letter to the editor:

…our Coalition of Religious Communities has no problem with being called a socialist Acorn-type group. It is much better than carrying the label of Loan Shark, which all payday lenders do.

I guess we’re not going to have a high-minded debate out there.   But seriously, these people don’t object to being called “socialist Acorn-type group”?  Something’s wrong with that.

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.

I used to think this was a free-market, libertarian kind of state.   From the story:

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.

No where in this editorial do they suggest how working people should get small loans.

From the story:

A bill Mayne is co-sponsoring with a Republican lawmaker is close to passing out of the Senate, after already clearing the House.  It shortens the time limit interest can accrue on short-term loans from 12 weeks to 10. It also allows customers to set up an extended payback plan once a year to pay back the loan in four payments, and establishes reporting criteria for the industry.

The Ogden, Utah City Council has an idea:

Payday lenders would also be required to post at the entrance of their establishments large signs in English and Spanish that make the following disclosure: “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.”

Not sure how I feel about this.   It’s actually similar to language the industry used in an ad campaign two years ago.

We missed this from yesterday:

A bill to further regulate the payday-loan industry cleared the House on Tuesday in a 65-8 vote.

HB15, sponsored by Rep. Jim Dunnigan, R-Taylorsville, would limit to 10 the number of weeks a two-week loan could roll over. The current cap is 12.

That ceiling is important, Dunnigan said, because it would stop further interest and fees from accruing — and borrowers could then begin to pay down the balance.

The measure, supported by the payday-loan industry and advanced to the House without a committee hearing, also would bar lenders from calling a borrower’s workplace to collect — if the employer has asked that they refrain from that practice.

A legislature that wants to works help consumers without destroying jobs and business.

The Salt Lake City Tribune editorializes with the usual blather:

Rep. Jim Dunnigan has prefiled a bill for the coming Legislature that could help some customers of payday lenders escape the clutches of a death spiral of debt. It would reduce the maximum period of rollover loans from 12 weeks, under the current law, to 10 weeks, and it would allow borrowers to convert loans to a fixed-term payment plan of at least 60 days.

These are sensible reforms, but they won’t prevent unwary, undisciplined or unlucky borrowers from falling victim to what amounts to loan sharking. Only caps on interest rates could do that, and, unfortunately, Utah legislators, always wary of intervening in the market, have not shown any inclination to go down that road.

No, capping interest rates is a ban.   So let’s here it for Utah legislators who are “always wary of intervening in the market.”

Because it’s now helping Utah’s merchants get short-term loans.  From the article:

Other Utah firms are turning to less traditional means of funding. Merchant cash advances, which are similar to consumer payday cash advances and business accounts receivables factoring, are loans made against future credit card transactions.