SALT LAKE CITY– An Orem lawmaker continues to push measures that regulate payday lending firms by filing a bill that would create a database to keep track of the number of loans held by borrowers.
Rep. Brad Daw, R- Orem said he will reintroduce a bill in an effort to cap the number of deferred deposit loans a person can have at a time. This is not the first time that Daw proposed this bill on payday lending. In both 2011 and 2012, Daw tried to pass similar bills, but was unsuccessful when he said the payday lending industry set up a smear campaign against him which cost him re-election. The bill has not yet been numbered.
Since his reelection in 2014, Daw has continued to push proposals to prevent those who are at a financial disadvantage from further debt. Orem is certainly not immune to the payday lenders. Payday loan shops dot nearly every block of busy State Street as it runs through the city.
Daw said, “When I ran for office five years ago, I wanted to fix the payday lending industry. We found a system in Florida that is very effective. We took their model and made our own, which will be passed in this bill.”
Daw plans on creating the Deferred Deposit Lending Database Program, which uses a database system that is similar to Florida’s. The Deferred Deposit Lending Database Program will make it so borrowers do not exceed more than two loans at a time. This limit will assure that borrowers will not go over 25 percent of debt in their gross monthly income.
With a database, it will be easier to track down the number of loans a person has and will prevent borrowers from having their loans renewed through a “rollover.” This will also keep track of who is eligible to take out a deferred deposit loan.
To understand the risks of using a payday loan, Daw evidence is easy to find. Daw said, “If you go to the Orem small claims court [on Friday, Jan. 8]… there [were] 34 cases presented and 32 of those cases involve[d] payday lending issues. Almost all small claims come from payday lenders.”
Daw hopes that this bill will pass because payday lending firms are known to target individuals of lower income that have little to no credit history. With this bill, Daw hopes to inform the public of the financial risk that payday lending can create.
Daw said, “Payday lending affects a significant amount of the population, especially for those who are down on their luck, kids who come right out of high school, people with no credit history, poor people, and people who ought to know better, but don’t.”[/vc_column_text][/vc_column][/vc_row]
