Utah payday lenders refuse military loans

Published: Oct. 2, 2007 at 8:13 PM

SALT LAKE CITY, Oct. 2 (UPI) -- Utah storefront lenders are refusing to make loans to military members rather than give them low rates mandated by a new law, an industry association said.

The new federal law, which took effect Monday, caps the yearly interest on "payday loans," car-title loans and tax-refund-anticipation loans at 36 percent for members of the military and their families.

Utah payday-loan interest rates generally average 521 percent and car title loans average 300 percent, the Salt Lake City Deseret Morning News reported.

Utah payday lenders simply cannot make a profit if they charge only 36 percent, so they would rather not do business with members of the military, payday loan industry spokesman Cort Walker told the newspaper.

While refusing loans to someone based on such things as race or religion would violate civil rights laws, refusing service to the military does not violate laws because "you can't force a business to enter into a transaction that causes it to lose money," said Walker, whose Utah Consumer Lending Association trade group represents Utah short-term lending stores.

Utah Division of Financial Institutions Supervisor Jerry Jaramillo said the state would review the new law's ramifications.

He said it also would watch for complaints and any court decisions about refusing loans to the military.

The Defense Department called payday lending practices "predatory."

© 2007 United Press International, Inc. All Rights Reserved.
Order reprints



Additional News Stories
MLS: Los Angeles 2, Houston 0 (OT) (55 min)
Your Daily Horoscope
The almanac
NBA: Denver 105, LA Lakers 79
NBA: Sacramento 109, Houston 100
COL BKB: Georgetown 74, Tulane 58
NBA: Atlanta 97, Boston 86
fark
Merlot the cat, who went missing 17 months ago when he was less than a year old, has returned home...
Middle school teacher resigns job she held for 22 years, after she's caught stealing small amounts...
But honestly, who amongst us hasn't mistaken a uniformed police officer for a Sonic drive-through...
Creepy weatherman leaves around 100 voicemails to girl he just met. Wonders why she won't call him...
Man charged with battery, grand theft, exhibition of a deadly weapon and a possible hate crime for...
Comic books are doing surprisingly well even when big-boy books are struggling