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."