The Utah legislature has killed a bill that might have prevented consumers from falling into a debt spiral.
House Bill 113 considered the creation of a new database that would listed users of payday loans. Anyone with an outstanding loan, or in default on an existing loan, would have been
blocked from being able to get a new deferred deposit advance.
The bill was actually quite extensive and would have reached into other elements of the basic payday model. It included these new rules:
- consumers would be allowed to make a partial payment, although for not less than $5, on a loan.
- Lenders could establish a repayment plan.
- full disclosures on all fees, along with procedures for complaints and the right to rescind as late as the next business day.
The bill would also allow a consumer to walk into the store and place themselves on the no-loan list.