Defending Payday Loans In Utah

In an effort to defend Utah's payday loan providers, Mark Shurtleff, the attorney-general of that state, came out in defense of payday loan vendors on Wednesday. Without the presence of payday loan and cash advance providers in the state, Shurtleff contends that it would hurt the citizens of the state more than it would help them. He forecasts, just as what has been occurring in Georgia, bankruptcies would rise sharply and repossessions would increase dramatically in Utah if payday loans were banned.

Although payday loan and cash advance providers offer their loans at higher interest then the banks, they are still not comparable. This is because banks will not fund a loan to an individual who has bad credit or has filed for bankruptcy. On the other hand, payday loan lenders do, which is one reason the interest is higher than a banks per se. Moreover, payday loan providers have many expenses and often spend in excess of $15 actually servicing the loans. So in reality, payday loan providers are not engaging in predatory lending, but are rather resolving the shortcomings of the government and banking system by providing short term cash advances to individuals who would otherwise not be able to obtain them.

Additionally, it is a contravention of the basic foundation of American society to take away an option from a person, because it diminishes their freedom of choice. Individuals are not forced into taking out a payday loan or cash advance. Rather, since they are unable or do not want to receive a loan from the bank or another source, they turn to cash advances and payday loans in order to avoid bankruptcy, pawning off personal belongings and bouncing checks.