A report released by The Coalition of Religious Communities (CRC) in Utah says more than a third of small claims lawsuits in the state's justice system are related to payday loan collection.
Utah does not cap interest rates lenders can charge. Cash loan interest rates are often seen as high as 520%. Payday loan centers have been either banned or heavily regulated in 15 states - most recently, Arizona.
Rep. Brad Daw, R-Orem, is sponsoring House Bill 113 to limit a borrower to only one payday loan at a time. The bill also would create a database listing customers who do not qualify and there would be a five-day waiting period between loans.
The CRC says the payday loan bill would regulate what they call "abuse in the system."
"Members of my own family have turned to payday loans and I've personally witnessed them rolling over these loans time and time again, incurring further and further fees and more and more interest," says Evan Done, a spokesperson for the group.
