ProPublica logo design Utah Representative Proposes Bill to avoid Payday Lenders From using Bail funds from Borrowers
Debtors prisons had been prohibited by Congress in 1833, but a ProPublica article that revealed the sweeping abilities of high-interest loan providers in Utah caught the eye of 1 legislator. Now, he’s wanting to do something positive about it.
Feb. 14, 5:17 p.m. EST
Series: The Brand New Debtors Prisons
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A Utah lawmaker has proposed a bill to prevent high-interest loan providers from seizing bail funds from borrowers who don’t repay their loans. The bill, introduced within the state’s House of Representatives this came in response to a ProPublica investigation in December week. This article revealed that payday loan providers along with other high-interest creditors regularly sue borrowers in Utah’s tiny claims courts and simply take the bail cash of these that are arrested, and quite often jailed, for lacking a hearing.
Rep. Brad Daw, a Republican, whom authored the brand new bill, stated he was “aghast” after reading this article. “This has the scent of debtors prison, ” he stated. “People were outraged. ”
Debtors prisons had been prohibited by Congress in 1833. But ProPublica’s article revealed that, in Utah, debtors can nevertheless be arrested for lacking court hearings required by creditors. Utah has provided a good regulatory weather for high-interest loan providers. It’s one of just six states where there aren’t any rate of interest caps regulating payday advances. This past year, an average of, payday loan providers in Utah charged percentage that is annual of 652%. This article revealed just exactly how, in Utah, such prices usually trap borrowers in a period of financial obligation.
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