Nancy Saxton wants to crack down on faxless payday loan companies that provide short-term loans and charge annual interest rates of up to 550 percent.
The Salt Lake City councilwoman has asked for - and received - support from the City Council to pursue an ordinance to limit the number of the check-cashing businesses.
Saxton, who is running for mayor, said she has wanted to limit the cash advance loans‘ businesses as she has noticed their proliferation in her central city district - there are eight within two blocks of her - and because she believes they prey on the poor.
“It gags me to think about the kind of interest” rate they charge, she said.
In addition, she doesn’t believe they contribute to the city’s goal of more pedestrian-friendly neighborhoods. The stores don’t generate much foot traffic, she said.
There are at least 24 providers of payday advances in the city.
The new ordinance wouldn’t eliminate existing shops, though. But it could limit the total number in the city and their location. West Valley City forbids check-cashing shops within 600 feet of each other and limits them to one per 10,000 residents. In Salt Lake City, there is at least one such business per 7,572 residents.
Councilman Dave Buhler, who is also running for mayor, said he wouldn’t be comfortable limiting the number of quick payday advance operations based on population.
The federal government has capped interest rates at 36 percent on payday loans for military personnel for security reasons.