Payday lending is legal in Utah.
Utah imposes no limit on the payday loan amount to be offered in the state. The maximum loan term is 70 days (10 weeks). The APR is 658%*. The amount of finance charges is not specified. Criminal actions against borrowers are prohibited.
Utah has very lenient payday loan regulations. Many attempts to introduce more restrictive payday loan practices haven’t been very successful for years. The most effective was the amendment of 2016 as it drove one of every six lenders away from the state. Currently, there are 50 payday loan companies, and 32 are registered to offer payday loans online.
Utah Payday Lending Statutes
Payday lending in Utah is regulated by Check Cashing and Deferred Deposit Lending Registration Act (Utah Code Ann. 7-23-101 et seq.)
A payday loan in Utah is officially called “deferred deposit loan“.
“A deferred deposit loan that is made by a person who is required to be registered under Utah law but who is not registered is void, and the person may not collect, receive, or retain any principal or other interest or fees in connection with the deferred deposit loan”, according to the Consumer guide to payday lending in Utah.
Payday loan laws in Utah prohibit unauthorized lenders to make deferred deposits. Mobile payday cash advance operations are also prohibited.
The main rule is that the lenders should make an application to open the business and keep the registration in order. The full rundown of all fees, interest, and a payment schedule should be posted at a visible place at Utah lending business. The company is obliged to provide the customers with a copy of the agreement with all payment dates, terms, and fees.
Loan Amount in Utah
- Utah has no set limit to a maximum loan amount.
- There is no limitation to a number of loans that a person can apply for.
Rates, fees and other charges in Utah
- There aren’t any restrictions with regard to interest rates and finance charges.
Real APR for payday loans in Utah can reach 658% (*According to the Center for Responsible Lending 2019: “Typical APR based on
Maximum term for a payday in Utah
- The maximum time period a payday cash advance may be taken is 10 weeks.
- It is allowed to roll over loans, provided that the loan term is no longer than 10 weeks.
- Lenders are forbidden to take any criminal actions against borrowers.
- However, lenders may seek judgment against borrowers for the loan amount and interest, also court costs and attorney’s fees.
- Lenders are allowed to charge a maximum of $20 if a check bounces or is returned.
Utah, borrowers are allowed to make partial payments of $5 at no additional charge at any time of the repayment period.
- Borrowers can a loan before 5 p.m. on the business day following when a loan was received.
To find the information about payday lenders of the state you may visit the Utah Department of Financial Institutions.
The History of Payday Loans in Utah
- 1999 – Utah passed “S.B. 57, the “Regulation of Check Cashing” (Title 7, Chapter 23, Check Cashing Registration Act). It required registration and regulation of companies that provide check cashing or deferred deposit loan (payday loan) services, or both.” (According to the report of the Commissioner of Financial Institutions of Utah.)
- 2003 – S. 130 amended the “Regulation of Check Cashers” and allowed borrowers to rescind deferred deposit loans by 5 p.m. the next business day and also to make partial payments in increments of at least $5 at no cost. Internet lenders also became covered by those laws.
- 2006 – The Military Lending Act effectively capped payday loans offered to the military at 36% APR. This federal law has no exceptions, thus, no lender in Utah is now allowed to offer loans to the military in excess of 36% APR.
- 2008 – S. 83 amended the “Regulation of Check Cashers” and prohibited lenders from extending a new loan on the same business day the payment is made.
- 2010 – H.B.15 reduced the term for rollovers from 12 weeks to 10 weeks.
- 2012 – B.459 amended the “Regulation of Check Cashing” and made all the loans extended by lenders who were not properly registered under this chapter void.
- 2014 – The bills B. 46 “Deferred Deposit Lending and Forum Requirements” and H.B. 47 “Deferred Deposit Loan Amendments” were introduced by the Utah Legislative. They would cap the number of loans a person can take at one given time. Unfortunately, both of them failed.
- June 2, 2016 – The Consumer Financial Protection Bureau (CFPB) proposed a Payday Loan Rule that hasn’t yet fully come into effect (expected in November 2020).
- 2016 – B. 292 Deferred Deposit Lending Amendments was passed. It required that lenders must check a borrower’s credit report before giving a loan, report loans to the state database, offer loan extension up to 90 days at no interest, and also, lenders have to report on the number of nonpayment lawsuits they file annually.
- 2017 – “HB 40 “Check Cashing and Deferred Deposit Lending Amendments” amended Title 7, Chapter 23, Check Cashing and Deferred Deposit Lending Registration Act, to modify the registration requirements, grant rulemaking authority, amend the restrictions on extensions of deferred deposit loans, and change the requirement of each premise be examined annually. Effective May 9, 2017.” According to the report of the Commissioner of Financial Institutions of Utah.
(As of May 2019)