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Utah House amends payday-lending law to block refinancing loophole after audit
Summary
On Jan. 25, 2017 the Utah House passed HB 40, amending state payday‑lending law after an audit found lenders were issuing 'new loans' to restart a 10‑week rollover clock; the bill defines 'refinance,' streamlines background checks and limits storefront inspection requirements.
The Utah House of Representatives on Jan. 25 passed HB 40, a package of amendments to the state's check‑cashing and deferred deposit lending laws aimed at closing a refinancing loophole that an audit found had left borrowers trapped in prolonged repayment cycles.
Representative Dawe, the bill sponsor, cited the audit as the impetus for the changes and summarized the problem: "You cannot issue a new loan to refinance an old loan," he said, describing a practice in which some lenders issued what looked to borrowers like…
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