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Senate advances financial‑services bill aimed at retaining lending industry, critics raise consumer concerns
Summary
Senate Bill 113, described by its sponsor as necessary to keep industrial loan corporations and related financial businesses in Utah, advanced to the third‑reading calendar after discussion about consumer fees, prepayment penalties and competitive pressures. Proponents highlighted jobs and community reinvestment; some senators pressed for comparative data and consumer protections. (Transcript-based)
The Utah Senate moved Senate Bill 113 to the third‑reading calendar after a lengthy floor presentation on Feb. 5, 1999, in which supporters said the measure would help retain and grow a cluster of financial services companies that have generated jobs and local reinvestment.
Sponsor Senator Knudson framed SB113 as an economic‑development measure that would exempt certain depository institutions from regulation of service charges for dishonored checks, remove caps on selected delinquency charges in specific circumstances, and permit certain prepayment penalties. He said the state’s policy since the 1980s helped attract industrial loan corporations and similar institutions, producing jobs and community reinvestment funds. “These are great jobs… they invest in our state,” Knudson said, adding that the bill includes technical corrections and that market competition would discipline fees.
Senator Stevenson, speaking in support, said the state cannot effectively cap fees for out‑of‑state credit‑card operations that serve Utah consumers and argued Utah companies must be allowed to compete. “If we place caps on those domiciled in the state of Utah, we are essentially saying you can’t compete fairly with those other companies domiciled outside the state,” Stevenson said.
Opponents pressed for consumer‑protection analysis. Senator Hillier and others asked for side‑by‑side comparisons with other states and how fee caps affect consumers; Senator Suazo asked whether removing caps would raise or lower fees for Utah residents. Knudson said letters and materials had been distributed to senators and that additional comparative materials could be prepared for the next day’s consideration.
The motion to move SB113 to third reading passed; the roll‑call announced on the floor recorded 27 aye votes, 1 nay and 1 absent in the transcript. The bill will be revisited on third reading, where any additional consumer‑protection amendments or fiscal details can be considered.
