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Senate Advances SB16 to Regulate Payday Lenders, Keeps Interest-Rate Cap for Later Consideration
Summary
Senate passed SB16, a set of lending-registration and consumer-protection amendments aimed at payday lending and check-cashing businesses: it increases registration enforcement and disclosures, caps rollovers at 12 weeks, authorizes fines and administrative penalties, but does not include an interest-rate cap.
The Utah Senate on Jan. 16 advanced Senate Bill 16, a package of amendments that increases regulatory oversight of payday lending and check-cashing businesses while stopping short of imposing a cap on loan prices in this bill.
Senator Mike Maine, sponsor of SB16, described the measure as a significant update to the state's approach to the industry, noting the sector's 15-year presence in Utah and an evolving need for regulation. Key provisions in the bill include: elimination of treble damages for collection under certain chapters; a $500 fine per office for late registration; required contract disclosures including a right to make a partial payment (at least $5) and a right to rescind a contract the next business day; a limit that allows rollovers only up to 12 weeks; requirement that lenders designate in-state agents for service of process; administrative fines up to $1,000 per violation and a $30,000-per-lender annual cap; and changes to the exam/registration cycle and Internet lending clarifications.
Debate focused on consumer-protection trade-offs. Senator Butters asked whether the bill addresses "how high is up" — in other words, whether the bill caps fees; Maine said the bill does not set an interest cap, explaining that earlier efforts to include a cap were a deal-breaker but other bills in the House were addressing caps. Senator Hickman and others emphasized the importance of targeting consumer harms and noted the industry's legitimate uses for some populations. Senator Fife highlighted two particularly vulnerable groups — low-income families and military personnel stationed near bases — who rely on such services.
Senate members also discussed practical mechanics and enforcement: the average industry fee was described on the floor as roughly $8 per $100 (explained as "about $8 per hundred dollars" on the floor), and members confirmed the statute limits rollovers to 12 weeks and that default-judgment interest accrues at statutory rates after judgment.
The bill passed on the floor by recorded vote and will proceed for further action per legislative schedule.
