According to Utah payday loans laws, payday lenders who operate in this state have to be registered with the Department of Financial Institutions to be eligible to issue payday loans to the consumers residing in Utah. Clear disclosure of all terms and conditions of the loan contract in writing and also verbally is also required by the law. There should not be any hidden clauses in the contract. It is best for consumers to read the fine print thoroughly before signing anything.
There are number of federal laws that payday lending companies in Utah must abide by. For instance, they must comply with the Regulation Z of the Truth in Lending Act. The loan terms such as the amount of finance charges,annual percentage rate (APR), repayment period and others must be displayed clearly in the loan contract.
Utah Payday Loans Laws
The regulating authority in Utah that enforces payday loans laws is the Department of Financial Institutions. It also reviews the business operations of each payday lending company that is offering payday loans to the residents of the state. Here are some important points regarding the state laws that you should be aware of.
- If your loan account goes to the collection department and you are in default, you have the right to ask your lender not to contact you or your employer while you are at work.
- If the post-dated check you give to the lender gets dishonored because of insufficient funds in your bank account, the lender cannot bring criminal charges of any kind against you. Lending companies are strictly prohibited from threatening their borrowers.
- There is a maximum of 10 weeks of rollover on a loan balance after the default allowed by the Utah payday loans laws (that is from the date when the loan was initially issued). A due date extension of up to 10 weeks can be given. During that time, you will be charged at the same APR. After this 10-week period, no further interest can be charged.
- The phone number of a person with authority (from the lending company) must be included in the loan contract. This lets borrowers file their complaints (if there are any). The borrowers can also contact the Department of Financial Institutions.
- In the loan contract, there must be clear explanation of the schedule of fees and other finance charges, including the dollar amount of the fees and the annual percentage rate
Actions lenders may take on non-payment of debt
If you default on your loan, Utah payday loans laws allow lenders to take some action against you:
- They can make it difficult for you to get credit in the future by listing all your accounts in default to various credit bureaus.
- They can charge at least $20 in the form of NSF fee (Non-sufficient fee).
- They can also file a civil suit against you and seek judgment from the court. If the judgment of the court is against you, the lending company may be allowed to recover reasonable attorneys fees and other court costs from you. Adding to that, the court can also order you to pay up the outstanding balance at the federal rate plus an additional 2%. The current federal rate is 2.99% per annum.
Cities offering payday loans in Utah
- West Valley City
- West Jordan
- St. George