The city council of Ogden, Utah passed an ordinance that puts severe restrictions on title lenders, personal loan companies, and check-cashing companies. The proposal that was eventually passed was about twice as liberal as the Ogden Planning Commission had recommended. Current personal loan company in Ogden will not be affected.
The personal loan company ordinance in Ogden, Utah
The ordinance the council passed Tuesday limits the number of in-city, short-term-loan companies to 15. The ordinance will affect all unsecured personal loans companies, including check-cashing and title lenders. Any new short-term loan business will not be allowed to open up “within 1,000 feet of a comparable business or within 660 feet of a pawnbroker or sexually oriented business.” All businesses will also be required to have a sign that warns customers that short-term loans are not a long-term financial strategy. Other provisions of the ordinance were removed before it was passed, including a limitation on the color schemes on the exterior of buildings.
Effect on current payday lending companies
Currently, within Ogden, 21 companies fall under the ordinance. The businesses currently operating in Ogden will not have to close. Instead, there could be a threshold of fifteen, and no new stores can be able to open up until that threshold has been dropped below. Any new stores that open under while this ordinance is in effect will be required to fulfill the placement and signage requirements.
Arguments concerning payday lenders in Ogden
The Ogden City Council had a very heated debate over the new ordinance. The original recommendation of the Ogden Planning Commission. Some members of the Ogden City Council believe that these businesses “disconnect residents from traditional banks,” which they believe harms economic development. On the other hand, numerous payday loans no fax customers do not qualify for services at traditional banks, and therefore need financial services of some kind.
