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Show DAILY Friday, January 18. 2008 AS HERALD DIMM H EDITORIAL BOARD Craig Dennis, President & Publisher Randy Wright. Executive Editor Jim Tynen, Editorial Page Editor HERALD POLL Curb payday predators It's way past time for Utah to rein in "payday" loans, which prey on those least able to defend themselves. A year ago we urged passage of a 36 percent interest cap on such loans, but it hasn't been enacted yet. A payday lender typically makes loans against a recipient's upcoming paycheck, hence the name. A typical charge is $15 per $100 loaned - for two weeks. To many borrowers, that doesn't sound too bad. But on an annual basis it's 391 percent.The typi-cal payday borrower can end up paying $793 for a $325 loan. If repayment is late, fees and collection charges can bump the total annual rate to around 500 percent. Last year we said that was loan shark territory. We stand corrected: we have since heard that back in the Mafia's heyday underworld loan sharks charged only 250 percent. It is astonishing that almost nothing in Utah law curbs this outrageous practice. Years ago lawmakers ended the ban on usury and opened the door to interest rates. Last year the Legislature passed a minor reform authorizing fines against lenders who fail to register or otherwise violate the few regulations the state imposes. A bill to take stronger action limiting the number of loans allowable to a person at a single outlet, capping the loan total and banning other outlandish practices died in committee. Sadly, the people most often hurt by these practices are working people who have limited resources. They earn a paycheck, but a medical bill or car repair can put them under financial stress. Some of these folks may have a faulty understanding of economics, but if that were a crime, much of the staff of the New York Times and many members of Congress would be in jail, so we don't see why ordinary working Utahns should suffer. Besides, it is the naive who are most in need of protection from abuse. We should avoid stereotyping those victimized by payday loan services, however. The AARP reports, for instance, that senior citizens who are still working sometimes are taken in by the sales pitches of the lenders of which there are many in Utah. There are so many dotting the state landscape, in fact, that one might assume they are benign. Reportedly, the state is home to well over 400 payday lending outlets more than the number of McDonald's, Burger King and Wendy's outlets combined. Utah County has at least its share. State figures say there are about three dozen total in Provo and Orem, and more in other towns in the county. Critics say harsh lending practices drive people into debt and bankruptcy. Consider one telling statistic that hints at the havoc the lenders create. Utah AARP asked court officials to find out how many collections cases in small claims court were brought by the more prominent payday lending firms. Of 17,600 collection cases studied, 7,521 had been brought by these large payday lending firms. One firm alone had 3,883 of sky-hig- h -- What do you think? Should the state more strictly regulate payday lend- ing? Send your comments to dhpollsheraldextra.com or call Please leave your namef hometown and phone number with your comments. comments should not exceed 100. 'words'; vbicemail comments should be no longer than 30 seconds. Anonymous and 344-294- ; unverifiable responses will not be published. You can also comment online at heraldextra.com, under the "Polls" tab. The Daily Herald will publish comments on Sunday, Jan. 27. the cases. Smaller firms undoubtedly have also ensnared people in collections cases. Under criticism across the the payday loan industry has mounted a $10 million public relations campaign. Defenders say the loan amounts are not excessive, ' considering the work involved; that the loans provide a needed service; and that the stores would go out of business if caps were imposed. Some legitimate bankna-tio- GUEST OPINION ers fear that a cap on the payday loans would lead to a cap on other emo to: Republican candidates of all stripes From: A Subject: How to Win Again As Republican primary and caucus voters conspire to deny the party a front-runnone state for you, another for you, and a third for the other guy some observers have speculated that the party doesn't quite know its own identity. Among "party regulars, the lament has gone up to Heaven, "Why can't anyone simply propound a Reaganite agenda and unite us?" A fascinating new book, "Comeback," by former George W. Bush speechwriter David Frum, offers what may seem to some a startling answer: Drop Reagan. He is no longer relevant to the challenges we face as a party or a nation. He was perfect for his time. But that time has passed. When Ronald Reagan ran in 1980, the top marginal tax rate was 70 percent. Inflation was eroding the purchasing power of consumers. Overregulation strangled businesses. One out of every three households had been victimized by crime within the previous 12 months. The Soviet Union had added 12 new countries to the communist domain in the previous decade. American hostages in the tax code so steeply progressive that most Americans pay very little income tax (the payroll tax is another matter), and 29 million income earners no longer pay any income tax at all. The top 1 percent of taxpayers of total now pays more than taxes. Alas, Frum writes, "The top 1 percent may make a disproportionate amount of money. But they still cast only 1 percent of the votes." Is it therefore surprising that poll after poll find Americans less interested in and more concerned about deficit reduction? The story is similar regarding the other issues that made Reaganism so compelling. Inflation was painfully wrung from the economy in '82 and '83. The Soviet Union was brought low. Crime has dropped to levels not seen since the 1960s. Bipartisan efforts have reduced regulation. Welfare reform was finally accomplished in 1996. But it wasn't just the triumph of conservative solutions that left the Repub-- . lican Party without a unifying theme; it was also the conduct of Republicans in power. Complacency, corruption and lack of imagination have combined to undermine the Republican brand. Political parties are often slow to adapt to changing circumstances. Republicans were waving the bloody Tehran were paraded on international shirt years after the Civil War had television. Welfare rolls were expandended, and Democrats attempted to run against Herbert Hoover decades ing. Reagan's reform package spoke to those issues. He favored tax cuts, after the Great Depression. That's where whip-smaintellectuals like deregulation, welfare reform, stricter law enforcement, tight money and a Frum come in. He picks off sloppy conservative thinking like a sniper and strong national defense. So are conservatives victims of their serves as a pathfinder in the compliown success? To a point, yes. Two decated world we will soon confront. cades of steady reductions have made The reforms he proposes are too loans. We take a back seat to no one in defending free enterprise. But payday lending ought to be more than capped; it ought to be banned. Without a crutch, maybe people would get serious about managing their money. Payday loans interest rates are ruinous, and in thousands of cases cause more problems than theysolve. If a business can survive only by people preying on who aren't familiar with economics, it doesn't deserve to survive. Protecting the free enterprise system includes curbing abuses of it. Those bankers worried that the Legislature will start capping legitimate interest rates should think about a more likely threat. Right now mainstream lending institutions are being battered by criticism, and payday lenders do nothing but further besmirch the industry's image. This is no time to coddle the most troublesome branch of a business sector. Eleven states have interest-rat- e limits on payday loans, and at least 10 more are considering similar limits, experts say. Congress imposed a 36 percent annual cap on loans to military service members following reports that thousands were in debt to payday lenders. That an industry would target the men and women who protect our country dissolves the last smidgen of sympathy we may have had for it. Utah should join this trend and act now to curb these excesses. well-wish- er hard-workin- g rt There are other reforms that have been suggested, but a 36 percent annual cap on such loans is the most direct, and would be in line with a growing trend in other states. Let's not let another year pass in which payday predators throw the lives of thousands of for-hi- Fax to 1 CW FRIENDS sow pew 1 ,14. "1 rr5 I I 1. 1 . Provo, UT 84603. may be edited for length. I Writers are encouraged to include their occupation and other personal information. I Because of the volume of letters, we cannot acknowledge unpublished letters. I Letters become the property of the Daily Herald. Garry Trudeau MALLARD FILLMORE n ..J"'.. V f 5 I Letters must include the author's full name, address and daytime phone number. I We prefer shorter letters, 100 to 200 words. Letters example, Hillary Clinton. Barack Obama's supporters, alert to any suggestion that while he talks a good game his record of accomplishment is rather sparse, shot back that the New York senator had dishonored the memory of King by minimizing his role in the passage of that landmark law. kcu. 344-298- Mail to P.O. Box 717, It sage of the Civil Rights Act of 1964. The implication was that to implement lofty ideals requires a seasoned political hand like, for D00NESBURY I Mona Charen writes for Creators Syndicate. letters to dhlettersheraldextra.com Hopefuls cling to King's mantle ust in time s birthday and his national holiday, the Rev. Martin Luther King Jr. made an unexpected appearance in the presidential campaign.. Just before the New Hampshire primary, eventual winner Hillary Rodham Clinton observed that it was President Lyndon Johnson who realized King's dream of racial equality by winning pas sixty-seven- Reform the nation's scandalous prisons. Conservatives put all those people behind bars to make the rest of us safe, Frum argues, but it is intolerable that there are 240,000 prison rapes yearly (compared with 90,000 rapes in the larger society). Revive conservation and create "green conservatism." Negotiate with Iran, sure, but resolve to deny nuclear weapons to them, whatever it takes. Limit immigration to the skilled, and close our doors to radical Islamists, even if they have Ph.D.s. "Comeback" rockets along at a brisk pace and covers an incredible amount of ground in just 178 pages. No one will agree with every single proposal. But the kind of fresh thinking David Frum has displayed here is just what the doctor ordered even if the patient may not yet know he's sick. How to comment Utahns to the wind. MEDIA VOICES From Scripps Howard News Service, Thursday, Jan. 17, 2008: one-thir- d numerous to summarize here. A taste will have to suffice until you reach your bookstore: A carbon tax. That's right. Tp discourage the use of gas and oil and to fund more tax breaks for young families. Cut the inheritance, corporate, capital gains and dividend taxes to zero to encourage wealth creation. Modify an idea from Bill Clinton and permit "USA accounts" within Social Security that would permit even minimum wage workers to save a small fortune. Frum runs the numbers: "That should be our conservative and Republican promise to American workers: 'Every Ameri" !' can a millionaire by age FWOUt I ooion SiW III I I Bruce Tinsley S WV$ IJ.I . CUK Witt.' mw&v www- - rmw |