A Utah lawmaker has proposed a bill to stop high-interest lenders from seizing bail money from borrowers who don’t repay their loans. The bill, introduced in the state’s House of Representatives this week, came in response to a ProPublica investigation in December. The article revealed that payday lenders and other high-interest loan companies routinely sue borrowers in Utah’s small claims courts and take the bail money of those who are arrested, and sometimes jailed, for missing a hearing.
Cecila Avila was finishing a work shift at a Walmart. David Gordon was at church. Darrell Reese was watching his granddaughter at home. Jessica Albritton had pulled into the parking lot at her job, where she packed and shipped bike parts.
In mid-March, the payday lending industry held its annual convention at the Trump National Doral hotel outside Miami. Payday lenders offer loans on the order of a few hundred dollars, typically to low-income borrowers, who have to pay them back in a matter of weeks. The industry has long been reviled by critics for charging stratospheric interest rates — typically 400% on an annual basis — that leave customers trapped in cycles of debt.