Ogden, Utah, caps number of payday lenders

Ogden Utah

Ogden, Utah, has capped the number of short-term lenders allowed within city limits. Image from Flickr.

A ordinance passed by the city council of Ogden, Utah, on Tuesday puts a restriction on the number of payday lenders, title lenders and check-cashing companies allowed in the city. This new ordinance is not as stringent as the Ogden Planning Commission recommended. Current payday lenders in Ogden will not be affected.

Ogden, Utah, payday lending ordinance

The ordinance the council passed Tuesday limits the number of in-city, short-term-loan businesses to 15. This ordinance will affect payday lenders, title lenders, check-cashing companies and short-term loans companies. These businesses will also not be allowed to open “within 1,000 feet of a similar business or within 660 feet of a pawnbroker or sexually oriented business.” Finally, all businesses will be required to display a sign explaining that short term loans should not be used as a general 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 businesses

Currently, within Ogden, 21 businesses fall under the ordinance. The new ordinance will not require any of these businesses to close. Instead, no new short-term loan businesses will be able to open until the number drops below the 15-store threshold. Any new stores that open under while this ordinance is in effect will be required to fulfill the placement and signage requirements.

Arguments regarding payday lenders in Ogden

There was heated argument within the Ogden City Council before the new ordinance was passed. The Ogden Planning Commission had recommended the number of lenders be capped at eight. 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, payday lending customers and council members point out that the service payday lenders provide can be very useful for residents living paycheck-to-paycheck, and that not being tied to a traditional bank can sometimes be a positive thing.

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