In 1999, a number of payday lenders organized the Utah Consumer Lending Association (“UCLA”). This entity was created as a trade association for those companies who provided payday loans, check-cashing loans and other methods of deferred deposit credit without collateral. The original purpose of the organization was to work with legislators and the Department of Financial Institutions to create fair, consumer friendly regulations. As a result, the Utah Check Cashing Act was enacted that provided a number of important consumer protections. These include the following: limit of 12 weeks after which interest cannot be applied on a payday loan; open display of the interest rate and telephone number for DFI; annual audits and exams to insure compliance with federal and state laws.

Over the years, UCLA has developed a healthy pattern of meeting on a regular basis with the DFI to determine any problems in the regulation of payday lenders. UCLA works with DFI to insure compliance by payday lenders. On occasion, the Association and the DFI request the Legislature to impose additional regulations.

Principles

Membership in UCLA is voluntary.  UCLA members agree that they will adhere to a series of consumer friendly principles in the extension of credit, entitled "Best Practices".  The DFI Commissioner has lauded the goals and principles contained in these Best Practices as an important element in helping consumers with financial difficulties.  It is imperative to UCLA that consumers are treated in an honest and fair manner and every effort is made to ensure their experience with payday lending is positive and beneficial.  UCLA is dedicated to protecting consumer choice in financial matters.

Consumer Education

UCLA members and the DFI Commissioner have developed a brochure that is placed in every payday lending operation in the state (regardless of whether the owner is a member of UCLA).  This brochure will explain the ramifications of obtaining a payday loan and the need to repay the loan as soon as possible.  Members of the UCL want consumers to be well-informed when making short-term financial decisions.

Protecting the Consumer