Business Ethics Fortnight "More Fun than Decent People Think Should Be Legal"

Utah Valley State College

Team Members: Ross Erickson, Rulon Fullmer, Kara Haney-North, Camille Howard, Tracy Sorensen

Advisor: Brent Eagar

Topic/Audience: Payday Lending

Executive Summary

There has been a significant upsurge of interest in the payday lending (deferred presentment) industry. It is an industry in its infancy, relatively speaking. There is very little published empirical information on consumer awareness, attitudes, understanding and usage of this product. Most non-proprietary reports have been secondary analysis of existing data, or anecdotal.

The marketplace has grown accustomed to convenience and immediate service in most services it obtains. Banks are out of the short-term loan business. There is an evident demand for this type of loan. Indeed, there are 135 different payday lending institutions in Utah with 500+ locations.

We are taking the position of an organization interested in building consumer confidence in and assuring the success of the industry in Utah as it attempts to meet the needs of deserving consumers, many of whom do not have access to traditional sources of funds. Our focus is on the state of Utah. We are presenting to the Utah State Legislature steps that could proactively be taken to stem unethical practices by a few rogue firms that harm some consumers. Our aim is to protect the industry in Utah as well as assure that no harm is done to its customers.