FILE: 3 out of 5 money lenders face negative consequences. (Stock image, Canva)
SALT LAKE CITY — Seven states in the U.S. don’t have caps on interest rates for loans. Utah is one of them.
Recently USA Today scrutinized several Utah banks for unethical practices associated with high rates.
Finwise President and CEO Kent Landvatter, said these high-rate loans are designed to help people who don’t qualify for typical loans.
“I think the general misunderstanding seems to be if there are rate caps then it will solve the problem but we feel the opposite,” said Landvatter.
FinWise, Capital Community, and First Electronic banks have all been featured by USA today saying they are being “predatory” with their loan practices,
Landvatter said the loans they’re being criticized for are a federally regulated option instead of forcing people into payday loans.
“Giving someone something that is a third of the cost of a payday loan that is federally regulated and if they pay it well is reported to the credit bureau… I think there is upsides there,” said Landvatter.
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A previous version of this story incorrectly attached a photo of a Bank of Utah location to the article. We sincerely apologize for the error.