Like many other states, Utah recently put some important protections into place to help protect consumers that take out payday loans. One of these requirements offers lenders the ability to offer extended repayment plans. This option, which includes zero-interest repayment for borrowers, was put into law because of outcries from an organization that demands more time for people to repay their loans. Some believe that this requirement helps borrowers to get more value from payday cash advance loans.

An organization called the Community Financial Services Association of America (CFSA), an organization that strives to offer best practices for short term lenders, has lauded this Utah law. This law gives borrowers lots of time to repay their loans, without forcing borrowers to pay higher fees to get an extension on their loans. This flies in the face of some media reports that demonize payday lending companies in the state of Utah, and even the consumers these lenders provide services for. In fact, one article went so far as to list the number or people who have enrolled for extended loan repayment plans. However, when one looks at the facts, there are only about 7 percent of borrowers who do not pay back their loans on the original loan repayment date.

To make a long story short, the number of payday loan borrowers who default on their loans is not as high as some people might lead you to believe. The data provided above is a clear cut example of what we are talking about here. There is even evidence that consumers thrive when they are offered additional loan options, like the extended repayment terms. It is also true that in Utah, payday loan borrowers cannot be legally described as being in “default” on a loan. This helps borrowers to avoid having their credit scores damaged.

The Consumer Financial Protection Bureau released a report that showed that over half of payday loan borrowers took out only one or no additional loans after they repaid their original short term loan. Data obtained from the Utah Department of Financial Institutions proved that in 2014, just nine percent of complaints registered were related to payday loans. Another national study showed that only 1.5 percent of complaints received by the CFPB were related to the payday lending industry.

People take out payday loans, most of the time, when they are in difficult financial situations. These loans are typically repaid within just two weeks, and they provide some much needed financial “breathing space” for people that are short on cash in between pay periods at their jobs. Taking into account that borrowers must be employed and have bank accounts in order to take out payday loans, the assumption must be that the vast majority of payday lending customers are financially responsible consumers who only need small amounts of cash to cover emergency expenses.

According to another study, 96 percent of payday loan customers said that they had good experiences with regards to the terms and fees associated with payday loans. Additionally, nine out of ten borrowers said that they always weigh the pros and cons of these loans prior to taking one out.

The data from Utah, and all over the country, flies in the face of the bad news that seemingly always gets reported about payday loans, lending companies and even the people who take out these types of loans. Government groups, like the CFPB need to do their due diligence and look at this kind of data prior to making any efforts to mandate federal regulations that might damage this financial industry.