by Leah Willis
On Tuesday, January 29, the S.J. Quinney College of Law will host Utah State Attorney General Mark Shurtleff for the 24th Annual Jefferson B. Fordham Debate. Focusing on usury, or excessively high interest, this year’s resolution is: “Consumer loans carrying interest and fees that amount to annual percentage rates over 36 percent, such as those often made by credit card companies and payday lenders, shall be prohibited.”
Quinney College professor and former U.S. Bankruptcy Judge Ralph Mabey will moderate. General Shurtleff will take the negative position against the Quinney College’s own visiting law professor and usury law expert, Chris Peterson. (Peterson will return at the end of the academic year to his position as Associate Professor of Law at the University of Florida Levin College of Law.)
Debate organizers express delight that one of the college’s most outstanding alumni, Attorney General Shurtleff, has agreed to participate in the debate. As Utah’s highest-ranking law enforcement officer, General Shurtleff carries significant responsibility with respect to consumer protection of Utah citizens.
General Shurtleff explains his interest in the event and the issue at hand: “Professor Jefferson Fordham’s entire distinguished career was dedicated to the advancement of law and justice, and in particular the protection of individual rights, civil liberties, and racial equality. As Utah Attorney General, in an effort to follow the sterling example of such notable legal professionals as Professor Fordham, I have made the establishment of justice my primary focus, and have for the past two years co-chaired the Civil Rights Subcommittee of the National Association of Attorneys General.”
Shurtleff continues, “The annual debate held in Professor Fordham’s honor has gained a national reputation for addressing the relevant and controversial issues of our time. This year is no different, as we focus on the growing socio-economic divide and the proper role of government, the rule of law, and the free market in providing for and protecting the financial needs and interests of our citizens.”
According to some experts, usury laws seem to have the greatest impact on low- and middle-income borrowers, as they are more likely to apply for and be approved by credit card companies with comparatively high interest rates and fees. Likewise, financially vulnerable populations utilize payday lending services more often than those with moderate or high income. Peterson summarizes: “I am fascinated by usury law because it stands at a nexus between poverty and finance.”
Peterson’s passion for interest reform is evidenced by his recent scholarship. In 2005 Peterson co-authored a study that illuminated in no uncertain terms the “targeting” of military consumers by payday loan vendors. The study was cited in a Pentagon report that led to the passing of a bill including a provision (effective October 2007) to protect military personnel and their families from what critics call “predatory lending.” Payday lending interest rates that typically exceeded 300 percent APR are now capped at 36 percent for service members and their spouses. For ordinary citizens, however, the federal government offers no such protection.