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Some days, the calls started coming in at 6:30 in the morning, and Elisha Callahand says her phone often kept ringing well into the evening.

The single mom from Ogden knew that when she answered, the payday lenders at the other end would demand money she didn’t have. That they wouldn’t listen when she tried to negotiate lower payments or to explain that giving them what they wanted would leave her without grocery money.

“They talk to you like you’re less than human,” she said.

Callahand always recognized that she needed to pay back the high-interest loan she took out a couple of years ago, as she recalls, for some car repairs. But it was the early days of the pandemic, and the food service distributor where she worked had halved her hours after the coronavirus stalled much of its business.

Between the ballooning interest on the payday loan and a few other debts, Callahand felt trapped in a financial pit with no way to crawl out. She found herself bursting into tears for no apparent reason, she said, and suicidal thoughts started creeping into her mind.

At the time, she had no idea the payday lender bearing down on her — by suing her and fighting to garnish her already diminished wages — was doing business with an assist from a federal COVID-19 bailout.

Months later, Callahand said she’s in a much better place. She’s declared bankruptcy to clear some of her debts, gotten a new job at Home Depot and expects that for the first time in ages, she’ll be able to save a bit of her next paycheck.

Still, reflecting on last year’s hardships, it makes her furious to think that the parent company for her lender, 1st Choice Money Center, reaped $480,000 in federal Paycheck Protection Program (PPP) funding in 2020. The company didn’t respond to interview requests.

“It’s insulting to know they got that and they got help, but they weren’t willing to help us,” she said. “Instead of them giving a little bit of leeway and working with human beings, it was basically like, ‘That’s not my problem.’”

In theory, federal PPP bailouts were supposed to prop up small businesses and their workers, keeping restaurants alive while the pandemic was emptying out their dining rooms and stores afloat even though their customers had vanished.

But a review by The Salt Lake Tribune shows that dozens of in-state collection agencies and high-interest lenders also captured millions — even though some of them were making pandemic survival more difficult for the very people the PPP loans were meant to help. Court records show that even through the worst periods of 2020, some lenders and debt collectors continued to take Utahns to court and garnish the wages of the essential and hourly workers who were bearing the brunt of the pandemic-induced turmoil.

Among the lending companies that are members of the Utah Consumer Lending Association (UCLA), most stopped suing people last year as COVID-19 was wreaking havoc on the economy, the association said.

In a prepared statement, the UCLA also pointed out that many businesses, including The Salt Lake Tribune, received PPP funds during the pandemic — and that the money helped protect jobs through the tumultuous period.

“The lenders who received paycheck protection program loans were able to keep their doors open, provide income to their employees, and offer necessary services, such as lending and check cashing, to essential workers when other financial institutions closed their lobbies,” the statement continued.

And after getting a break from the government in the form of PPP loans, many of their lenders tried to extend understanding to their customers by offering interest-free extended payment plans, working with them to reduce payment amounts, delaying payment arrangements and giving deeply discounted settlements, according to the statement.

Howard Headlee, president of the Utah Bankers Association, said the federal COVID-19 aid program aimed to deliver a swift infusion of cash to struggling employers, regardless of their business model. The financial institutions that helped dole out the loans played their part without judgment, he said.

“It wasn’t our role to discriminate as to which businesses and which jobs would be saved,” he said.

High-interest lenders and debt collectors across the nation reaped more than $580 million in coronavirus assistance, according to an analysis published in January by the Washington Post. But aiding these companies could be a particularly sore point in Utah, where the absence of regulations has enabled soaring interest rates that can quickly bury cash-strapped families under a mountain of debt.

Chris Peterson, a University of Utah law professor and expert on consumer protection issues, said a 2015 poll showed a majority of Utahns want to place guardrails on the state’s “virulent, high-cost lending industry.”

“That makes the fact that our federal tax dollars are going to prop up predatory businesses that are hurting struggling families troubling,” he said.

‘Chaos ensued’

At least $3 million in PPP money went to 28 payday or title lenders that do business in Utah in 2020, some of them pawn shops or other types of retailers that also offer high-interest loans, The Tribune’s review found.

And records show that several of these companies kept suing borrowers over unpaid debts during the pandemic. They garnished the wages of workers at grocery stores and Walmarts and of people with jobs in food and hospitality, industries that had to slash employee hours or cut staff to cope with plummeting business.

But the statement from the lender association said its members “rarely and reluctantly” turn to the court system to compel payment and instead focus on “working with borrowers to help them repay their loan through scheduled payments attuned to their specific circumstances.”

They did that even though the economic impacts of the pandemic “significantly reduced loan volume” in the industry, the group said.

Those hardships didn’t extend in the same way to some of the nation’s largest payday businesses, according to a Bloomberg report, which found that these businesses actually posted record profits during the public health crisis, as borrowers spent their federal stimulus checks to pay down debt.

And the accommodations described by the lending association weren’t felt by borrowers such as Jessica, a teacher from Murray who needed cash in the spring of 2019 so she could complete a master’s program for her school.

Her credit wasn’t stellar, so she decided to take out a modest payday loan — expecting that she’d have no trouble repaying it when her next check came in. But in a matter of weeks, her employer, American International School of Utah, closed its doors, and she was suddenly out of a job.

“Everything changed,” said Jessica, 38, who asked to be identified only by her first name because she didn’t want her current employer to learn of her financial struggles. “Chaos ensued.”

She was able to find a new teaching job later that year, but it wasn’t long before COVID-19 dried up her husband’s contracting business and her father moved in from Florida after his work at a resort evaporated. The whole family — including two young children — was essentially subsisting on her teaching salary, she said.

By that time, the amount she owed the payday lender had ballooned. The lender took her to court in April 2020 and won the right to garnish hundreds of dollars from each of her paychecks from later that year through early 2021. She paid back more than $2,000 on the initial loan of about $600.

Jessica said her family didn’t have a Christmas. They fell behind on their mortgage and power bills and had their internet shut off multiple times, even though WiFi was critical for her job.

“One day, it was like I was in my car, basically trying to give my class their lesson via the public WiFi,” she said. “It was just a nightmare.”

Her household still hasn’t bounced back from the financial crisis, she said. So it felt like a “slap in the face” to hear that payday lenders got federal loans even as they kept trying to extract cash from struggling families like hers.

“It’s hard to think that, wow, the big business continues to get whatever they need whenever they need it,” she said. “And the individual is the victim.”

‘Bring back the regulations’

Those who view payday lenders as predatory note that customers of these businesses are usually in financial trouble and desperate for quick cash to avoid eviction or solve another urgent problem.

But the interest often attached to these loans only increases the burden on these borrowers, leaving them with less money to pay future bills and pushing them deeper into poverty, said Bill Tibbitts, an anti-poverty advocate and associate director at the nonprofit Crossroads Urban Center.

“We end up seeing people in our food pantry who need help with food, who need help paying for other things,” he said. “Because they ... made a decision that helped get through one month and made the next month even harder to get through.”

That’s particularly true in Utah, where payday lenders charge dizzyingly high interest rates.

While many states impose interest rate caps, Utah is among those that put no defined limit on payday loan rates and simply prohibits them from reaching “unconscionable” levels. Without any legal ceiling to contain them, Utah’s average annual interest rates for payday and title loans have surged past 554% and a recent study ranks them the second-highest in the nation.

This average annual interest only went up during the pandemic, although the UCLA was unaware of any lender in its membership who hiked its rates over that period. Instead, the association’s statement attributed that increase to the fact that consumers have been borrowing smaller, shorter-term loans, causing the annual percentage rates to increase slightly for lenders who charge a fixed fee.

In Headlee’s view, interest rates are a reflection of the lending risk and capping them would cut off credit access for some people. The best way to combat unfair interest rates is to promote robust competition between lenders, he said.

“In Utah, we have enormous amounts of competition,” he said. “So I just encourage people to shop, to search and to compete. And if somebody is charging an unfair interest rate, they should just go out of business.”

Though polling has indicated public support for reforming Utah’s payday lending industry, there has been little political momentum on the state’s Capitol Hill for rate caps.

Tibbitts said he’s now looking to the federal government to rein in lenders, especially now that officials have channeled PPP loans toward them.

Former President Barack Obama made an unsuccessful attempt to do just that, proposing rules that would protect the most vulnerable borrowers. The regulations were rolled back in 2019 under then-President Donald Trump and never actually took effect, Tibbitts notes.

“If the federal government helped that industry survive,” he said, “now’s a good time for the Biden administration to bring back the federal regulations.”

A struggle just to eat

Debt collectors in Utah appeared to benefit from PPP even more than the payday lenders, with The Tribune’s review identifying 17 companies that collectively drew $7.6 million in 2020.

Still, nearly 43,000 debt collection cases were filed in Utah from March to December 2020 — just a 14% dip compared to the same period during the prior year, according to state court officials.

A spokesperson for the Utah Association of Collectors, which advocates for the industry, didn’t respond to multiple interview requests from The Tribune.

Court records show that in many cases, these companies were pursuing people for unpaid medical and dental debt or ambulance fees. Bonneville Collections, which got the most PPP money of any Utah-based lender with $1.1 million in loans last year, took hundreds of people to court in 2020 — including a woman who couldn’t afford her behavioral health care bill and another who couldn’t fully cover the cost of her pet’s treatment at an animal hospital.

Many of these collectors also have racked up dozens of consumer complaints to the Consumer Financial Protection Bureau, with people describing harassing phone calls and lack of notice about legal action taken against them.

Several people mentioned in the complaints that they were already under financial duress because of the pandemic and wondered how it was ethical to sue people during such hard times.

“I am not able to be employed as I am on the [Centers for Disease Control and Prevention] list of vulnerable populations right now,” wrote one person. “But yet here I am, at the (law office?) that’s suing me, miles from home, outside, begging for proof of a recent debt, during open hours, so I can reply to a summons.”

Another complaint was from someone whose wages were being garnished during the public health crisis.

“[T]his should be illegal and not to mention it’s a pandemic so it’s a struggle right now just to eat,” the person wrote. “Talk about taking advantage during this pandemic.”

Matthew Entwistle describes feeling “handcuffed” by debt collectors. The Syracuse father of four spent pandemic months worrying about losing part of his take-home pay to Bonneville Collections, as the collector sought to garnish his wages for medical debt.

“We’re already considered lower middle class in Utah,” he said. “[The wage garnishment] would push us down below the poverty line for the next six months.”

Entwistle, 39, fell into debt during a quick sequence of personal catastrophes: He nearly lost his arm during a car crash and was so heavily medicated in the aftermath that he spent about a month unable to work. Then came a back injury and a subsequent surgery. And in the middle of COVID-19, his wife gave birth to the couple’s fourth child.

Once they got back on their feet, the couple started making regular payments to clear the debt — and Entwistle even wanted to erase all of it in a single payment that would give the company “the proverbial middle finger.” But earlier this year, he said, the collector stopped automatically deducting his regular monthly payment and took him to court, claiming he was failing to meet his monthly obligations and seeking to garnish his wages.

Feeling unfairly taken to task during the coronavirus crisis, he wasn’t excited to learn that Bonneville Collections had gotten a break in the form of federal business bailouts.

“It makes me think of the old Biblical parable of the indentured servant who has a debt [canceled] and doesn’t pay it forward,” he said. “Basically, they’re not at all interested in paying forward the compassion that they receive from the government.”

This story was completed with information from Reveal’s Reporting Networks. revealnews.org/network