Arizona looking for alternative models

Arizona lenders are trying to find an alternative product.  This would resemble a product that we see in Ohio.

This is what I thought was interesting about the lender’s strategy:

“They also are using a procedural maneuver of a “strike-everything” amendment that will be considered Wednesday by the Senate Finance Committee. That would strip the new language onto an unrelated bill which already has been approved by the House.

That means just a single public hearing on the issue: If the committee approves, the bill goes to the full Senate and then back to the House to concur with the changes, with no need for an additional hearing there.”

If the lenders can get a few concessions, here is what they stand to make:

“borrowing $500 for two months, with a payment at the end of each month, would have to pay $37.50 for the origination fee, another $22.62 in interest plus the $10 document preparation fee, for total charges $70.12.”

My calculations are closer to $73.72.  Here’s what the TILA box would look like:


The cost of your credit as a yearly rate.
115.4002 %

The dollar amount the credit will cost you.
$ 73.32
Amount Financed
The amount of credit provided to you or on
your behalf.
$ 500.00
Total of Payments
The amount you will have paid after you have made all payments as scheduled.
$ 573.32

Payment Schedule: One payment of $285.66 is due on 5/3/2010. 

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