Arizona vote is in November

The November vote in Arizona is coming up. Here is what the ballot will look like based on Judy Hedding’s blog:

Will you vote in favor of Proposition 200?

1. Yes, we need to continue to offer these financing options to our citizens while more closely regulating the industry. People should be able to make their own financial decisions.
2. No, payday loan businesses are predatory lenders that exploit the financial hardship of people with limited resources. We don’t need them.

A “Yes” vote endorses the payday lending site and a “No” vote gets rid of payday lending.

In other news, “Attorney General Terry Goddard said he usually steers clear of publicly picking sides on a ballot measure, but he’s changing course when it comes to a proposition pushed by payday lenders.” Goddard also went on to say that “payday lenders “trap” Arizonans into expensive short-term loans.”

What Goddard fails to recognize is that the regulation supported by the payday loan industry is designed to keep people out of the debt cycle.

It also offers many other protections like: the rate would be capped at 391 percent, and it would prohibit costly loan extensions and require the state to create a database so lenders could ensure that prospective borrowers had no outstanding debts with other payday lenders.

Let’s be honest, the state database is not working everywhere and lenders offer other loan products that fall outside the statute.

In return, it also removes a provision in state law that would essentially eliminate the industry in 2010. This provision would cap rates at 36%.