Category: Arizona

  • 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%.

  • Arizona still polarized

    Both sides make very good arguments. On one hand, it’s a tough world. On the other hand, people should have the freedom to choose.

    Stan Barnes makes some good arguments in this opinion in the Arizona Daily Star, especially this comment:

    “Every day it seems another self- appointed know-it-all with an ax to grind is in the news, blaming payday lending for all of society’s ills and demanding the industry be run out of town before every one of us is beguiled into bankruptcy.”

    The truth is that everytime someone takes out a payday loan, they say “Yes”. Everytime they don’t take one out, they say “No”.

    People fail to recognize that there are rules in place and these places are regulated.

    Where I think the industry gets in trouble is that they claim they’re saving people from paying nsf fees, but when the borrower doesn’t pay, they deposit their check. If it bounces, the consumer ends up paying the interest and the nsf fee that they tried to avoid in the first place. There is also post maturity interest and late fees. Sometimes the borrower gets more than they bargained for.

    In the industries defense, there are way too many people not paying loans back. There needs to be a healthier medium.

  • Older post, but still relevant for Arizona

    You can read the newspapers, but it’s hard to understand the underlying story, especially when it relates to politics and legislating. This blog post gives some pretty good insight to the ballot initiative in Arizona.

    It’s anti-payday lending, but it’s a good read.

  • Payday Lenders Get on the Arizona Ballot

    Arizonans for Financial Reform received its qualifying notice Friday. In order to make it onto the ballot, they needed 153,365 signatures.

    The payday loan industry is trying to remove a drop dead date of 2010 for payday loan reform.

    I guess it’s in the voters hands now. I wonder how it will display on the ballot? Nobody likes it when you take away their options.

  • Are City Zoning Laws Becoming a Trend?

    Not municipalities are getting involved in payday lending regulation. Casa Grande in Arizona is trying to change their zoning laws to limit payday loan stores to establish distance requirements for payday loan stores.

    The article also goes on to state, “the city cannot pass laws that would put an operation out of business just because it is not wanted there. Any change to the zoning laws would affect only new payday loan stores. The hope is to control their proliferation, given that more and more of the stores have been popping up.”

    This is worth noting because we’re seeing it more and more around the country. For example, in Peoria, Illinois that is trying to pass a 180 day moratorium on new building permits for payday loan companies.

    Many critics like to blame payday loan stores for hurting real estate in an area. Personally, I think it would be deceptive to control what people see and don’t see, when it’s legal to give a payday loan.

    Less competition can only hurt the consumer and help the lenders that are already in place.

  • The Deep Pockets of the Payday Loan Industry

    The Arizona Republic wrote an article titled “Where the money comes from“. According to this article, payday lenders contributed $8.7m to campaign finance for the first half of 2008. The next largest donor was The Realtors Issues Mobilization Fund, which contributed a measely $1.4m.

    The alleged goal of the payday loan industry is eliminating a scheduled 2010 deadline at which time it will discontinue operations unless it receives some kind of state extension. They are also looking to impose new consumer protections.

    This doesn’t sound unreasonable. I think it’s a good idea because the industry expiring because of inaction does not seem fair.

    The general public needs to realize that short-term capital is in high demand. The PDL industry wants to work with the state government and regulate this industry.

    Getting rid of the industry, just gives people fewer options. If better alternatives were available, you would be hearing about them.