Arizona Proposition 200

Arizonans for Responsible Lending has released an internet ad that employs humor in alerting voters to what they see as the dangers associated with Proposition 200.

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Anyone who is still undecided about how to vote on Proposition 200, which would perpetuate payday lending in Arizona, should attend a forum this evening that will explain the pitfalls of payday loans for consumers.

“We’re trying to spread the know-ledge of why payday lending exists in Arizona, how it traps people in debt and what the faith community and nonprofit community are doing about it.”

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Chances are you’ve never been inside your friendly neighborhood payday-loan center. They popped up all over the place in 2000, after the Legislature carved out a 10-year exemption to the state’s 36 percent cap on interest rates. In doing so, our leaders ushered in a multibillion-dollar industry offering short-term, high-interest loans to tide people over until payday.

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Over 700 payday lenders across the state of Arizona charge up to 459 percent annual interest on loans that trap their customers in long-term debt, finds a new report from the Center for Responsible Lending. A ballot measure on which the payday lending industry has spent $9 million so far to market in the state as “reform” would only reduce the interest rate to 391 percent, and cancel the 2010 expiration of an exemption for payday lenders from the 36 percent cap that covers other lenders.

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These same people are now doing a genuine disservice to the voters of Arizona by demanding a “no” vote on Proposition 200 while telling a one-sided story designed to prey on people’s emotions.

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“The payday lender is little more than a con man, a lender hoping his borrower won’t understand how much he is paying for that loan or be able to repay it when it is due so he can take him for another ride on the bankruptcy express.

The economic principle that the borrower is unable or unwilling to cope with is that by borrowing his next paycheck, he will have already spent the money by the time the next paycheck arrives.”

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