Summary of Prop 200
This proposition would preserve small short-term loans, known to the public as payday loans, through rate cuts, the elimination of loan extensions and a new repayment plan. A “yes” vote would repeal the termination date of July 1, 2010 for the existing payday loan licensing program allowing it to continue indefinitely, allowing payday loan services to provide electronic debit services over 35 days. That means that if the borrower goes over the period of 35 days given to pay the first loan back, they do not have to buy a second complete loan that would include the interest they have already accumulated on the first loan. This measure would also require payday loans to be printed in English and Spanish, prohibit certain fees, permit only one payday loan per customer per day, give the customer a payment plan if requested, and prohibit customers with outstanding loans to apply for new loans.
Some questions to ask are would this law really reform the current payday loan industry? Proponents want this because it will require the payday loan stores to significantly reduce loan fees, eliminate costly loan extensions and mandate a no-cost repayment plan for the customers that cannot meet their obligations. Thus allowing to payday loan companies to preserve their services for those that need them.
Advocates say this proposition will make sure payday lenders are tightly regulated, more consumer friendly, and remain available to serve those people who need a small, simple to understand, short-term loan." "This measure will bring dramatic pro-consumer reform to payday lending and preserve consumer choice."
Opponents say Arizonans have to pay interest rates on payday loans that far exceed the usury rate of 36% for all other loans in the state. This initiative would make 391% interest rates a permanent reality here. Other states have been successful in protecting their citizens by forbidding payday lending at triple-digit interest rates, and Arizona must follow suit. Payday lenders have had free reign in Arizona because of a 10-year exemption from the state's 36% usury cap that the Legislature granted in 2000. Now they are using this initiative to try to extend the exemption indefinitely
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2 comments:
The out-of-state payday lending industry has been pouring millions of dollars into glossy, deceptive ad campaign to try and convince Arizona voters that a yes vote on 200 is about “reform.” It’s not – in fact, 200 is no reform at all. It would allow payday lenders to keep on ripping off hardworking Arizonan families with 400% interest payday loans.
Voters deserve the facts – to check out the truth behind the payday lending industry’s “liar fliars” visit: www.200isnoreform.com.
A no vote on Prop 200 is the only way to go.
Even if you vote no for payday loans, people would just go out of state to grab a short term loan. I read in another blog that Georgia residents were heading to South Carolina to get loans!
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