Has Arizona changed its mind on payday lenders?
Voters may get a chance to answer that question on the November 2020 ballot if a citizen’s initiative gets enough petition signatures by July.
On one hand, we’re glad to see this question raised. On the other hand, most people with financial sense and the slightest amount of empathy for their fellow man should be distressed that special interest groups continue to press for ways to push people into poverty.
In 2008, Arizona voters overwhelmingly supported an initiative to stop payday lending in the state. Ever since that outcome, lobbyists for the financial industry have petitioned state legislators to circumvent the prohibition and reinstate the practice.
Tempted by campaign contributions and comforted by the argument that overturning the state ban on predatory lending is a step toward “economic freedom,” our lawmakers have continued to listen and act on behalf of out-of-state financial organizations pushing to end the state ban.
So far, those efforts have failed.
We’re glad to see this latest attempt to reinstate payday lending because we’re confident Arizona voters have enough common sense to defeat the initiative, just as they did in 2008. We’re also pleased that anticipating that outcome, Arizona legislators will be reminded that their constituents don’t want predatory lending practices in this state.
Unfortunately, little can be done to impede or prevent special interest organizations from continuing to petition for payday lending in Arizona. Our governing process empowers and protects all opinions and most speech, which provides an avenue for ideas, regardless of their consequence.
In this case, supporters of the “Economic Freedom Act” claim the initiative represents the “hallmark of a free society” by allowing people to decide for themselves the terms to transact goods, services or money. They associate the protections afforded by Arizona’s ban on predatory lending practices with socialism.
In fact, allowing unrestricted interest rates and payday lending will assure an increase in poverty in Arizona. Nationwide, consumer advocates reported in 2017 that 80 percent of these loans are renewed or rolled over within two weeks, initiating a cycle that often results in annual interest rates exceeding 300 percent. Those who borrow often pay more in interest than the original amount of the loan, and just 16 percent of these transactions are for emergency expenses, according to the same study.
Bring on the Economic Freedom Act, and let’s kill it again to keep this predatory practice out of Arizona.
Reprinted from Sierra Vista Herald/Review