Our view: Forum aims to counteract the various deceptions in industry’s fliers

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.

The forum is one way that consumer groups, activists and churches opposed to payday lending are fighting against the initiative and its well-bankrolled supporters. Payday lenders have been using their funds in recent weeks to send fliers to homes under the guise of a consumer organization in order to deceive voters about the initiative.

“At the forum, folks can learn the truth about payday lending, unlike what they have been receiving in the mail,” said David Higuera, political director for Arizonans for Responsible Lending, No on 200.

“We’re trying to spread the knowledge 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.”

While payday-loan opponents may have public sentiment on their side, the industry is spending a great deal of money in an effort to sway voter opinions.

Howard Fischer of Capitol Media Services reported in Tuesday’s Star that payday lenders have so far raised $11.6 million for their Yes on 200 campaign, far and away the most of any initiative campaign this year. Conversely, payday-loan opponents have raised $125,000.

We recently received a flier from a group called the Arizona Community Financial Services Association. Don’t think for a second this is a grass-roots consumer organization. The association is registered as a lobbying group in the state and its two principals are Phoenix lawyers Mario Diaz and Lee Miller.

The real grass-roots effort is taking place on the other side, with nonprofit groups, faith communities and a handful of politicians leading the charge against payday lenders.

Earlier this month, the Arizona Ecumenical Council, which represents 18 Christian denominations and various organizations throughout the state, adopted a resolution in opposing to Prop 200.

“With Proposition 200, payday lenders are trying to get away with usurious interest rates in Arizona forever. As people of faith, we are called upon to speak out against such injustices,” the Rev. Jan Flaaten, the council’s executive director, said in a press release.

Under Prop 200, payday lenders would be able to operate in Arizona in perpetuity and to charge fees that equal an annual interest rate of 390 percent.

However, if Prop 200 fails, the state’s payday-lending law would expire in 2010 and no loans would be allowed that exceed the 36 percent usury cap.

But don’t expect payday lenders to tell you that in their fliers.

“We’re up against a huge propaganda machine,” Higuera said. “They’ve got $11.6 million and they spend every dime of that pretending they’re not the industry, but a consumer group.

“Their fliers are deceitful. They’ll never state that Prop 200 will get rid of the 2010 expiration date. They’ll never state that without Prop 200 they’ll be forced to cap loans at 36 percent interest, just like other lenders.”

Today’s forum will unveil the ugly truths about payday lending. In keeping with our long-held opposition to payday lending, we urge Southern Arizonans to attend, and then to reject Proposition 200.

IF YOU GO:

What: Payday lending forum: “No on Prop 200: Why Payday Lending Hurts Arizona.”
When: 5:30 p.m. to 7 p.m. today
Where: Catalina United Methodist Church, 2700 E. Speedway

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