Republic: Goddard opposes raising payday loan rates
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, joined by fellow Democrats and religious leaders Tuesday at the Phoenix Public Library, said the industry has funneled millions of dollars into Proposition 200, which would cap interest rates for short term loans at 391 percent and keep them in business
Goddard said allowing lenders to charge nearly 400 percent in interest would be “an abomination.” He also said payday lenders “trap” Arizonans into expensive short-term loans.
Currently, with loan extensions and additional fees, annual interest rates from payday lenders can reach 460 percent annually.
Under an industry-led measure before voters Nov. 4, 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. It also removes a provision in state law that would essentially eliminate the industry in 2010.
Stan Barnes, chairman of the Yes on Proposition 200 campaign, said Goddard and other opponents are “either willfully ignorant of the facts or dedicated to their own personal political agenda.”
“They wish to eliminate a credit option from people, which makes no sense in a down economy,” Barnes said.
Opponents of the measure are relying on events like Tuesday’s to present their case because they have raised about $100,000, while the payday industry has raised more than $11 million to appeal to voters.
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