In yet another editorial from a leading regional paper in Arizona, The Sierra Vista Herald urges its readers to reject Prop 200:

“If anything, the ‘reform’ in this act favors the payday loan business over the consumer. If approved, this measure would not only override what the Legislature approved, it would make it untouchable from lawmakers in any future session.”

Full editorial here, and below:

When the Legislature passed a law that would put the payday lending industry out of business by 2010, it should have been easy to see a voter initiative was coming.

And so, that is exactly what Arizonans get to consider this election. They will determine if Proposition 200, the initiative dubbed the “Payday Loan Reform Act,” should go into effect.

We urge you to say “no” to the proposition.

If anything, the “reform” in this act favors the payday loan business over the consumer. If approved, this measure would not only override what the Legislature approved, it would make it untouchable from lawmakers in any future session.

The measure would reduce what lenders charge, going from $17.85 per $100 for the two-week loans to $15 per $100. If you haven’t done a payday loan, what this means is that if you want to borrow $100 today, you give the loaner a $115 check that they cash in two weeks when your bank account is refilled with your paycheck.

Those urging you to say “yes” to this initiative describe the new fee rate as a “substantial” reduction from the current rate. But it isn’t. The problem we see is that at that rate, loan businesses would still charge an overall annual interest rate of 391 percent, down from one of more than 400 percent.

Supporters try to work past the interest rate, instead arguing Arizonans should have the option of short-term loans, especially in a time when credit is tight. The payday loan industry has pumped millions of dollars into this state to get you to believe this act is good for you, giving you an option when you’re in a bind.

And then there’s the cycle that Arizona Attorney General Terry Goddard says he gets complaints about: People claiming fraud when they take out a payday loan to pay off another payday loan.

Part of America’s financial problems stem from borrowing on tomorrow, and the compounding interest and problems that it brings, such as borrowing even more to pay off other debts. It’s time to change course and protect some consumers from themselves and improve the financial foundation of our state and our nation.

There is no real reform in this act. We see an industry fighting for its future in Arizona. And we support what the Legislature has decided and urge you to say “no” to Prop. 200.