PRESS RELEASE – For Immediate Release
November 1, 2008

CONTACT: David Higuera, No on 200 – (520) 907-2080

BUSINESS LEADERS ACROSS ARIZONA OPPOSE PROP 200

Urge Arizona voters to reject faux-reform in favor of equal regulations for ALL lenders

PHOENIX – Over the course of this campaign, No on 200 has received the strong support of the business community from across the state, in addition to the tremendous support received from the nonprofit community, civic leaders, faith community leaders, neighborhood leaders and others.

“That’s because business leaders know that predatory payday lending is harmful to Arizona’s economy and that Prop 200 would not fix the situation, only make it worse,” said Sen. Debbie McCune Davis, Chair of the No on 200 campaign.

In fact, many business leaders oppose Proposition 200 precisely because it is a voter-protected ballot initiative that would grant one industry special status indefinitely, making it “bullet-proof” from not only future regulation, but from free-market competition as well.

It would appear, in fact, that business leaders who support Prop 200 are mostly limited to those on the payday industry’s payroll.  See today’s story in the East Valley Tribune for more details:
http://www.eastvalleytribune.com/story/129387

Ray Jones, Chairman of WESTMARC, stated that payday lenders “hurt military installations such as Luke AFB where young, inexperienced, and low paid military service personnel can be unwary targets for such operations.”  He added that Prop 200 “most likely eliminates the Legislature’s ability to further and better regulate this industry in the future.  This initiative is bad for Arizona’s economy.”

Todd Sanders of the Greater Phoenix Chamber of Commerce commented regarding the Chamber’s opposition to Prop 200: “With this kind of solution, and in particular, one industry, you’re never going to have the option to change it, and you’re going to voter-protect one industry.”

Business leaders understand that if consumer lenders in Arizona must all abide by the 36 percent interest cap in the Consumer Loan Act, but payday lenders succeed in writing 391 percent interest rates for themselves permanently into law, the result would be an attack to the free market itself: a specially-protected industry that can continue to ignore usury laws and harm consumers, extract huge sums from the state’s economy, and put other lenders in that state at a severe competitive disadvantage – by law.

It is estimated that $149 million leaves Arizona each year in fees stripped from trapped payday loan borrowers.  This is largely due to the 400 percent interest rates that force payday loan customers into repetitive borrowing situations over months or even years. On the other hand, hundreds of responsible consumer lenders in the state offer small-dollar loans at less than 36 percent interest in keeping with the Consumer Loan Act – and are well positioned to fill the void should payday lenders choose to leave the state rather than lower their interest rates in 2010.

The NO on 200 campaign has been endorsed by the Greater Phoenix Chamber of Commerce, the Arizona Credit Union League, the East Valley Chambers of Commerce Alliance, the Ahwatukee Foothills Chamber of Commerce, the Apache Junction Chamber of Commerce, the Chandler Chamber of Commerce, the Gilbert Chamber of Commerce, the Mesa Chamber of Commerce, the Queen Creek Chamber of Commerce, the Tempe Chamber of Commerce, the Tucson Metropolitan Chamber of Commerce, the Flagstaff Chamber of Commerce, Southern Arizona Leadership Council (SALC), WESTMARC: Western Maricopa Coalition, and other business leaders across the state.

Jim Click, John Munger, Jim Pederson, Eddie Basha, Joe Anderson, Scott Earl, Buck O’Reilly, Don Mackey, Kathleen Perkins, Richard Myers, Gen. Ronald E. Shoopman, and many other leaders in the business community have endorsed NO on 200 and are helping spread the word.

In addition to business leaders, labor leaders from across Arizona have condemned Prop 200 and urge their members to reject it as well.  “Predatory payday lenders are spending millions to deceive voters on a ballot measure that has one goal – protect their profits at the expense of hardworking families who are desperate for cash and willing to put their paychecks on the line,” stated SEIU Arizona Director Scott Washburn.  “Vote `No’ to restore common sense fair lending laws for all Arizona families.”

Nationally, this issue has drawn the ire of pro-business CNN host Lou Dobbs, who said the following on his show on May 16th of this year:

You’re probably asking what is the difference between, well, payday loans and loan sharking. And if you look at those rates, you’ll find there’s not much difference in point of fact in interest rates.

There is in fact no federal law that bans payday loans. Fourteen states have laws that ban or limit them. Ten states have usury rates, or caps on small loan interest rates.

How about that idea?

But for some reason, the United States Congress and this administration think it makes perfectly good sense to do what is being done to these unfortunate people left to payday loans. It’s inexcusable in my opinion. Absolutely inexcusable. And it just goes on and on and on. Taking advantage of the weaker and the more unfortunate among us. It is really something to make you really proud of, isn’t it?

American business, perhaps the U.S. Chamber of Commerce ought to step into this and do the right thing.

Full transcript here.

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Arizona voters can finally reject predatory interest rates and sweetheart deals for payday lenders that hurt other businesses, consumers, and the overall economy.  Voters can reject Proposition 200 on Tuesday.

For more information, visit: www.200isNoReform.com

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Paid for by Arizonans for Responsible Lending
No on 200
Major Funding by AARP Arizona
Center for Responsible Lending, N.C., SEIU, Washington, and SIMG, Tucson
Additional Support from Arizona State Credit Union, UFCW Local 99
The Arizona Credit Union League, and Mi Familia Vota