In tomorrow’s Daily Star:

PHOENIX – Arizona voters may have buried the payday loan industry, but backers are hoping the state Legislature can dig them out.
Voters overwhelmingly rejected Proposition 200, a ballot initiative paid for and written by the loan companies to allow them to continue charging high interest rates on small loans along with extending their right to do business indefinitely instead of expiring on July 1, 2010.

Arizona joined a growing number of states that have effectively shut down payday lenders.
A payday loan is a short-term cash advance given to a borrower who promises to repay the loan plus a fee after the next payday.

A borrower needs only a checking account and a steady job in order to get loans up to $500 instantly.
Payday-loan supporters say they are needed for people who face an immediate cash crunch.

Critics say payday lenders get users into debt traps because many borrowers can’t repay the loan in a few weeks, causing them to extend the loan with additional fees.

Since the voters have spoken, payday loan operators are trying to figure out what to do next.
“We are still absorbing the loss and trying to figure out the best tactic to take to preserve the business,” said Stan Barnes, spokesman for Yes on 200.

Barnes added that about 2,500 Arizonans will be out of work if payday lenders are shut down.
“There is a lot at stake,” he said. “It’s not every day we eliminate an entire industry.”
State Sen. Debbie McCune Davis, D-Phoenix, opposed Prop. 200 and has steadfastly fought payday lenders.

McCune Davis expects a fight over the future of payday loans once lawmakers convene in January.

“I suspect they will have their lobbyist down here testing the water to see if the Legislature will override the public and give them a second lease on life,” McCune Davis said.

“But I thought the public made their intentions pretty clear.”

McCune Davis said payday lenders for the past two years have tried to get lawmakers to extend the 2010 sunset date on licensing but have been unsuccessful because the industry wasn’t willing to significantly drop interests rates or extend payment plans.

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