Let’s keep up the pressure!  Today’s Republic:

A bill that would allow an out-of-state company to move into Arizona and charge triple-digit interest rates was put on hold Thursday, giving opponents another victory this week.

However, the fight is far from over, according to the bill’s sponsor.

The legislation was being pushed by San Antonio-based Brundage Management, which oversees 220 loan offices in nine states under the name Sun Loan Co. But Brian Tassinari, a Brundage representative, said that he had not been able to talk with enough committee members in order to get the legislation passed.

The bill failed Monday in the House Banking and Insurance Committee, but it was revived in the Transportation and Infrastructure Committee, where bill sponsor Andy Biggs, R-Gilbert, is the chairman.

A hearing was slated Thursday morning, but Biggs postponed it after talking with Tassinari just before the hearing.

Biggs said he is trying to get the bill passed because there is a need in Arizona for small, unsecured loans.

“They can’t go to traditional institutions,” Biggs said. “With today’s market and the economy so bad, people need small loans.”

He said the legislation could reappear in the Senate later in the session.

The bill had opposition from consumer advocates who claimed it was a form of predatory lending because it would allow financial-services firms to lend up to $3,000 with annual interest rates up to 113 percent.

Kelly Griffith, outreach director for Arizonans for Responsible Lending, said that citizens so far have effectively swayed lawmakers through phone calls and e-mails not to pass the bill.

“Definitely, Arizonans have taken a stand against predatory lending,” Griffith said. “These are ordinary citizens that are outraged.”

Sun Loan is looking to move into Arizona because payday-loan companies could go out of business next year when their licensing expires.

Voters in November, by an overwhelming margin, rejected a ballot measure pushed by payday-loan companies that would have allowed them to stay in business indefinitely and charge annual interest rates up to 391 percent.

Biggs said voters rejected payday loans and his legislation deals with different financial institutions. The legislation would allow Sun Loan or other firms to exceed the cap of a 36 percent annual interest rate for loans.

Currently, payday-loan companies are exempt from that limit.

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Friends,

We did it!  You did it!  It is clear that high-cost lenders are not wanted in Arizona, and YOU made sure our policymakers know it.

Today, the House Committee on Transportation and Infrastructure was supposed to vote on a high-cost, predatory loan bill, HB2071 (the same one you helped defeat on Monday).  After receiving your phone calls, emails, and continued engagement, the committee chairman, Rep. Andy Biggs (the bill’s primary sponsor) decided to take it off the agenda.  Because of you, he didn’t have the votes.

THANK YOU!  This week’s victories are proof that the democratic process works.  It works because you made your voices heard.

With every victory, we should take a moment to celebrate.   We’re fighting for consumers’ rights, and we’re winning.

But as always, we must remain vigilant.  The session is not over, and neither is our work.

Since we know the fight is not over, we need to make sure we have the resources to mobilize when this or other predatory lending bills are revived.  Please make a donation of $25 today to help Arizonans for Responsible Lending continue to fight back!

Thank you to the members of the House Transportation and Infrastructure Committee who were ready to vote against this bill today.

And thank you to the four members of the House Banking and Insurance Committee who correctly voted against it the first time it was heard this week:  Doug Quelland (R – Dist 10),  Cloves Campbell, Jr (D – Dist 16),  Robert Meza (D – Dist 14), and David Bradley (D – Dist 28).

Most importantly, thank you to all of the individuals and organizations who spoke out to oppose the bill, including:   Arizona Community Action Association; Protecting Arizona’s Families Coalition (PAFCO); Office of the Attorney General Terry Goddard; Arizona Consumers Council; AARP Arizona; Children’s Action Alliance; Arizona PIRG; Consumer Federation of America; Arizona Daily Star; Center for Responsible Lending; Society of St. Vincent de Paul; SEIU Arizona; and the William E. Morris Institute for Justice.

Thank you again for all that you do.

Sincerely,

Kelly

Kelly Griffith
Arizonans for Responsible Lending
www.NoMoreLoanSharks.com

OUR VIEW: Voters have said they want usurious lenders out of Arizona, but some lawmakers keep trying to let them in

It was only a matter of time before someone turned the nation’s credit crisis on its head and made the case that offering consumers high-interest loans is actually a good thing.

That’s what some state lawmakers are doing this week as they try to promote legislation that would allow companies to offer expensive loans that would be exempt from the state’s 36 percent usury cap.

Thankfully, House Bill 2608 didn’t make it out of committee Monday after Rep. Doug Quelland, R-Phoenix, went against his fellow Republicans in the House Banking and Insurance Committee and voted against the measure. Quelland’s vote created a 4-4 deadlock, which derailed the bill, at least temporarily.

Before opponents of predatory lending could even catch their breath, the measure was revived as House Bill 2071 and will get a hearing today in the House Transportation and Infrastructure Committee.

Why would a financial bill go to a transportation committee? It appears to be a simple case of shopping for a friendlier crowd.

The measure’s sponsor, Rep. Andy Biggs, R-Gilbert, is chairman of the Transportation Committee. Assuming that the panel’s three Democrats vote against the measure, it will be up to a Republican to make a principled stand – a la Quelland – on behalf of Arizona consumers.

One of those Republicans, Nancy McLain, R-Bullhead City, already voted in favor of the measure as a member of the banking committee. That means Frank Antenori, R-Tucson; Judy M. Burges, R-Prescott; or Sam Crump, R-Anthem, are the best hopes for sidelining this legislation that will make the rich richer and the poor poorer.

Given Arizona’s history with payday loans and voters’ desire to run predatory lenders out of the state, it’s shameful that some lawmakers still want to give out-of-state special interests a way to separate consumers from their hard-earned dollars.

Last fall, voters overwhelmingly rejected, by a 60-40 margin, Proposition 200, which would have allowed payday lenders to do business in Arizona indefinitely. The state law that allows payday loans is set to expire in 2010.

HB 2071 would allow for a new type of consumer loan ranging from $200 to $3,000. While the cost of these loans wouldn’t approach the effective interest rates of payday loans- which reach up to 400 percent – they could still have interest rates of more than 100 percent.

Biggs introduced a similar measure last year that failed.

Biggs conceded to Capitol Media Services’ Howard Fischer that the interest rates for the proposed loans are high. He said the rates are justified because such loans have a high default rate.

The fact that many borrowers are defaulting on the loans should raise some red flags. Lawmakers ought to remember that the credit crisis was caused, in part, by lenders giving home loans to people who couldn’t afford them.

As we editorialized last year when Biggs introduced a similar bill, these loans are a bad idea. They’re not as bad as payday loans, but they have the same potential to hurt borrowers as much as help them.

The state’s usury cap was created for a reason – to keep unscrupulous lenders from victimizing unsophisticated borrowers who don’t realize that high interest rates can become so burdensome that it becomes almost impossible to repay a loan.

Creating bad loan products will do little good for Arizona consumers or its economy.

“Throwing more bad credit options on top of already bad credit options is not a logical solution to the economic retraction in our local communities, state and country,” Kelly Griffith, outreach director for Arizonans for Responsible Lending, which is fighting HB 2071, told us Tuesday.

We encourage all lawmakers, particularly those in the majority like Antenori, to reject this bill – again.

When money is tight, consumers don’t just need credit options, they need good credit options.

CONTACT YOUR LEGISLATORS • Track legislation and get in touch with lawmakers through the Web sites www.azhouse.gov and www.azsenate.gov

• Call the Tucson legislative office at 398-6000.

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Rep. Andy Biggs thought he’d get one in under the radar in his own Transportation Committee… No such luck:

A bill that would allow an out-of-state company to move into Arizona and charge triple-digit interest rates for unsecured loans appears to have new life after being pronounced dead on Monday.

Legislation that would allow financial-services companies to lend up to $3,000 with annual interest rates up to 113 percent was defeated by the House Banking and Insurance Committee earlier this week.

Bill sponsor Andy Biggs, R-Gilbert, said at the time that the bill was dead. But Biggs, chairman of the Transportation Committee, has scheduled the same legislation to be heard during a 9 a.m. hearing today in his committee.

The bill, proposed the past four years, is being pushed by San Antonio-based Brundage Management, which oversees 220 loan offices in nine states under the name Sun Loan Co. Calls to Brundage were not returned Wednesday.

The most recent move comes as payday-loan companies, which are competitors of Sun Loan, could go out of business next year when their licensing expires.

Voters in November, by an overwhelming margin, rejected a ballot measure pushed by payday-loan companies that would have allowed them to stay in business indefinitely and charge annual interest rates of 391 percent.

Biggs, who could not be reached Wednesday, has said there will be a need for consumers to get unsecured loans if payday lenders go out of business.

He plans to use House Bill 2071, which originally had to do with traffic-photo systems and defensive-driving schools, as the vehicle to move the short-term loan interest bill through the Republican-controlled Legislature. Legislators are able to do this through a so-called strike-everything amendment, which replaces language in an original bill and is commonly used in the Arizona Legislature to get difficult legislation passed.

Kelly Griffith, outreach director for Arizonans for Responsible Lending, said the legislation would create more “predatory lending” and give an out-of-state company a “special deal.”

The legislation would allow Brundage or other companies to exceed the 36 percent annual interest rate cap for loans. Currently, payday-loan companies are exempt from that limit.

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Friends,

Because of all of your phone calls and emails, and your testimony at the committee meeting, Arizona had a great victory on Tuesday night!  The House Banking and Insurance Committee wisely voted (4 to 4) to kill HB2608 – the Small Installment Loan Act.  In this bipartisan vote against the bill, due entirely to the pressure you applied, the B&I Committee voted to NOT carve out yet another exemption from our Consumer Loan Act for high-cost lenders.

Thank you! We couldn’t have done with out you!

BUT THE FIGHT IS NOT OVER: We just learned that the bill will be heard AGAIN tomorrow, March 5th at 9:00AM, by the House Transportation and Infrastructure Committee.

Even though you already killed the bill once this week, bill sponsor Rep. Andy Biggs (R-Gilbert) is trying to resurrect it under a different name using the “strike everything” process: HB 2071 is the new face of this bill. (A bill that originally had to do with Traffic School!)

Don’t be fooled, it’s the same exact bill to allow a new form of predatory loans in Arizona.  And we must defeat it. Again.

We need you again, right now.

TODAY, CONTACT THE MEMBERS OF THE HOUSE TRANSPORTATION AND INFRASTRUCTURE COMMITTEE — TELL THEM TO VOTE NO ON HB2071!

Tell committee members that Arizona will not accept another high-interest lender in the state, and that we demand no more special deals for certain lenders that allow them to evade the 36% cap.   Tell them that a truly Free Market depends on everyone playing by the same rules!

(NOTE: Use these UPDATED talking points for your letters and emails.)

Here is the contact information for all Transportation Committee Members:

• Andy Biggs (R-District 22), Chair of Transportation Cmte & Bill Sponsor, abiggs@azleg.gov, phone: 926-4371, fax: 417-3022

• Frank Antenori (R-District 30), Vice Chair of Transportation Cmte, fantenori@azleg.gov, phone: 926-5683, fax: 417-3147

• Judy M. Burges (R-District 4), jburges@azleg.gov, phone: 926-5861, fax: 417-3104

• Sam Crump (R-District 6), scrump@azleg.gov, phone: 926-3014, fax: 417-3048

• Nancy McLain (R-District 3), Co-sponsor of the bill, voted the wrong way in Banking and Insurance Committee, nmclain@azleg.gov, phone: 926-5051, fax: 417-3003

• Steve Farley (D-District 28), sfarley@azleg.gov, phone: 926-3022, fax: 417-3128

• Eric Meyer (D-District 11), emeyer@azleg.gov, phone: 926-3037, fax: 417-3111

• Rae Waters (D-District 20), rwaters@azleg.gov, phone: 926-5550, fax: 417-3120

To see how badly Arizona Voters defeated special deals and triple-digit interest rates in each of their districts, click here.

For tomorrow’s Transportation Cmte agenda, or to monitor the proceedings live beginning at 9:00am, click here.

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Four Banking and Insurance Committee Members got the message on Tuesday that Arizonans are fed up with triple-digit interest rates and special deals for certain lenders.

When you’re done calling the Transportation Committee Members, please thank these four for doing the right thing when they said NO to triple-digit interest rates on Tuesday:

• Doug Quelland (R-District 10), dquelland@azleg.gov, phone: 926-3024,
• Cloves C. Campbell, Jr. (D-District 16); clcampbell@azleg.gov, phone: 926-3042
• Robert Meza (D-District 14), rmeza@azleg.gov, phone: 926-3425
• David Bradley (D-District 28), dbradley@azleg.gov, phone: 926-3300

Also, a special thank you to the organizations and individuals who spoke out at Tuesday’s committee meeting to say NO: Arizona AARP, Society of St. Vincent de Paul, William E. Morris Institute for Justice, Attorney General Terry Goddard, Arizona Consumers Council, All Arizona School Retirees Association, SEIU Arizona, and Protecting Arizona’s Family Coalition.

We must ALL stand up again!  Starting with your phone calls right now!

Thank you for your continued involvement,

Kelly Griffith
Arizonans for Responsible Lending
www.NoMoreLoanSharks.com

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PS:

For further information about HB2608, click here.

We did it!  Yesterday, the House Banking and Insurance Committee killed the “Payday Light” bill, HB2608.  Why? Because YOU spoke up! Story: