Inside Tucson Business Editorial:

In spite of spending more than $14.7 million – compared to about $1 million spent by opponents – nearly 60 percent of Arizona voters in November 2008 rejected the payday lending industry’s attempts to get a legal extension to stay in business.

Without the extension, the 10-year exemption to state usury laws that cap consumer loans at interest rates of 36 percent expires June 30 and payday lenders that are now allowed to charge interest rates in excess of 450 percent will have to shut down the next day. At that point, Arizona will join 15 other states and the District of Columbia where payday lending is outlawed.

Payday lending has proven to be such a failed experiment that not a single state has legalized it in the last five years. More states are headed the same direction as Arizona.

At the time of the defeat of Proposition 200 in 2008, the obvious and emphatic conclusion was that the will of voters was to get rid of payday lenders. But the industry that has been likened to loan sharking is making a last stand in the Legislature with a bill (HB 2161) that has been introduced by state Rep. Andy Tobin, R-Paulden, who will be seeking re-election to his third term this November.

The bill is essentially the same measure voters rejected and includes minor restrictions on the industry that, among other things, would drop the maximum interest clear down to 390 percent, allow a two-day grace period for a consumer to get out of a loan, outlaw loans to active-duty military, and prohibit multiple loans and loan rollovers.

Tobin’s new talking point is that he fears for the 3,000 people who work in the industry who will lose their jobs when the industry is forced to shut down.

What about the people who’ve been put out of work and small businesses that have been lost because payday lenders have sucked tens of millions of dollars out of the state’s economy each month that otherwise could have been spent – and gone a lot farther – at other businesses?

It’s also no secret that franchises and other national retailers steer clear of locations in or near centers where there are payday lenders. They know payday lenders are bad for their businesses.

It’s a technicality that the rejection of Proposition 200 in 2008 doesn’t fall under the state’s voter protection act that prohibits lawmakers from tinkering with voter-approved measures unless it’s to further the will of the voters. Nevertheless, the message was clear.

Fortunately, voters won’t need long memories to deal with lawmakers who missed the point of the 2008 vote.

This November every seat in the state House and Senate is up for election, as is the governor. Since Tobin’s legislative district is in Coconino and Yavapai counties, there’s not much Southern Arizonans can do about his re-election bid. But to get his bill passed in time to keep payday lenders in business as of July 1, he’s going to need two-thirds of both legislative bodies to make it emergency legislation and that means he is going to need lots of help.

Representatives from the Tucson region – including Republican Rep. Frank Antenori and Democrats Jorge Luis Garcia, Daniel Patterson, Nancy Young Wright, Steven Farley and David Bradley and Sen. Paula Aboud – have already voiced opposition to payday lending. That’s good.

Support for Tobin’s bill should be reason enough to vote any legislator out of office.

The bottom line for legislators is: either payday lenders go in July or you go in November.

Copyright  2010 Inside Tucson Business

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