Arizona Daily Star Editorial:

Our view: Lawmakers must not rescue usurious industry; voters have spoken

The unmitigated gall of the payday-loan industry and its desperation to stay in business in Arizona will be on display again in Phoenix next week.

The industry is still working the angles at the Legislature. Lawmakers must turn it down.

Voters said by a 3-2 ratio in 2008 that they want the usurious lending shops to shut down, as scheduled, on June 30.

Further, as Capitol Media Services’ Howard Fischer reported on Friday, efforts to “reform” the industry’s practices and extend its Arizona life were dropped in the state House after bill sponsor Andy Tobin, R-Paulden, found no Democrats were willing to support the bill.

Now, according to Fischer, Senate Appropriations Chairman Russell Pearce, R-Mesa, has agreed to give a lifesaving extension a hearing in his committee on Tuesday.

In 2000, the Legislature authorized “deferred presentment transactions” on a trial basis. In these transactions, a borrower writes a check for up to $500, plus a fee of up to $17.85 per $100 borrowed. The lender advances the money, minus the fee, and promises not to cash the check for up to two weeks.

The trial period, and the industry’s exemption from the state’s 36 percent interest cap, expires June 30.

The new measure would allow lenders to continue rake in what amounts to interest payouts of 400 percent annually, Fischer wrote. In exchange, the industry is offering to give some $1.5 million of proceeds each year to organizations that help the needy.

Never mind that some of the needy may have become needy because of the crippling burden of payday loan interest costs.

Any member of the Senate Appropriations Committee who approves this measure will be demonstrating utter indifference to Arizona voters.

This last-minute reprieve must be killed in committee and payday lenders must be shut down June 30.

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