FOR IMMEDIATE RELEASE
April 29, 2010

CONTACT:
David Higuera (520) 907-2080
david@nomoreloansharks.com

SINE DIE: ARIZONANS TURN BACK 400% PAYDAY LOANS … AGAIN

Despite Flurry of Lobbying and Influence Peddling by Out-of-State Lenders,
The Will of the People Prevails

PHOENIX, AZ —  As the Forty-ninth Legislature draws to a close, Arizona voters have struck a major victory for consumers, neighborhoods and the state’s economy.

The voters, who soundly rejected an industry attempt to enshrine 400%-interest payday loans in law in 2008, ensured that the Arizona Legislature upheld their verdict this year.

“During the 2010 Legislative Session, the payday lenders’ attempts to circumvent the will of the voters never gained any traction, with either Republicans or Democrats, in either the Senate or the House,” stated Sen. Debbie McCune Davis (D-Phx), Co-Chair of Arizonans for Responsible Lending.

“It wasn’t for lack of trying by the payday lenders. They came after the sunset with everything they had, including three different bills and dozens of lobbyists. But at the end of the day, the voters’ verdict to end triple-digit loans in Arizona was heard loud and clear by my colleagues on both sides of the aisle.”

“In this time of very divisive politics, it is encouraging that both Republicans and Democrats in Phoenix stood together on this one,” added A.R.L. Co-Chair Marian McClure, Republican of Tucson. “They stood together to say, ’400-percent loans are bad for consumers, bad for the economy, and go against what Arizonans see as fair and appropriate.’”

The payday lenders started trying to extend 400-percent loans early in the session and continued right into the final month. They failed to convince the House Banking and Insurance Committee on January 25, 2010, having to pull the bill at the last minute for lack of support.

They lost a very high-profile battle in the Senate Appropriations Committee on March 16th, in which three Republicans joined two Democrats in voting NO to defeat the measure.

Finally, attempting to write some new and different loopholes into the Consumer Loan Act as a last resort, the payday lenders lacked the support to even get a hearing on April 7th in the Senate Finance Committee. All members except the committee chairman were prepared to vote NO on the lenders’ bill before it was pulled.

“The bottom line is, Arizonans do not want 400% loans, or any triple-digit lending, to continue to be condoned in our state,” said Kelly Griffith of the Center for Economic Integrity in Tucson.  “Arizonans made their wishes clear at the ballot box, and just as clear throughout the legislative session.”

After the July 1, 2010 payday loan sunset, the fight against predatory lending continues.

According to the transcript of yesterday’s Advance America investor call to review Q1 earnings, the largest payday lender in the country is “currently exploring alternatives for continuing the service customer (sic) demand in Arizona.”

Leslie Cooper, Director of Arizona Consumers Council warns that as the sunset approaches, our work continues:

“All of us must remain vigilant to ensure that these predatory practices come to an end on July 1, 2010 and are not replaced by other predatory practices.

“Unfortunately, the payday industry has a history in other states of sticking around and attempting to skirt the law. But we’ll stay on the lookout, to protect consumers and promote responsible alternatives.”

# # #

Paid for by Arizonans for Responsible Lending

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 Arizona
The Arizona Credit Union League, The Center for Economic Integrity
and Mi Familia Vota

www.NoMoreLoanSharks.com

Flagstaff’s paper of record weighs in:

In today’s Arizona Capitol Times:

After losing a two-year, multimillion-dollar battle with voters and lawmakers, Arizona’s payday lenders are fighting for their lives.

The industry is set to expire July 1, a reality that was reinforced during the legislative session when lawmakers rebuffed three attempts to keep it alive.

But industry executives say the high-interest, short-term loan business will find ways to survive, if only with a different, less-lucrative business plan. Critics say like any good financial scheme, payday lenders will look to get a return on their massive investment left behind and will be back with its cadre of lobbyists.

Rather than shut down for good, some are looking at auto title loans, check cashing and other financial services they can provide that would keep at least some of their 603 stores open and some of their nearly 5,000 workers employed. But there may be only so much room in the market for those services, and many other businesses already offer them.

Steven Schlein, a spokesman for the Community Financial Services Association of America, a national payday lending group that represents 60 percent of the lenders in Arizona, said payday loan businesses are still evaluating their options.

“They can make other kinds of short-term loans. They’re going to stay in the short-term lending business, absolutely,” Schlein said.

Some lawmakers are convinced payday lenders will stick around, biding their time under a different business model, until next year when the Legislature begins another session with new members. Critics of the industry say payday lending is simply too lucrative and that the industry has invested too much in the fight to simply fade away, even if it has to lay low for a year or two. In 2008, the industry spent $15 million on a failed ballot measure that would have saved payday lenders.

Sen. Debbie McCune Davis, one of the Legislature’s most active foes of payday lending, said she believes the industry may try a “backdoor approach” similar to a recent proposal that was pitched in the Senate Finance Committee.

Instead of reauthorizing the law that allows interest rates that add up to about 400 percent annually, industry supporters proposed changing the law to allow higher fees on consumer loans that are otherwise capped at 36 percent interest. That bill was pulled from the committee’s agenda without a vote due to a lack of support.

“What they’re hoping is that the public attention to the issue will quiet down, and that they’ll be able come back in and simply influence legislators to give them another mechanism to do business. Essentially, that’s what’s happened in other states. They don’t just walk away,” said McCune Davis, a Phoenix Democrat.

McCune Davis said she doubts all 603 payday lenders in Arizona will simply close their doors on July 1, and some industry insiders say she’s probably right. Some, though not all, may stay in business by offering services such as auto title loans, which are short-term loans given against the value of a borrower’s car that consumer groups say can  bring nearly 700 percent interest. Businesses may also turn to check cashing, money wiring and installment loans, which are loans that are paid back in small, fixed amounts.

Payday lenders and their supporters say the demand for the short-term, high-interest loans isn’t going away. Some credit unions are already looking to pick up some of the slack left behind by the industry’s pending demise.

Many credit unions already offer alternatives, such as low-limit credit cards, “credit builder loans” with one- to two-year repayment plans and other services, said Sandy Watts, executive director of the Arizona Credit Union League. Watts and Scott Earl, the organization’s president and CEO, said credit unions are looking for new services they can provide as alternatives to payday loans, though they likely won’t be quite as easily obtainable as payday loans.

“I don’t think there’s any credit union that’s planning on being open on a street corner at 10 o’clock at night to fill people’s loan needs. But I do believe that credit unions have alternatives, and it’s much better for the consumer,” Earl said.

But many payday loan supporters are skeptical that credit unions can truly fill the need left by the end of payday lending in Arizona. Lee Miller, an industry lobbyist with the firm Mario Diaz & Associates, said payday lenders were popular with many consumers precisely because credit unions couldn’t offer the services they wanted. Miller said he doesn’t expect that to change.

“What fabulous new thing are they going to roll out July 1 to try to capitalize on this market opportunity?” Miller asked sarcastically.

Miller said the demand for payday loans is real and isn’t going away. The people who use them do so because they have no other options, he said. They need quick cash, and have largely learned through trial and error what it costs to bounce checks and surpass the limits on their credit cards.

It’s hard to guess exactly what type of legislation payday lenders will propose in the future, Miller said, but the issue almost certainly will be revisited in 2011 or 2012.

“You probably will have folks come back to the Legislature and say, ‘You didn’t like payday. How about this?’ Lord knows what ‘this’ is. That’s what entrepreneurialism is all about,” Miller said.

Payday lenders can come back to the Legislature anytime they want, but if the events of the past two years are any indicator, they’re going to need a different game plan.

Proposition 200, a 2008 ballot measure that would have enacted new regulations on payday lenders while eliminating their sunset date, failed 60 percent to 40 percent, despite the millions of dollars that the industry pumped into the campaign. The industry joined national legislative groups and packed the membership rolls of numerous chambers of commerce to drum up support.

This year, despite hiring at least 20 lobbyists and consultants, the industry was never able to gain enough support for three separate bills that would have allowed it to continue operating. One bill failed in the Senate Appropriations Committee, while two others had so little support that their sponsors didn’t even bother to bring them up for a vote.

Industry lobbyists aggressively courted lawmakers they thought could be turned. Sen. Ed Bunch, who took office in February after he was appointed to replace former Sen. Jim Waring, said he met three times with industry representatives over payday loan legislation, but was never swayed in his opposition.

“It’s amazing to me how many times a stake had to go through its heart before it died,” said Bunch, a Scottsdale Republican. “I think I had three different meetings, and the third time it was sort of like, what part of ‘no’ are you having trouble with?”

Some lawmakers were wooed with incentives aimed at winning them over. Rep. Cloves Campbell, a Phoenix Democrat who opposed reauthorization after initially supporting it, said he met with industry representatives and suggested they speak with community leaders in areas with high concentrations of payday loan stores. Campbell and those leaders suggested that industry proposals include a community reinvestment plan, which would have diverted industry money into financial education programs and organizations like the Salvation Army.

Such a proposal was included, but later removed, from a reauthorization bill that failed in the Senate Appropriations Committee in March. Had the bill reached the House, Campbell said it still may not have been enough to gain his support, despite the obvious need for such services in his district, if the industry fought other reforms that he and other lawmakers asked for.

“You know how this hustle is,” Campbell said. “Everybody takes something out when they give you something else.”

Sen. Paula Aboud, another payday loan opponent, said the industry has exhausted its options for the current legislative session. And any future attempts at reauthorization will be met with the same fierce opposition that defeated Proposition 200 at the ballot box and three bills in the Legislature, two of which never even went up for a vote because they lacked support.

“They’ve got to start all over again,” the Tucson Democrat said. “We stopped them at every turn.”

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Our view: Lawmakers must stand firm against industry’s latest ‘reform’ tricks.

We’re not going to count these chickens until the Legislature adjourns and its members disperse back into the real world. Still, it appears likely that the payday loan industry won’t get a reprieve from lawmakers.

That’s as it should be: Voters said by a 3-2 ratio in 2008 that they want the usurious lending shops to shut down, as scheduled, on June 30.

Nevertheless, the payday loan industry has attempted at least three end runs around the electorate to get “reform” legislation enacted that would extend its life in Arizona.

The industry’s lobbyist, Lee Miller, said this week he didn’t have enough votes to get the last effort through the Legislature, Howard Fischer of Capitol Media Services reported on Wednesday.

Further, despite the industry’s lament to lawmakers that thousands of jobs would be lost when its exemption from the state’s 36 percent interest cap expires on June 30, Miller predicted that some shops will be able to continue doing business, Fischer reported.

They will make money cashing checks or by being agents for the Motor Vehicle Division, Miller said.

There are about 650 payday lending outlets in Arizona. They opened business here after the Legislature in 2000 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.

These rates amount to interest payouts of about 400 percent annually and have entwined too many borrowers in a crushing, almost never-ending cycle of debt.

In the industry’s most recent “reform” effort, they would have agreed to abide by the 36 percent interest cap, but would be allowed to charge an “origination fee” of up to 7.5 percent of the loan, as well as a $10 document orgination fee.

Miller told Fischer he couldn’t gather the votes to pull that off.

We certainly hope not.

The last days of every legislative session are chaotic, and sometimes a bad bill will be sneaked through the process – often as a “strike everything” amendment that wipes out the original language with something totally different.

So we won’t be celebrating the industry’s defeat until the Legislature adjourns and goes home.

They must let stand the law that sunsets the payday loan industry’s exemption from the 36 percent cap.

No more special deals giving sharks an edge over minnows. Period.

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Credit Union Times reports:

Barring any last minute switch by Arizona lawmakers, the state’s payday lenders will be closed effective June 30.

“It’s never over until the legislature adjourns, but many people are now saying the firms will be out of the lending business and converting their outlets to pawn shops, check cashers, auto title and whatever else they can come up with,”  said Austin DeBey, vice president of governmental affairs for the Arizona Credit Union League.

The league, joined by the North Carolina-based Center for Responsible Lending, AARP, consumer groups and others, saw the payday proponents’ final attempt go down to defeat Wednesday after a state Senate panel declined to revive a bill overturning a 2008 voter referendum rejecting payday firms.

The payday proponents, led by large national firms which control many of the state’s 650 shops, maintained the high rate offerings should remain since the market has shown a need for short term, emergency loans not available from banks or CUs.

In trying to win lawmaker support, the payday proponents also offered to set up foundations to provide grants to consumer groups and special counseling services for debtors.

“Defeat of the bill is a victory for consumers,” said DeBey of the league. Arizona now joins a handful of states which have barred or severely restricted payday operations with North Carolina and Ohio singled out as two of the leaders.

The AP reports:

PHOENIX — When Jeffrey Smith needed some quick cash to pay a medical bill, he turned to a payday loan store near his home outside Phoenix.

He eventually took out a string of payday loans and fell into a vicious cycle in which he would call out sick from work so he could drive all over town to pay off loans and take out new ones. The experience left him in bankruptcy, lying to his wife and fighting thoughts of suicide.

Stories like Smith’s and a growing backlash against payday lending practices have prompted legislatures around the country to crack down on the businesses.

In the most severe case, Arizona lawmakers are on the verge of shutting down the entire industry in the state. A law took effect in Washington this year capping the amount of payday loans and the number that a borrower can take out in a year. And in Wisconsin, lawmakers are locked in a heated battle over whether to regulate the industry.

Payday lenders say they are providing an important service, especially in a dreadful economy where people are short on cash. Detractors say the industry preys on desperate people with annual interest rates that routinely exceed 400 percent.

“It’s sort of like a twisted person that’s standing on the street corner offering a child candy,” Smith said. “He’s not grabbing the child and throwing him into a van, but he’s offering something the child needs at that moment.”

Payday loans are short-term, high-interest loans that are effectively advances on a borrower’s next paycheck.

For example, a person who needs a quick $300 but doesn’t get paid for two weeks can get a loan to help pay the bills, writing a postdated check that the store agrees not to cash until payday. The borrower would have to pay $53 in finance charges for a $300, two-week loan in Arizona – an annual interest rate of 459 percent.

Payday loan stores are ubiquitous in Arizona, especially in working-class neighborhoods of Phoenix where the businesses draw in customers with neon lights and around-the-clock hours.

Payday lenders in Arizona several years ago were granted a temporary exemption from the state’s 36 percent cap on annual interest rates. The exemption expires June 30, and the industry says the interest cap is so restrictive that it will have to shut down entirely.

Bills that would have kept the industry alive languished in the House and Senate, and the year’s third and final attempt was pulled Tuesday amid a lack of support.

Consumers frustrated with the economy “look for a dog to kick” because they’re angry with the financial institutions they blame for the Great Recession, said Ted Saunders, chief executive of Dublin, Ohio-based Checksmart, a payday lender that operates in 11 states including Arizona.

“They want to find a villain,” Saunders said. And opponents “have done a good job of painting a big X on my back.”

Payday lending opponents say the industry depends on trapping borrowers in a cycle of debt where they continually renew their loan or take out new ones because they can’t afford to pay the debt while still covering their daily expenses.

Eventually [in fact, most often], the fees can surpass the value of the initial loan so the lender profits even if the borrower defaults.

Industry proponents say the market has shown a need for short-term, small-dollar loans that aren’t generally available from banks or credit unions, especially with traditional lenders being more conservative in the down economy.

They say the industry supports working families that otherwise wouldn’t have access to credit in an emergency.

Supporters also say taking a payday loan is cheaper than paying a late fee or bouncing a check to cover emergency costs like fixing a car or keeping the electricity turned on.

The voting public doesn’t seem to be buying the argument.

In 2008, voters in Arizona and Ohio soundly rejected industry-backed measures that would have allowed payday lenders to continue charging high annual interest rates.

A group in Montana is collecting signatures for an initiative asking voters to decide whether to cap interest rates at a level that would doom the industry.

“It’s just a fairness issue,” said state Sen. Debbie McCune Davis, a Phoenix Democrat who led the fight at the Legislature against payday loans. “I think when people work for a living they’re entitled to have financial instruments that are ethical in the way that they operate.”

Industry backers say the election results aren’t a good guide because many voters have no experience with payday loan services.

“Our customers, they don’t have much of a voice in these fights,” said Steven Schlein, a spokesman for the industry lobbying group Consumer Financial Services Association of America.

Arizona wouldn’t be the first state to kick out payday lenders. North Carolina let lapse a temporary law authorizing payday loans, and the District of Columbia repealed its law allowing them.

Ohio tried to cap interest rates at 28 percent, but some payday lenders have survived by using a state law allowing them to charge loan origination fees.

The payday loan industry has succeeded in fighting back attempts in Congress to crack down on their business thanks to an expensive lobbying effort.

When Arizona’s law expires, executives have said they’ll try to keep open some of their 650 stores in the state by stepping up their other lines of business, including car title loans, check cashing and prepaid debit cards…

Associated Press Writer Paul Davenport in Phoenix contributed.

To see related stories on Huffington Post, click here.

Luige del Puerto, Arizona Capitol Times reports:

After three failed attempts this year to keep the payday loan industry alive in Arizona, even a lobbyist for the industry admits it’s all over.

The most recent attempt to save the payday loan industry ended quietly on April 6, when the Senate Finance Committee canceled a vote on a strike-everything amendment to H2035. Two other bills that would have allowed payday lenders to keep operating were rejected earlier this year.

Barring a last-ditch legislative effort to save the industry, all 603 of the payday loan stores in Arizona will have to close by July 1.

“It means the sunset date is going to arrive and the payday statutes are going to evaporate,” said Lee Miller, a lobbyist for the industry.

All three of the bills that failed this year would have allowed the industry to continue operating without a sunset date, although they contained additional regulations aimed at protecting consumers who fall into a trap of high-interest loans. A ballot measure that failed in 2008 contained similar provisions.

The strike-everything amendment that was pulled from the hearing calendar would have changed existing consumer loan statutes to allow lenders to charge higher fees on loans that are capped at 36 percent interest.

The goal was to allow payday lenders the flexibility to operate under a different statute, despite the end of the law that specifically allowed the industry to operate in the state.

But even the author of the strike-everything amendment, Sen. Jack Harper, acknowledged it was a futile effort.

“The proponents never had the votes for this,” Harper, the chairman of the Senate Finance Committee, wrote in an e-mail that was forwarded to the Arizona Capitol Times.

Theoretically, lawmakers could use another strike-everything amendment to revive an extension for the payday loan industry or offer a floor amendment to another bill on a related topic.

From a political standpoint, though, the Legislature is unlikely to try again to save payday lenders. The industry is unpopular with voters, and lawmakers would risk making themselves a target in the upcoming election by continuing to push for an industry extension.

David Higuera of Arizonans for Responsible Lending, the group that spearheaded the campaign to defeat the payday industry-backed proposal in 2008, said, “I would think you would not want to piss off your constituents. And clearly Republicans and Democrats, in terms of the voters, are united in opposing continuation of payday lending at 400 percent (interest rate). So the public very clearly wants the 36 percent cap in effect.”

Sen. Debbie McCune Davis, a Democrat from Phoenix and a critic of the industry, said the industry has indicated “it’s the end.”

The decision to yank the bill from the committee agenda followed intensive lobbying from both sides.

Supporters of payday lenders said shutting down the industry would result in thousands of lost jobs and much-needed tax revenue.

Opponents argued that the 400 percent interest charged on payday loans were predatory and bad for the economy because consumers can get caught in a cycle of debt.

But the odds were stacked against the industry, which became clear when longtime opponents of government regulation decided consumers need protection from payday loans.

Sen. Ron Gould, a Republican from Lake Havasu City who is a member of the Finance Committee, said he was planning to vote against the striker that was supposed to be tackled in committee April 7. He had said his moral objections to the industry outweigh the benefits of free enterprise.

All three Democrats on the eight-member panel, including McCune Davis, also had made it clear they would vote “no,” which essentially doomed the effort.

Even if the strike-everything amendment would have advanced through the committee, the bill likely would have been rejected on the Senate floor or in the House.

Barry Aarons, a lobbyist who opposed the extension of the payday loan industry, said the strike-everything amendment was a backdoor attempt by a desperate industry.

“No one should be fooled by that,” Aarons said. “Notice also that there are no reforms, no controls, no prohibitions about multiple loans, no tracking system, nothing like that.”

Miller said the demand for short-term loans will not go away with the sunset of the payday industry. He said entrepreneurs would step up to fill that demand.

“Capitalism works and entrepreneurs who perceive a demand will work to fill that demand. What is going to be different is that the product is going to be a lot more complicated,” he said.

Details of the striker:

The strike-everything amendment to H2035 would have altered existing state law to allow all consumer lenders to collect a higher rate on fees, while limiting payday lenders to a maximum of 36 percent interest on loans, the same as other consumer lenders.

The amendment would have allowed lenders to collect a 7.5 percent origination fee on a loan of $1,000 or less. Existing law caps origination fees at 5 percent.

The amendment also would have removed a $75 cap on the amount a lender can collect as an origination fee, and it would have allowed lenders to charge a $10 fee for preparing documents and obtaining credit reports.

If the amendment had been attached and the bill had passed, for example, a $400 loan would have cost a consumer as much as $52 in fees, including $12 in interest, if the loan were paid back within a month.

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Capitol Media Services reports:

Lobbyist is unable to corral votes to save industry in AZ

PHOENIX – Payday lending will be gone in Arizona in less than three months, despite another attempt to keep it alive.

Industry lobbyist Lee Miller said late Tuesday that he does not have the votes for a measure to allow continued lending above the 36 percent annual cap on interest that now exists for every other kind of loan.

Even a last-minute compromise that would have trimmed the fees fell flat.

With state lawmakers interested in ending their session this month, he said time had simply run out.

That means the special law allowing payday lending will be repealed automatically on June 30.

What that leaves for customers of payday lending is unclear.

Sen. Debbie McCune Davis, D-Phoenix, a key foe of the industry, said she believes other lenders will step up to fill the void. She said they can operate under the 36 percent “usury” cap.

Miller said he’s not convinced that those who now use payday loans will continue to find it easy to borrow money. He said the reason payday lenders have thrived - there are about 650 outlets in the state – is that some people have no other alternatives.

Running out of time, Miller had offered a deal: The lenders would live within the interest cap. But they wanted to charge an “origination fee” of up to 7.5 percent of the loan, plus a one-time $10 document-preparation fee.

Miller said he could not guarantee the votes for even that plan. And it was an open question whether Gov. Jan Brewer would sign the measure.

McCune Davis rejected Miller’s argument that the lack of any competitors proves there are no commercially viable alternatives to payday lending.

“As long as payday lenders are out there, they literally suck up all the oxygen,” she said. She said credit unions and banks will fill the gap, at least for those who have or establish relationships with them.

Miller said some payday-loan stores are likely to survive beyond June 30. He said some are able to make money in other ways, including cashing checks and operating as agents for the Motor Vehicle Division.

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The AP reports:

The payday loan industry’s efforts to win legislative approval to keep operating in Arizona are over now that a legislative committee has canceled a planned hearing amid a lack of support, the industry’s chief lobbyist said Tuesday.

“Nobody wants to talk about the lending business anymore,” lobbyist Lee Miller said.

Payday lenders charge fees that amount to interest rates above 400 percent on an annual basis, but the provision of a 10-year-old state law allowing them to operate expires June 30.

After two failed attempts in the House and Senate this year, the industry’s last-ditch effort to continue operating in a modified form was scheduled for a hearing before the Senate Finance Committee on Wednesday.

But the bill was abruptly removed from the agenda Tuesday, and the committee’s chairman, Sen. Jack Harper, said “they never had the votes.”

The Arizona Legislature’s regular session is in its final weeks, and Miller said there’s not enough time to try other options.

Part of the industry’s difficulty at the Legislature stemmed from lawmakers’ reluctance to second-guess voters, who in 2008 soundly rejected an industry-backed ballot measure to remove the June 30 expiration.

“This is a big victory for consumers, and this is a testament to the fact that it’s our democracy,” said David Higuera, political director for Arizonans for Responsible Lending, which organized a campaign opposing the measure. “When people get involved, legislators listen.”

There are about 650 payday loan stores in Arizona. Executives have said some will stay open after June 30 and try make a profit from other lines of business, including auto title loans, check cashing and prepaid debit cards.

The industry employs about 2,500 people in Arizona, and executives have said many will lose their jobs if payday loans aren’t reauthorized.

Payday lending opponents say the industry preys on poor people in desperate situations. They say the industry depends on trapping borrowers in a cycle of debt where they continually renew their loan because they can’t afford to pay it off while still covering their expenses.

Industry proponents say the market has shown a need for short-term, small-dollar loans that aren’t generally available from banks or credit unions. They say the industry supports low-income families that otherwise wouldn’t have access to credit in an emergency.

Supporters say taking a payday loan is cheaper than paying a late fee or bouncing a check to pay for emergency costs.

To add your comments at KTAR.com, click here.

The Republic’s E.J. Montini weighs in:

There are instances when politicians can claim that they don’t know the will of the people. This is not one of those times.

This week, the big-money interests in the payday-loan industry will attempt to slip a bill through the state Legislature that would allow them to continue soaking the poor saps who get caught up in the sticky web of high-interest short-term loans.

With the help of some willing lawmakers, supporters of the payday-loan industry are using a “strike everything” amendment to introduce and attempt to quickly pass a bill that would allow them to continue operating in Arizona.

We shouldn’t even be having this discussion.

Lawmakers know EXACTLY how Arizonans feel about this.

In 2008, voters rejected the payday-loan industry’s attempt to continue its use of exorbitant fees and interest rates, in spite of an industry-sponsored ad campaign that spent about $15 million trying to convince us otherwise.

The proposition was defeated 60 percent to 40 percent, losing in every Arizona county.

End of story, right? Wrong.

Since then, the industry has hired former state Attorney General Grant Woods as well as a high-profile lobbying firm to rescue them. One of the ways such things happen is during the final days of a legislative session, when many proposals are finalized and there isn’t a lot of time for debate or discussion.

“We knew that this probably would happen,” said state Sen. Debbie McCune Davis, D-Phoenix, who was among those leading the fight against payday loans in the last election.

“The people behind this have a lot of money, and they are going to do everything they can to stay in operation in Arizona. I’d guess that they will come back with a proposal that claims to have all types of reforms that, when you get down to it, still is a bad deal for the consumer.”

Arizona didn’t have a payday-loan industry prior to 2000, and the state did just fine. Ten years ago, the Legislature approved a 10-year exemption to the state’s 36 percent cap on interest rates. The exemption is set to expire June 30.

Given the industry’s overwhelming defeat at the polls, you’d think this was a no-brainer.

Done. Finished.

But the opponents to payday loans now point to House Bill 2035, most recently titled “Consumer loans; origination fees.”

“Frankly, it shouldn’t even be coming up,” McCune Davis told me. “We (lawmakers) know exactly what voters think about this. We should honor their decision at the polls.”

Proponents will argue that the new proposal isn’t the same as the proposition rejected by voters in 2008. They’ll speak of reform. The proposal would allow lenders to charge an origination fee of up to 7.5 percent for loans up to $1,000. There’s also a $10 fee for preparing documents and other changes. Of course, the industry could have made all this the heart of the ballot measure in 2008. It chose not to and lost, and now is using a backdoor route through the Legislature.

This kind of thing happens a lot in government. Politicians are more than happy to trumpet the “will of the people” when they get elected. We’ve heard that a lot in Arizona, where there is a solid Republican majority in both houses and a Republican governor.

The mantra goes: “The people elected us; they must want us to pursue our agenda.”

And they’re right. Only now it’s THEIR turn.

If voters spoke loudly and clearly when they elected legislators, they spoke even more loudly and more clearly in rejecting payday loans.

So again, exactly why are we having this discussion?

Reach Montini at 602-444-8978.

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