One person’s microloan, given the wrong interest rate, can be another’s predatory lending practice.

In Arizona, voters have placed the payday loan industry clearly in the latter category.

Two-week loans can balloon in cost as fees on continually renewed loans compound and equate to an annual interest rate of 400 percent and more.

By the time borrowers default on the original loan, payday lenders don’t care — they’ve already recouped the original amount of the loan and more in fees.

Payday lending exists in Arizona only because lawmakers in 2000 agreed to a special exemption from the 36 percent interest cap for what are called “deferred presentment transactions.” That permits the $17.85 fee for each $100 borrowed for two weeks.

But lawmakers agreed to have that special law self-destruct after 10 years, a move designed to force them to revisit the issue. That 10 years is up June 30.

An industry-financed initiative to keep payday lending alive was defeated in 2008 by a 32-point margin. And the Senate Appropriations Committee just last month killed a similar plan.

This past week saw the industry furiously try to find a lifeline, proposing new types of origination fees that would still result in a cost of more than $70 to borrow $500 for just two months.

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

Also, the industry supports 2,700 jobs in Arizona and serves a working-class population that generally can’t get credit or cash for emergencies any other way.

But voters didn’t buy that argument in 2008, and neither do we in 2010. If payday loans were used only in emergencies, why do studies show that most borrowers are repeat customers who take out new loans every pay period?

The answer is obvious: The payment schedules are set up so that many low-income borrowers can’t handle the principal repayment in such a short, two-week borrowing window after shelling out for the high fees and normal living expenses, too. They are trapped in a cycle of debt as long as they are drawing paychecks. If they lose their job, many are plunged into bankruptcy.

If the scenario above sounds remarkably similar to recent subprime mortgage lending practices, that’s because predatory lending doesn’t differ much across industries. Those with the least money up front are offered more than they can ultimately afford to pay at current incomes or home values. The only way out of the trap is if you get a better-paying job or the housing market continues to soar and you can refinance. Recent years have shown that both of those outcomes for many have been false hopes.

The question can still be legitimately posed, however: Without a payday loan industry, where will the working poor without savings get cash for emergencies?

Before the advent of easy credit cards, household finance companies operated throughout the state and thrived under the 36 percent interest cap. Credit cards have now largely replaced such stores, and those might have to be what covers emergencies for the working class — most can get credit if they are employed.

No one, however, should be paying double-digit interest rates any longer than they have to. You can get good advice through a United Way collaborating agency, Consumer Credit Counseling of Flagstaff. Call them at (866) 889-9347 or visit their website at cccssouthwest.org.