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That means the special law allowing payday lending will be repealed automatically on June 30.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