Exposing the Industry’s Lies

In 2008, the payday lenders spent $14.8 million dollars trying to convince Arizona voters to let them charge 400% interest rates forever, by hiding behind the word “reform.”  They promised “reforms to benefit consumers”… “reforms to crack down on the bad apples”… “reforms to put unscrupulous lenders out of business,” etc.

Of course, with all that money, they never told voters that the only purpose of their initiative was to REMOVE THE 2010 SUNSET in the law that enables them to charge triple-digit interest rates in the first place.

Once their enabling law expires on June 30, 2010, they will have to lower their interest rates to 36% APR — to abide by the state’s Consumer Loan Act — or leave Arizona.

During the 2008 campaign, when their arguments that payday loans were a “needed service” fell flat by early October, they switched gears and began running ads that viciously attacked the industry as “unscrupulous lenders” — attempting to confuse the voters into voting “Yes” when they really meant “No,” and thus allowing them to survive and continue charging 400% interest…

Payday Lenders Launch Attack Ad… on THEMSELVES

KPHO Phoenix – Oct 27, 2008

When asked why the payday lenders’ ads are not more straightforward in terms of honestly describing what Prop 200 would do, payday industry lobbyist Stan Barnes said,
“Campaigning is [pause] different than that.”

By “that,” Barnes must mean “speaking truthfully.”

Their ploy failed.  The voters saw through the snow-job and voted down the payday lenders and their 400% interest rates by a margin of 60 to 40 percent, including defeating their initiative in every county across Arizona.

In 2008 the payday lenders tried to bamboozle you.

They tried to hoodwink you.

They just plain lied to you!

And guess what??  They’re trying to do it again!

Since they couldn’t convince the voters to let them stay, they have hired every lobbyist that money can buy , to try to circumvent the voters altogether — just like they currently circumvent Arizona’s usury law.

On their payroll so far?

Former Arizona Attorney General Grant Woods — Co-Chair of Gov. Brewer’s 2010 election campaign

Chuck Coughlin and Doug Cole of “HighGround,” who will run the governor’s 2010 campaign

Lee Miller

Mario Diaz

Stan Barnes

Mike Vespolli

and the list goes on…


Here’s an example of the “reforms” they peddled in 2008, that they’re peddling again now in the Legislature.

(click on each thumbnail below to see the full image)

Industry Lies and Spin
Mailed October 3, 2008:


Luckily, TV news outlets covered the truth:

12 News, Phoenix: Payday lenders’ motives questioned on Prop 200:
Oct 23, 2008

“Opponents say the massive spending by the payday lending businesses is proof that the November ballot initiative doesn’t offer real reform.”


And newspapers across the state did their part to inform voters about the deception behind the ‘Yes on 200′ campaign:

Arizona Daily Star (Tucson) – October 8, 2008 – Front Page, Business
Ad Watch: The Star’s ongoing evaluation of the record vs. the rhetoric in campaign ads

“Today: We look at a series of ads for Yes on Proposition 200: [...]

The statement that Proposition 200 would ‘lower payday loan fees’ is true. But voting against Proposition 200 would cause the fees to drop even more. The current maximum annualized interest rate on two-week [payday] loans … is 459 percent. If Proposition 200 passes, that would be reduced to 391 percent.

A “no” vote on Proposition 200 would uphold the current law regulating payday lenders, including their termination date in 2010. Under current law, payday lenders’ exemption from Arizona’s Consumer Loan Act ends July 1, 2010, at which point they would be forced to lower their interest rates to 36 percent in order to stay in business.”


Arizona Daily Sun (Flagstaff) – October 15, 2008 – Front Page
Ad watch: Payday loan ‘reform’: Fox guarding henhouse

The industry wants to ‘protect’ consumers, but it doesn’t disclose that Prop. 200 means locking in a maximum interest rate of 391 percent.

Payday lending reform, on paper, sounds like a good thing.

Until you find out the reform is being touted by the industry itself. Unable to find a legislative compromise to extend current payday lending practices beyond 2010, the payday lending industry has spent nearly $12 million in an attempt to get Arizona voters to back their referendum, known as Prop 200.

The direct mail and newspaper ad asserts that the payday lending industry is in urgent need of reform in order to protect Arizona consumers. Opponents call the ad misleading and the proposition written solely to benefit the payday loan industry, not consumers. [...]

Now, it’s up to all of us.  We must continue to stand up for the TRUTH.  Predatory payday lending HURTS ARIZONANS!