During the November 2008 election, the payday industry tried to pass Proposition 200 in Arizona – an initiative that would have allowed the payday lenders to bleed hard-working Arizonans with 400% interest rates. Forever.

Arizona voters said “No!” to the payday lenders – loud and clear – rejecting Proposition 200 by an overwhelming margin and demanding that the sun set on the payday lenders’ special deal in Arizona.

LET THE SUN SET ON PAYDAY LENDERS

The voters’ mandate is clear.  In every district, a majority of voters rejected Prop 200, calling for an end to 400% interest rates and rebuffing fake reforms.  By defeating Prop 200, voters halted payday lenders’ attempt to repeal a provision in the Arizona Consumer Loan Act requiring them to cap their interest rates at 36 percent, like other consumer lenders.  The voters have spoken; the sun must set on the payday lenders’ special deal.

PAYDAY LOANS TRAP BORROWERS

Payday loans, which charge 400% interest, are structured to trap the borrower. Payday loans trap borrowers in long-term debt, with the average borrower needing to pay back nearly $800 on a $300 loan, after multiple loan renewals. That’s why to date, 15 states and the District of Columbia have ended predatory payday loans at triple-digit interest rates, enforcing interest caps of 36% or less.

In 2006, Congress outlawed payday loans above 36% interest to active duty members of the military, a measure supported by both John McCain and Barack Obama.

THEY TRIED TO BUY YOUR VOTE.  THEY LOST.

Out-of-state payday lenders spent nearly $15 million trying to buy your vote for Prop 200.  They sought to protect the $149 million a year they take from Arizonans in fees stripped from trapped borrowers. They poured millions of dollars into misleading advertisements and propaganda to promote Prop 200 – which would have legalized their predatory interest rates forever.

Not only did they try to buy your vote, they tried to fool you, too! They tried to hide behind clever negative ads… ads that ran day and night for weeks.  The voters saw right through it:

Payday Lenders Launch Attack Ad… on THEMSELVES

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“Bad apples”???  The WHOLE INDUSTRY is BAD APPLES!

The TRUTH is, the payday lenders pushed Prop 200 to try to repeal the Arizona law that will force them to cap their interest rates at 36% beginning in 2010.

The TRUTH is, we defeated Proposition 200 with over 1.2 million “No!” votes and a statewide coalition for more than 200 organizations and elected officials from both parties.

We DEFEATED Prop 200, so the payday lenders’ special deal must expire in 2010 as scheduled.

We DEFEATED Prop 200, so the payday lenders must either cap their rates at 36%, like every other consumer lender, or leave the state beginning July 1, 2010.

DON’T TRUST THE PAYDAY LENDERS TO REFORM THEMSELVES
Like their business, their ballot measure was built on deception. They wanted voters to think Prop 200 would reform payday lending. In reality, Prop 200 would have allowed them to charge 400% interest rates forever AND gain electronic access to borrowers’ checking accounts.

NOW, we must remain vigilant to make sure the payday lenders don’t succeed in subverting the will of the voters.

TRIPLE-DIGIT INTEREST RATES MUST END!!