Payday Loan Foes End Drive

Signatures fall short of ballot requirement

Matthew Benson
The Arizona Republic

Leaders of an initiative aimed at shutting down Arizona's payday-loan industry have withdrawn their proposal, saying they failed to collect enough signatures to make the state's November ballot.

The chief legislative backers for the group, Stop Payday Loans, say they'll instead focus their attention on defeating an initiative led by the payday-loan industry that would include some consumer-interest reforms but also allow the industry and its more than 600 branches to operate in perpetuity in Arizona.

A provision in state law enabling the payday-loan industry is scheduled to end in 2010, barring an extension.

Chief legislative backers for Stop Payday Loans - Rep. Marian McClure, R-Tucson, and Sen. Debbie McCune Davis, D-Phoenix - say they managed to collect only 30,000 signatures for their effort. More than 153,000 are needed by July 3 to qualify for the ballot.

But both legislators are continuing their campaign against payday-lending practices that they term "predatory."

With loan extensions and additional fees, annual interest rates from payday lenders can reach 460 percent annually.

That rate would be capped at 391 percent under the industry-led initiative, which also would prohibit costly loan extensions and require the state to create a database so lenders could ensure that prospective borrowers had no outstanding debts with other payday lenders.

The measure is backed by a group calling itself Arizonans for Financial Reform.

Lobbyist Stan Barnes, who's leading the initiative campaign, said the failure of McClure and McCune Davis' effort speaks to voters' desire to reform rather than repeal the payday-loan industry.

But McClure called those proposed reforms "window-dressing," saying the industry's true intent is simply to repeal the 2010 sunset date.

Source:
http://www.azcentral.com/arizonarepublic/local/articles/0617payday-loan0617.htm