Comments on: Meanwhile in Arizona… http://paydaypundit.org/2008/11/01/meanwhile-in-arizona/ News and Information About The Payday Lending Industry Fri, 18 Jun 2010 21:33:31 -0700 http://wordpress.org/?v=2.9 hourly 1 By: Jon Schultz http://paydaypundit.org/2008/11/01/meanwhile-in-arizona/comment-page-1/#comment-2101 Jon Schultz Sat, 01 Nov 2008 18:17:10 +0000 http://paydaypundit.org/?p=1820#comment-2101 It's too bad that anti-payday-loan sentiment in Arizona was so high that the industry had to offer such a restrictive proposition just to survive. Not only does the fee restriction of Prop 200 violate freedom of commerce, the right of independent merchants and service providers to set their own prices, but there needs to be a loan product for employed people without good credit who need an emergency loan and who know from the beginning that they won't be able to repay the entire loan on their next payday. Many of the problems associated with payday loans are due to the fact that the exemptions to state usury laws which allow payday lending in various states are simply too narrow. If borrowers had the option of an installment payday loan - whereby they would leave several checks that would be cashed on successive paydays - then they wouldn't need to go from store to store to take out one loan to pay back another. And since the lender wouldn't have to process individual rollovers and would be earning interest for a longer period of time, such installment payday loans could be offered at a lower APR than a two-week payday loan. Some quasi-legal Internet sites offer installment payday loans. It is time for politicians and activists to get their power-hungry hands off the free market so people can be offered the loan products which work best for them. Consumer protection should simply ensure that such products are advertised and presented clearly and honestly and that debt collection laws are strictly adhered to. It’s too bad that anti-payday-loan sentiment in Arizona was so high that the industry had to offer such a restrictive proposition just to survive. Not only does the fee restriction of Prop 200 violate freedom of commerce, the right of independent merchants and service providers to set their own prices, but there needs to be a loan product for employed people without good credit who need an emergency loan and who know from the beginning that they won’t be able to repay the entire loan on their next payday. Many of the problems associated with payday loans are due to the fact that the exemptions to state usury laws which allow payday lending in various states are simply too narrow.

If borrowers had the option of an installment payday loan – whereby they would leave several checks that would be cashed on successive paydays – then they wouldn’t need to go from store to store to take out one loan to pay back another. And since the lender wouldn’t have to process individual rollovers and would be earning interest for a longer period of time, such installment payday loans could be offered at a lower APR than a two-week payday loan. Some quasi-legal Internet sites offer installment payday loans.

It is time for politicians and activists to get their power-hungry hands off the free market so people can be offered the loan products which work best for them. Consumer protection should simply ensure that such products are advertised and presented clearly and honestly and that debt collection laws are strictly adhered to.

]]>