Arizona deadline tomorrow
June 30, 2010 | Arizona, industry | Comments (0)The AP sums it up:
Payday lenders charging triple-digit interest rates will no longer be allowed to operate in Arizona after a 10-year-old law expires Thursday.
Lending companies failed to persuade voters or the Legislature to extend the provision allowing the high rates.
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Starting July 1, loans with annual interest rates exceeding 36 percent will be illegal in Arizona. Fifteen other states and the District of Columbia already use rate caps to limit payday loans, according to the Consumer Federation of America, a nonprofit consumer advocacy group in Washington, D.C.
The day after tomorrow
June 29, 2010 | Arizona, industry | Comments (0)No, not the cheesey post-nuclear war movie of the early ’80s, but the end of payday lending in Arizona. From the story:
Payday loans with interest rates topping 400 percent become illegal in Arizona at midnight Wednesday, after voters rejected a 2008 ballot measure to extend the industry’s 10-year authorization to operate.
State Senator Debbie McCune-Davis of Phoenix helped defeat last-ditch efforts to reverse the election results in the legislature.
“Voters were given the opportunity to make a decision about whether payday lenders continue to operate at outrageously high interest rates or change their practices to come under the 36 percent usury law. The voters were very clear about it, and now it’s happening.”
McCune-Davis calls ending payday loans “a victory for the people of Arizona.” Payday lenders say they can’t cover operating costs with a 36 percent rate cap, and several payday loan stores have already closed.
McCune-Davis missed the recent study by National Consumer Law Center saying that alternatives are NOT cheaper.
Lenders say they were providing a necessary service, but McCune-Davis says people have other options for small, short-term loans.
Arizona’s economy
June 28, 2010 | Arizona, industry | Comments (0)I hope the legislature doesn’t start complaining about job losses. From the story:
With the law that allows extremely high-interest loan expiring in just a few days, dozens of payday-loan stores throughout the Valley are closing their doors.
Update Arizona
June 28, 2010 | Arizona, industry | Comments (2)New law takes effect on Thursday. From the story:
Some payday lenders in Arizona have already shut their doors and more are expected to follow when a law authorizing their high-interest loans expires at the end of the month.
Starting Thursday, the state no longer will allow payday-loan operators to set interest rates as high as 460% annually. A 10-year-old law that allowed them to charge above the 36% annual rate cap imposed on other lenders will expire.
Lee Miller of the trade group Arizona Consumer Financial Services says smaller operators are expected to close, while large companies will try to find new products for Arizona customers.
Can’t we all just get along?
June 22, 2010 | Arizona, industry | Comments (0)Payday lending becomes issue in Arizona AG race.
Options in Arizona?
June 15, 2010 | Arizona, federal legislation | Comments (0)From the CreditLoan blog:
Though more than 100 payday lending businesses will be prohibited from operating in the state, some lenders are considering converting to auto-title loans or check cashing operations, which may be legal under Arizona law. Some have contacted attorneys to determine their options under the new regulations, according to the newspaper.
We’ve heard this before
June 14, 2010 | Arizona, alternatives, industry | Comments (1)These are the “alternatives” recommended to people after payday lending ends in Arizona:
• Consult family and friends — Ask loved ones if they are willing and able to help out in a tough situation with a short-term loan. Always put these types of loans in writing, specify the time period in which the loan will be repaid and offer to pay interest. This will help ensure trust and reliability.
• Apply for Credit Union Loans — Most credit unions offer short-term loans like Personal Assistance Loans or Quick Loans. These are typically unsecured, fixed-rate loans up to $500. Interest rates vary from 12 to 20 percent.
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• Seek Social Service or Government Assistance — Check out Govbenfits.gov. It offers information on more than 1,000 benefit and assistance programs. Visitors can complete a free, confidential questionnaire to find out which local benefits they are eligible to receive. Consumers in need can also find free assistance at food banks, churches and charitable social service organizations.
*Sell Personal Items of Value — Consumers can sell items of value to a pawn shop or host a yard sale. Personal items can also be sold online through eBay or craigslist. When selling online, be sure to thoroughly review security guidelines.
So why not let payday loans compete with these options?
Arizona update
June 9, 2010 | Arizona, industry, regulation | Comments (0)AG says payday lenders should follow new law…as if they wouldn’t.
Silliness in Arizona
June 6, 2010 | Arizona, industry | Comments (0)Somehow payday lending has become an issue in a congressional race.
Deep thought
April 13, 2010 | Arizona, customers, industry, regulation | Comments (1)There are obvious limits to the abilities of some editorial writers to understand economics. From the East Valley (AZ) Tribune:
…lawmakers are right to send payday lenders packing. There has to be better way, whether it be rules or market forces that put the loans more in line with traditional loan rates and terms.
There has to be a better way? That’s some answer to people who are desperate for short-term credit.
