Arizona law takes effect
July 8, 2010 | Arizona, customers, employees, industry, regulation | Comments (0)From the story:
Payday loan customers in Pinal County already are feeling the impact of the expiration on Thursday of a law allowing the lending practice beginning Thursday.
Under the change, lenders no longer will be allowed to set interest rates as high as 460 percent annually. A 10-year-old law allowing them to go above the 36 percent rate cap for other lenders expires today.
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The Community Financial Services Association of America, an industry trade group, says that although payday loans are expensive, when people are in need of short-term cash they are often glad to have the option available to them.
Many of those who use payday loans have limited alternative sources of credit such as pawn shops, bank overdraft protection, credit card cash advances and informal lenders, according to CFSA,
Efforts to eliminate payday lenders from communities do not address the need some consumers have for short-term credit, and lack of access to the loans could place customers at greater risk for bounced checks, disconnected utilities or lack of funds for emergencies such as medical expenses or car repairs, the organization said.
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