The opponents of the Payday Loan Reform Act report that the payday loan industry has sent a staggering $8.7 million to Arizona to fund the campaign to keep payday lenders alive in Arizona.
Here’s the press release from Stop Payday Predators:
PAYDAY LENDERS SPENDING MILLIONS TO LEGALIZE
LOAN SHARK INTEREST RATES IN ARIZONA
While national payday lenders push 400 percent interest in Arizona,
A NO vote on Prop 200 would secure state’s 36 percent interest cap
PHOENIX – A trade group representing national payday loan chains is targeting Arizona this fall in an effort to convince voters that legalizing 400 percent interest rates is “reform.”
The multi-billion dollar payday loan industry has so far funneled more than $8.7 million to an Arizona committee set up to push their ballot measure, called the “Payday Loan Reform Act,” which would legalize 400 percent interest rates in the state forever.
No national payday lending chains are headquartered in Arizona. The millions in lobbying and marketing funds to push Prop 200 appear to be coming from out-of-state payday lenders through their national trade group, the Community Financial Services Association.
“This money is coming from big payday chains in states like South Carolina, Texas and Ohio, chains that want permanent access to Arizonans’ pocketbooks,” said Jean Ann Fox, director of financial services for the Consumer Federation of America, a resident of Prescott and a leader of the Stop Payday Predators, No on 200 Campaign. “Every penny of the industry’s millions for this political campaign was made off the backs of hardworking people struggling to make ends meet. Folks are trapped in the high-cost, long-term debt of payday loans and the industry is pushing Prop 200 to perpetuate this situation indefinitely.”
With $8.7 million in the bank, the Yes on 200 Campaign is already the second most expensive ballot measure campaign in Arizona history, behind only the 2002 Indian Gaming initiative. The payday lenders’ nearly $9 million investment to pass 400 percent interest rates is almost three times what the governor’s race cost in 2006 and vastly outweighs the $3.8 million payday lenders recently spent in Virginia to stop a popular movement for a 36 percent interest rate cap.
At their current rate of pouring money into Prop 200, the industry will have spent $15 million or more by Election Day, exceeding the amount industry lobbyists spent nationwide on contributions to statewide candidates, legislative candidates, and political parties from 2000 through 2006. (www.followthemoney.org)
“I don’t believe that Arizona voters will be fooled by out-of-state special interests spending millions of dollars to try to buy their votes,” said Senator Debbie McCune Davis, chair of the widely endorsed NO on 200 Committee. “People know at a gut level that 400 percent interest rates are bad for the consumer and bad for the economy. I haven’t met a single person, short of the payday loan lobbyists, who believe Arizona is a better place as the result of the proliferation of payday lenders. We must return to economic sanity by voting no on Proposition 200 and reinstating the 36 percent interest cap in the Arizona Consumer Loan Act.”
Senator Dick Durbin (D-IL), the Senate Majority Whip, introduced a 36 percent cap last week that would extend the protections Congress passed for US military families to other citizens, mostly working and retired, who are vulnerable to being trapped in predatory payday loans.
“The Durbin bill would not solve all of the myriad problems in the credit market, but would stop the bleeding from payday and other predatory lending to the tune of billions of dollars per year,” said Fox. “We’re talking about interest earned by leaning on cash-strapped consumers who, without this debt trap, would be better able to meet their financial obligations, build up savings, and contribute to the health of the economy.”
“I hope we have learned a lesson from the housing crisis that making loans to people without establishing their ability to repay, and allowing exorbitant interest rates, jeopardizes our overall economic stability,” said McCune Davis. “Sanctioning payday loans at 400 percent interest rates is simply unacceptable. That’s why voters need to reject Prop 200.”