Arizona Cash Advance Reform, Proposition 2020. etails associated with the proposition

Arizona Cash Advance Reform, Proposition 2020. etails associated with the proposition


Arizona Proposition 200, also referred to as the pay day loan Reform Act, had been regarding the November ballot in Arizona being a citizen-initiated amendment that is constitutional. It absolutely was beaten.

The payday-loan initiative had been mainly supported by the payday-loan business into the continuing state, and had been less limiting compared to the avoid payday advances Initiative, sponsored by Rep. Marion McClure, D-30, and Sen. Debbie McCune Davis, D-14. That measure had been withdrawn in early June whenever perhaps not signatures that are enough being gathered to qualify it for the ballot. 1

Election results

Text of this effort

The 100-word description filed with all the Arizona Secretary of State’s workplace because of this initiated state statute checks out:

Arizonans use payday lending services each and every day to meet up with unexpected costs and emergencies that are financial. The payday financing industry is placed become eradicated in addition to Arizona Legislature will not enact reforms to profit borrowers while preserving this essential option that is financial. This measure provides dramatic reform that is pro-consumer payday lending and protect customer option. It provides a significant price cut, eliminates rolling-over major to extend that loan, produces a repayment plan free of charge to clients that can not satisfy their responsibilities, and inhibits a debtor’s capability to get one or more loan at any given time. 3 4


The payday financing industry had been an $85 billion industry providing you with short-term loans, that have been often secured by having a check postdated to your debtor’s next payday. The attention price within the lack of legislation had typically worked off to on average $15 per $100 lent for a loan that is two-week. The interest that is high had been exactly just exactly what had resulted in legislative tries to control the industry. The training had been illegal in fifteen states in the right period of Proposition 200. In 2008, along with Prop 200, Ohioans voted on payday financing in Ohio Issue 5. In Ohio and Arizona together, the amount of payday-lending branches outnumbers the Starbucks and McDonald’s outlets combined. 5

Information on the proposition

Under this proposal:


“Arizonans for Financial Reform” had been supporting this effort. It had been filed in reaction into the avoid payday advances Initiative, which will eradicate all pay day loans.

In line with the site of some other affiliated help company, “Reform Arizona pay day loans,” 6 , tens of thousands of Arizonans usage pay day loans responsibly to pay for unforeseen day-to-day costs. But, the website warns, the avoid pay day loans Initiative would eliminate this easy monetary choice in Arizona. Supporters for this measure argued that eliminating payday advances totally would harm numerous families economically, through higher banking fees, bank card late costs, and energy reconnect costs. 6

Stan Barnes, a lobbyist and consultant to Americans for Financial Reform, a committee funded by the payday-loan industry, supported this measure and stated the presssing problem boils down to customer option.

“Payday-lending stores occur because customers into the world that is real rational choices about borrowing cash short-term, plus in numerous circumstances, pay day loans will be the most inexpensive selection for some people that have a crisis or unexpected cost they need to cope with,” Barnes said.

Supporters included that closing all payday advances in Arizona would also eradicate significantly more than 2,500 Arizona jobs. 6

Supporting arguments

Donors to Proposition 200

Because of the end of July, supporters of Prop. 200 had provided about $8.7 million up to a campaign committee arranged to market the effort. The Arizona Republic stated that “nearly every cent. happens to be donated by – guess who? – a trade team representing payday lenders: the Arizona Community Financial Services Association.” 8


The no that is website 200 : It really is No Reform At All ended up being created in opposition for this effort.

Rep. Marian McClure (R-Tucson), chairwoman of this avoid Payday Loans Initiative campaign, stated that cash advance reform, like this pay day loan Reform Act]], is nothing but “window dressing.” 9

The Democratic Party of Arizona endorsed the avoid pay day loans effort and argued that payday advances are “by definition predatory and benefit from economically susceptible Arizona families by trapping them in unending rounds of financial obligation.”

Opposing arguments

Main arguments proposed versus Proposition 200 included:


Pay check loan providers would not disappear completely therefore effortlessly after the measure’s defeat, because they attempted to convince lawmakers to allow them remain in company through the autumn of 2009. In accordance with reports, the industry hired state that is former General give Woods to express them in their efforts. Based on Woods, after learning a proposition by the industry, he was convinced there is an accepted place into the state of payday loan providers. 11

Road to the ballot

On June 23, its supporters switched much more than 265,000 signatures to your Arizona Secretary of State.

Ballot name lawsuit

Arizonans for Responsible Lending filed case throughout the ballot language. Based on the lawsuit, voters might unknowingly accept a limit of 400 per cent rates of interest for pay day loans in the event that Secretary of State didn’t make clear the language that is descriptive of 200 in the November’s ballot.

Superior Court Judge Sam Myers ruled Aug. 27, 2008, that Secretary of State Janice Brewer didn’t have to explain the language. Judge Myers stated that the description for the ballot measure drafted by Secretary Brewer ended up being theoretically accurate, and therefore with just 50 terms to describe complex problems, alternatives need to be made.