As of 2008 state legislation payday lending in Arizona is considered prohibited. However, new proposal has recently been discussed in the Senate and it is the one that suggests some sort of the high-interest credit variation to get back to the state.
Surely, the subject of instant payday loans has always been very tricky (across the entire state). In Arizona proponents of such high-interest loans have tried their luck some time now and failed due to various reasons; however, this year they seem to have been able to gain at least some share of success.
The proposal bears the name of “Consumer Access Line of Credit”, made by Sen. Debbie Lesko to House Bill 2496.
- It presupposes the offering of a small cash loan option with a maximum APR of 164% and a maximum loan amount of $2,500.
- This equals to 0.45% a day of interest for a short-term loan.
- The amendment also suggests that all lenders should run a compulsory check of their perspective customers through a statewide database in order to make sure that the entire amount of a loan does not exceed $2,500.
- Thus, credit history check will be required.
- The loan term offered is one year.
- Repayment plans and freezing of interest rates for struggling borrowers are also required.
The proposal has got a number of opponents as well as proponents.
Democrats call it predatory lenders coming back to Arizona,and they are also backed by Republicans as well.
The old argument is about the nature of online payday loans, as the initial prohibitive measures were meant to protect customers from getting into debt due to high interest rates. However, many people with bad credit history were left with basically no option for any emergency cash instead.
In this respect the proposal lobbyists appeal to the fact that all borrowers should have the choice, the right and access to fast payday loans options with no regards to the state of their credit standing. They should also have an option to improve their credit by making timely payments.
Proponents see payday loans as a more attractive and also more beneficial offer for borrowers than car title and pawn shop loans.
Opponents, however, see it as a threat for low-income residents and they are willing to stand their point.
In 2008 payday loans were prohibited in the state as 60% of voters were against high-interest lending in the state. At the present moment the panel voted 6-4 and the proposal is going for consideration to the full Senate. So, we’ll see.