Published:
Judge Says No Time to Clarify Payday Lending Ballot Summary
PHOENIX, Aug. 27 /PRNewswire-USNewswire/ -- Superior Court Judge Sam Myers
ruled today that Secretary of State Janice Brewer does not have to clarify the
language summarizing a payday lending-industry backed measure that will appear
on the ballot this November. The ruling means that the essential effect of the
measure, which would provide payday lenders a permanent exemption from the
state's consumer loan cap of 36 percent and allow them to charge 400 percent
interest permanently, will go unexplained as voters mark their ballots on
election day.
Judge Myers said that the description of the ballot measure drafted by
Secretary Brewer was technically accurate, and that with only 50 words to
explain complex issues, choices have to be made.
However, the fact that voters will be choosing between 400 percent
interest and 36 percent interest should have been made clear in the official
language, said Senator Debbie McCune Davis, chair of Arizonans for Responsible
Lending, No on 200. (Interest rate chart follows release.)
"We are disappointed the Secretary of State will not be required to give
voters the crucial piece of information they will need to make an informed
choice," said Davis.
The committee pushing the ballot measure is fully funded by the payday
lending industry, which has spent $8.75 million to push their initiative,
according to a report filed with the Secretary of State's office on August 21.
The official title on the ballot, the Payday Loan Reform Act, also threatens
to mislead voters.
"The payday lending ballot measure is no reform at all. It threatens our
pocketbooks, the health of our economy, and the integrity of our ballot
initiative process," said Senator McCune Davis.
Federal regulators clarified that the Truth in Lending Act covers payday
lenders soon after the 2000 law granting them an exemption fromArizona's 36
percent interest rate cap was passed. Since then, payday lenders have been
required to disclose that their interest rates are 391 percent on a typical 2-
week loan.
"The Truth in Lending Act, the law of the land for forty years, requires
that the cost of credit be stated as both a dollar finance charge and as an
annual percentage rate," said Jean Ann Fox, the director of financial services
for the Consumer Federation of America, a resident ofPrescott, Arizona and a
steering committee member of Arizonans for Responsible Lending, No on 200.
"The purpose of the Truth in Lending Act is to enable consumers to make
informed choices about credit based on an apples-to-apples comparison,
regardless of the mix of fees and interest used by lenders to hide the true
cost of loans," said Fox. "Lenders from pawn shops to mortgage brokers are
required to clearly disclose the APR to inform consumers."
"It's now up toArizona citizens to inform themselves about what this
ballot measure really means," said Ken Clark, campaign manager for Arizonans
for Responsible Lending, No on 200. "I think they will, given the independence
and critical thinking that is characteristic of our state. It's just a shame
that the Secretary of State didn't put the interest rate right there on the
ballot, as our coalition requested weeks ago."
Dozens ofArizona groups have joined the Vote No on 200 coalition, and
will urge their members to reject the false reform and let the 2000 law sunset
as scheduled in 2010.
"Payday lenders will be legally allowed to operate inArizona after the
interest rate exemption expires in 2010 as long as they keep their interest
rates under 36 percent, as other lenders already must do, or they can close up
shop if they can't survive on that - the choice is theirs," said Senator
McCune Davis. "The point is, 400 percent interest rates must end, and voters
should reject Prop 200."
THE APR FOR PAYDAY LOANS SHOULD PROP 200 BE APPROVED,
BASED ON FEE CAP OF $15 PER $100
(APR varies according to loan term, 14 days is typical)
Loan Term (in days) APR
5 1095%
6 913%
7 782%
8 684%
9 608%
10 548%
11 498%
12 456%
13 421%
14 391%
15 365%
16 342%
17 322%
18 304%
19 288%
20 274%
21 261%
22 249%
23 238%
24 228%
25 219%
26 211%
27 203%
28 196%
29 189%
30 183%
31 177%
32 171%
33 166%
34 161%
35 156%
Paid for by Arizonans for Responsible Lending, No on 200. Senator Debbie
McCune Davis, Chair
Major Funding by United Food and Commercial Workers Local 99, Phoenix AZ,
Center for Responsible Lending, Durham NC, Service Employees International
Union, Washington DC, and Strategic Issues Management Group, Tucson AZ;
Additional Support from Arizona AARP
www.200isNoReform.com * (602) 561-5881
SOURCE Arizonans for Responsible Lending
Copyright © 2009, PRNewswire
Copyright © 2009, NewsBlaze,
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