The payday loan industry is known for preying on people. People get caught in debt when they use payday loans; they are not able to pay off the principal amount ,let alone the interest.
“When people use payday loans, they get caught in a cycle of poverty, said Rep. Robert Meza, D-Phoenix.
“These people have voiced concern about the payday loans for years,” added Meza, who is a member of the House Banking and Insurance Committee.
However, Arizona House Bill 2161, which was scheduled to be heard by the House Banking and Insurance Committee on Monday, attempted to reform this awful industry and failed. In an 11th-hour political move House Majority Whip Andy Tobin, R-Paulden, pulled the bill.
Voters rejected the idea of Proposition 200, which dealt with payday loan regulations, in the 2008 election cycle.
“The regulations that are being included in this bill are far different from the ones presented to the voters,” said Rep. Nancy McLain, R-Bullhead City, who is chairwoman of the House Banking and Insurance Committee.
Apparently voters and legislators didn’t buy into her rhetoric. According to Arizona Daily Star, Tobin could not find a single co-sponsor for the bill. Not even McLain was willing to co-sponsor it.
Legislators realized the reforms the bill promised were nothing but smoke and mirrors as the state did not have the resources to carry them out.
“The problem is that there aren’t enough people to audit the payday loans. There is no one to see if they are [monitoring lenders] properly,” said Meza.
With the pulling of this bill, lenders are set to die a death that will leave few weeping.
“They have been here nine years, and they have never reinvested in Arizona and they never plan to,” Meza said.
Lenders take advantage of people in poverty and hurt the community by trapping people in debt.
“If it went to the ballot again [voters] would reject it again,” Meza said.
However, the fight will not be over until July 1. It is possible lenders and lobbyists will attempt to find another way to disguise legislation that helps payday loan companies.
If such legislation attains Gov. Jan Brewer’s signature, Arizona will have an important battle. That is why we must remain vigilant and let the sun set on payday loan lenders.
Reach Andrew at andrew.hedlund@asu.edu
