In 2008, the voters of Arizona defeated Prop. 200, a ballot measure from former state senator and lobbyist Jonathan “Payday” Paton and the predatory lending industry to extend the state authorization for payday loans in Arizona.
This did not end predatory lending in Arizona, however. The payday loan centers quickly converted to auto title loan centers, something still authorized under Arizona law. The predatory lending industry has tried several times since 2008 to revive certain forms of predatory lending in Arizona, but each time they have been thwarted — until now.
Tea-Publicans in the House narrowly approved a strike everything amendment to SB 1316 (.pdf) on Monday, authorizing high interest predatory flex loans. Arizona House approves 204-percent ‘flex’ loans.
Laurie Roberts of The Republic writes, Roberts: House throws poor Arizonans to the sharks:
Or at least, the ungodly profits to be made off of them.
The Republican-controlled House on Monday approved Senate Bill 1316, allowing the payday loan industry to come into Arizona and offer “flex loans” with interest rates of up to 204 percent.
Rep. Brenda Barton, R-Payson, urged her colleagues to kill the bill, saying there are lower cost alternatives for someone who quickly needs money.
“This legislation is moving across the nation by a group of investors to make changes in all states …,” she warned. “This is being pushed hard, folks.”
Rep. Jay Lawrence, meanwhile, took up the investors’ talking points, explaining that it’s all about giving options to desperate people who have none. The Scottsdale Republican pooh-poohed worries that a desperate person who takes out a $2,500 flex loan might be all the more desperate two years later, when he owes $10,000 on that loan.
“No one has talked about the individual, the one little guy sitting buried in illness, a son or daughter who ends up hospitalized, a wife who needs an operation,” he said. “Nobody’s mentioned that individual. You’re just talking about interest rates.”
No, we’re talking about real money.
Me? I’m thinking of renaming him St. Lawrence, for his abiding concern.
Lawrence is among 12 House members who took money late last year from the Financial Freedom PAC, the pay loan industry that is pushing this bill.
Clearly, it was money well spent as all 12 of them voted aye and every one of those votes was needed, given that the bill got the minimum 31 votes needed to pass.
It now goes to the Senate, where the industry already has eight of the 16 votes it needs in its pocket — literally.
In all, the Financial freedom PAC doled out $21,000 in campaign contributions in November and December.
And low and behold in January, there was this bill.
Voting for the bill on Monday after taking payday contributions: Republicans Reps. Sonny Borrelli of Lake Havasu City ($750), Regina Cobb of Kingman ($500), Karen Fann of Prescott ($500), Lawrence of Scottsdale ($500), David Livingston of Peoria ($750), J.D. Mesnard of Chandler ($1,000), Steve Montenegro of Litchfield Park ($1,000), Jill Norgaard of Phoenix ($750), Warren Petersen of Gilbert ($750), Michelle Ugenti-Rita of Scottsdale ($500), Jeff Weninger of Chandler ($750) and House Speaker David Gowan of Sierra Vista ($2,000).
Others who didn’t get a payday out of the bill but voted for it just the same: Reps. John Allen of Scottsdale, Rusty Bowers of Mesa, Paul Boyer of Phoenix, Noel Campbell of Prescott, Doug Coleman of Apache Junction, Eddie Farnsworth of Gilbert, Mark Finchem of Oro Valley. Rick Gray of Sun City, Anthony Kern of Glendale, Vince Leach of Tucson, Phil Lovas of Peoria, Darrin Mitchell of Litchfield Park, Justin Olson of Mesa, Frank Pratt of Casa Grande, Bob Robson of Chandler, T.J. Shope of Coolidge, David Stevens of Sierra Vista, Bob Thorpe of Flagstaff and Kelly Townsend of Mesa.
The only Republicans who voted against the bill were Barton and Reps. John Ackerly of Sahuarita, Tony Rivero of Peoria and Kate Brophy-McGee of Phoenix.
All Democrats opposed the bill.
The payday loan industry has been trying to get back into Arizona ever since voters kicked it out eight years ago.
The bill would allow payday operations to offer loans of up to $2,500 in unsecured credit for up to two years at a monthly interest rate of 17 percent. That’s $425 if you pay the loan off at the end of the month.
But if it takes two years, that interest rate would balloon to 204 percent and the cost: $10,000.
“We should be ashamed of ourselves,” Rep. Reginald Bolding, D-Laveen, told his colleagues.
Clearly, Bolding hasn’t been around long enough to know that this crew has no shame.
The GOP culture of corruption in Arizona just keeps getting worse every day. It’s up to you the voters to kick these corrupt Tea-Publicans out of office.