The payday loan industry cropped up in Arizona in 2000 after the Legislature approved a temporary exemption from consumer loan rules on interest rates. These rules, which cap the interest rate that lenders may charge at 36 percent, are waived until 2010. The debate about payday loan practices has raged ever since. Proposition 200, The Payday Loan Reform Act, would have extended the exemption but was defeated on the 2008 November ballot.
This session, Representative Andy Biggs (R-Gilbert) has introduced HB 2608: Small Installment Loan Acts, that would change Arizona laws relating to small installment loans. Payday loans are a type of small installment loan. The bill would create separate regulations for small installment lenders, including allowing them to charge administrative fees up to 4% of the loan every month. Phoenix staff calculated that the bill could allow interest rates as high as 425%. On Monday, this bill failed in the Banking and Insurance Committee Monday by a vote of 4-4.
Governor Brewer Plan for Remaking State Finances
On Wednesday, Governor Jan Brewer proposed a five-point plan to address Arizona’s budget deficit to a joint House and Senate session. The Governor’s plan includes an additional $1 billion in budget cuts, “structural budget reform,” a special election on whether to reform Proposition 105 (the Voter Protection Act, which prevents lawmakers from changing any voter-approved initiative without a 3/4 supermajority), modernization of the state’s tax structure, and a temporary tax increase. The FY 2010 budget is projected at $3 billion in the red.
The Governor is asking the legislators to avoid a short term view of fixing only the FY10 budget, but rather to submit bills that align with her 5-point, long-term solution. Legislators have a difficult challenge ahead, balancing the concerns of potentially raising taxes, cutting programs and the deciding how to approach Voter Protection Act reform.
Jumpstarting the Phoenix Economy
The Governor says she plans to accept federal stimulus money, and Phoenix Mayor Phil Gordon has similar plans. The Mayor and Council have endorsed a comprehensive strategy to identify and pursue grant dollars for programs and "shovel ready" projects through the American Recovery and Reinvestment Act of 2009 signed by President Obama on February 17. Stay tuned. Until then,
Remember to SHOP PHOENIX and tell your legislators to protect city revenues!
Source: P.L.A.N.
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