Once again, the Arizona State Legislature has decided that voter approved legislation should be repealed. This time it’s AZ Prop 200, the banning of the Payday Loan industry. Having lived in the state all my life, I can recall other times. One of them: medical marijuana, supported by 65% of the voter population in 1996, was repealed immediately by the Arizona House and Senate.

I guess the Arizona legislative body thinks the voters of Arizona are children and don’t know their own minds. More probably, since the payday industry makes a ton of money, I’m sure the real story is that they hired big lobbyists to “convince” the Arizona House the bill was a good idea.

Basically, House Bill 2161 means payday lenders can continue to operate past the current June 30th, 2010 expiration date. HB 2161 was introduced by introduced by Andrew M. Tobin, Majority Whip. If you live in Arizona, please vote this man out in the next election, ok?

In addition to extending the expiration date, the bill has a few other provisions, some of which do more to clamp down on predatory practices of payday lenders. The bill limits the amount of the fees the lenders can charge to 15%, which is still pretty high. Another provision which improves upon current practices – lenders may not charge a fee to extend a loan.

Here are other highlights:

• Take “reasonable measures” to ensure that no customer has more than one payday loan outstanding at any time with any lender in this state.
• A consumer may not have more than 500 dollars in outstanding obligations as a result of a payday loan.
• A lender shall not charge a dishonored check service fee more than twice for a check returned due to insufficient funds.

I found the “reasonable measures” to make sure no customer has more than one deferred presentment loan outstanding very interesting. The bill specifically states that “reasonable measures” would consist of using of Credit Bureaus to verify number of loans in process. Did the credit bureaus also send their lobbyists to Arizona? Per the bill:

• Before January 1, 2011, the superintendent shall certify a consumer reporting service database as a commercially reasonable method of verification.
• Beginning May 1, 2011, before entering into a deferred presentment agreement with a customer, a lender must use a commercially reasonable method to verify that the customer does not have open with any licensee a deferred presentment agreement in excess of the limit prescribed in section
• Lender may charge a customer a verification fee in an amount equal to the lesser of the amount charged to the licensee by a consumer reporting service for obtaining this information or one dollar.

Are you as outraged as I? Read the complete bill here, and please, leave us a comment!

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