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Voters say no to payday loans
Voters apparently have decided they don’t want to keep payday loans legal in Arizona.
In one of the most expensive campaigns in state history, the lenders sought approval of Proposition 200 to permanently protect their right to operate in Arizona -- at least until some other ballot measure changes that.
Official vote totals from the Secretary of State's Office
The lenders had collected more than $14.6 million. But it falls short of the successful $21.1 million campaign by Indian tribes in 2002 to get the exclusive right to operate casinos in Arizona.
State law caps allowable interest at 36 percent a year.
In 2000, however, lawmakers agreed in 2000 to create a special exemption for payday lenders. These companies provide cash for a check they know is not good, agreeing to hold it for up to two weeks at fees up to $17.84 per $100 borrowed, up to $500.
That exemption, however, expires July 1, 2010. Lenders went to the ballot after lawmakers refused to extend that.
Defeat of Proposition 200 requires them to live under that 36 percent limit, far short of the more than 450 percent that the current fees compute to, and still more than the 391 percent cap the lenders had offered to convince voters to approve the measure.
Defeat does not mean the immediate closure of payday loan stores. Industry lobbyists could still try to convince lawmakers between now and July 1, 2010 to allow them to continue to operate.
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