Posted on

Arizona Cash Advance Reform, Proposition 200 (2008)

Arizona Cash Advance Reform, Proposition 200 (2008)


  • 1 Election results
  • 2 Text associated with the effort
  • 3 History
  • 4 information on the proposition
  • 5 Supporters
    • 5.1 arguments that are supporting
    • 5.2 Donors to Proposition 200
  • 6 Opposition
    • 6.1 Opposing arguments
  • 7 Aftermath
  • 8 road to the ballot
    • 8.1 Ballot name lawsuit
  • 9 See also
  • 10 links that are external
    • 10.1 Basic information
    • 10.2 Supporters
    • 10.3 Opponents
  • 11 Footnotes
Arizona Constitution
1 • 2 • 3 • 4 • 5 • 6 • 6.1 • 7 • 8 • 9 • 10 • 11 • 12 • 13 • 14 • 15 • 16 • 17 • 18 • 19 • 20 • 21 • 22 • 25 • 26 • 27 • 28 • 29 • 30

Arizona Proposition 200, also called the cash advance Reform Act, had been regarding the November ballot in Arizona as a citizen-initiated amendment that is constitutional. It absolutely was beaten.

The payday-loan initiative ended up being mainly supported by the payday-loan company when you look at the state, and ended up being less limiting compared to the avoid payday advances Initiative, sponsored by Rep. Marion McClure, D-30, and Sen. Debbie McCune Davis, D-14. That measure had been withdrawn at the beginning of June if not dollar financial group loans app sufficient signatures had been being gathered to qualify it for the ballot. 1

Election results

Arizona Payday Loan Reform
Result Votes Percentage
d No 1,271,717 59.6%
Yes 860,607 40.4per cent

Text associated with effort

The 100-word description filed with the Arizona Secretary of State’s workplace because of this initiated state statute reads:

Arizonans use payday lending services each day to satisfy unexpected expenses and economic emergencies. The payday financing industry is defined to be eradicated additionally the Arizona Legislature does not want to enact reforms to profit borrowers while preserving this essential economic choice. This measure brings dramatic pro-consumer reform to payday lending and protect customer option. It offers a rate that is substantial, removes rolling-over major to extend that loan, creates a payment plan free of charge to customers that can not meet their responsibilities, and inhibits a debtor’s capability to get one or more loan at any given time. 3 4


The payday financing industry ended up being an $85 billion industry that delivers short-term loans, that have been often guaranteed by having a check postdated to your debtor’s next payday. The attention price within the lack of legislation had typically worked off to on average $15 per $100 lent for a two-week loan. The high interest levels had been exactly exactly exactly what had resulted in legislative tries to manage the industry. The training had been unlawful in fifteen states during the period of Proposition 200. In 2008, along with Prop 200, Ohioans voted on payday financing in Ohio Issue 5. In Ohio and Arizona together, the quantity of payday-lending branches outnumbers the Starbucks and McDonald’s outlets combined. 5

Information on the proposition

Under this proposition:

  • The payday-loan industry, which faces removal this year when an enabling law expires, will have its straight to exercise when you look at the state stretched indefinitely.
  • Costs payday loan providers are permitted to cost would drop from $17.65 to $15 on a $100, two-week loan.
  • Loan providers wouldn’t be allowed to move throughout the principal into extensive loans and will have to provide customers payment plans.


“Arizonans for Financial Reform” had been supporting this effort. It had been filed in reaction into the avoid payday advances Initiative, which may expel all pay day loans.

In line with the site of some other support that is affiliated, “Reform Arizona pay day loans,” 6 , tens of thousands of Arizonans usage pay day loans responsibly to pay for unforeseen day-to-day costs. But, the website warns, the avoid pay day loans Initiative would remove this easy option that is financial Arizona. Supporters with this measure argued that eliminating loans that are payday would harm numerous families economically, through higher banking fees, charge card belated costs, and utility reconnect costs. 6

Stan Barnes, a lobbyist and consultant to Americans for Financial Reform, a committee funded because of the payday-loan industry, supported this measure and stated the problem boils down to customer option.

“Payday-lending shops exist because clients within the real life make logical choices about borrowing cash short-term, plus in numerous circumstances, pay day loans will be the most inexpensive choice for somebody that has a crisis or unexpected cost they should cope with,” Barnes stated.

Supporters included that closing all loans that are payday Arizona would also expel a lot more than 2,500 Arizona jobs. 6

Supporting arguments

Main arguments submit meant for Proposition 200 included:

  • Prop. 200 would mandate a cut that is substantial loan charges
  • Establishes a versatile repayment plan
  • Needs lenders that are internet be certified when you look at the state
  • Enacts tough regulations that are new split straight straight down on unscrupulous operators
  • “About 5 % of People in the us took down a quick payday loan. There is scant proof that their great deal could have been better if rejected that possibility. A report by two economists utilizing the ny Federal Reserve Bank discovered that after Georgia and new york abolished lending that is payday bounced checks and Chapter 7 bankruptcies increased.” 7

Donors to Proposition 200

Because of the end of July, supporters of Prop. 200 had offered about $8.7 million up to a campaign committee arranged to market the initiative. The Arizona Republic stated that “nearly every cent. happens to be donated by – guess who? – a trade team representing lenders that are payday the Arizona Community Financial solutions Association.” 8


The no that is website 200 : It really is No Reform after all was created in opposition to the initiative.

Rep. Marian McClure (R-Tucson), chairwoman associated with avoid Payday Loans Initiative campaign, stated that cash advance reform, similar to this cash advance Reform Act]], is nothing but “window dressing.” 9

The Party that is democratic of endorsed the avoid payday advances effort and argued that payday advances are “by definition predatory and benefit from economically susceptible Arizona families by trapping them in unending rounds of financial obligation.”

Opposing arguments

Main arguments proposed versus Proposition 200 included:

  • Prop. 200 does not lengthen the minimum loan term of five times, therefore maintaining cash advance items at 391% APR or worse
  • Electronic usage of debtor accounts provides payday lenders unfettered debit access to client bank reports and facilitates overcharging
  • The repayment plan supply limits customers’ directly to request a payment want to as soon as per 12 months.
  • “The argument that shutting cash advance shops will be a blow towards the economy is similarly spurious. It could assist the economy when we legalized the purchase of heroin and allow merchants hawk it from the road, but that does not suggest it could make our everyday lives any benefit. A business that thrives on keeping customers bad will not assist the economy.” 10


Pay check loan providers didn’t disappear completely therefore effortlessly after the measure’s defeat, because they attempted to persuade lawmakers to allow them remain in company throughout the fall of 2009. In accordance with reports, the industry hired previous state Attorney General Grant Woods to express them inside their efforts. Based on Woods, after studying a proposition because of the industry, he was convinced there was clearly an accepted destination into the state of payday loan providers. 11

Way to the ballot

On 23, its supporters turned in more than 265,000 signatures to the Arizona Secretary of State june.

Ballot title lawsuit

Arizonans for Responsible Lending filed case within the ballot language. In line with the lawsuit, voters might unwittingly accept a limit of 400 % rates of interest for payday advances in the event that Secretary of State didn’t simplify the language that is descriptive of 200 in the November’s ballot.

Superior Court Judge Sam Myers ruled Aug. 27, 2008, that Secretary of State Janice Brewer didn’t have to make clear the language. Judge Myers stated that the description for the ballot measure drafted by Secretary Brewer ended up being theoretically accurate, and therefore with only 50 words to spell out complex dilemmas, choices need to be made.

Leave a Reply

Your email address will not be published. Required fields are marked *