PHOENIX Efforts by the payday loans industry to remain in Arizona after June 30 were dealt a serious and potentially fatal setback Monday when a key Democratic lawmaker said he can’t support what the lenders want.
Payday lending involves twoweek loans of up to $500, with lenders now permitted to charge up to $17.85 for each $100 provided. That translates to more than 400 percent on an annual basis.
The special exemption for the industry from the state’s usury cap of 36 percent expires June 30. And voters, on a 32 margin, killed an industry sponsored initiative in 2008 to make that exemption permanent, even after lenders agreed to cut fees to $15 per $100 borrowed.
This new bill still has that $15 fee, about 390 percent on an annual basis, with a few other changes industry lobbyist say makes it a better deal for borrowers. Campbell, however, said that’s still too much and still not a good deal for borrowers.
Industry lobbyist Lee Miller said lenders cannot live with the 36 percent annual cap, saying that would never cover their costs on a twoweek loan for $100. Miller said he will consult with lenders to see if they can live with something less than 390 percent.
source here.
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