Now here is another shining example of what black money and greed can buy in Arizona:
Payday loans. 2.0.
You know, a new take on those high interest schemes that voters took away eight years ago?
Well, the program is back in a new package and thanks to the maneuvering of its sponsors, it’s about two votes away from Gov. Doug Ducey’s office.
One of Arizona’s first black silver men wrote a column that appears this week in The Republic and on azcentral.com: “Why Arizona Needs Flexible Loans.”
Or, to put it another way, “Why the payday loan industry is in desperate need of a comeback to Arizona.”
For the second year in a row, Scot Mussi, president of the Arizona Free Enterprise Club, is lobbying the legislature to approve payday loans 2.0 – or as he calls them, “a new product called ‘flexible’ consumer loans.”
“For many struggling families in Arizona, making ends meet is harder than ever,” writes Mussi, whose black money group spent $ 1.7 million in the 2014 election. “In fact, for some hard-working taxpayers, the situation is so serious that an unforeseen financial difficulty (car problem, leaking roof, etc.) could turn out to be catastrophic, especially if the family does not have access to credit or access to funds. other borrowing options to foot the bill. “
So Mussi and the American Financial Choice Association (read: payday loan industry) want to offer a great option for families in difficulty: up to $ 2,500 in unsecured credit for up to two years.
The bill provides for a monthly interest rate of 17%. It’s $ 425 if you pay off the loan at the end of the month.
The problem is, as Mussi suggests, that for many struggling families, making ends meet is harder than ever. And it will probably be as difficult next month as it is this month. And the next month. And the next month.
A loan that takes two years to repay would not have an interest rate of 17%. It would be closer to 204%, according to the Consumer Federation America.
Translation: This struggling family would have a lot more trouble because their $ 2,500 flex loan would cost $ 10,000 at the end of year two. And that’s without counting the costs.
The bill, sponsored by Republican Senator John Kavanagh of Fountain Hills, JD Mesnard of Mesa and Steve Montenegro of Litchfield Park, was killed by the Senate finance committee on February 10.
So naturally, the sponsors – including Speaker of the House David Gowan – made a final round of the Senate.
The flexible loan proposal was brought back on Monday as a strike-all amendment to Senate Bill 1316 and was approved in a 6-3 vote by the House Ways and Means Committee. Ideally, the old version of SB 1316 has already passed the Senate, which means it is now bypassing the Senate committee that already killed it.
Naturally, the payday loan industry and their member of the legislature are pushing this as a boon to the working poor.
“Well-meaning Arizona people deserve to have a safe, legal, and compassionate financial option in an emergency,” Kavanagh said, via a press release issued by the American FINancial Choice Association. “The progress made today means Arizonans with little to no credit will be able to handle emergencies, like broken air conditioners or healthcare costs, without pledging their assets or taking out an unregulated loan in this. State.”
Yes, because it’s so much better to take a loan that you can’t afford and watch the interest rate soar to 204%.
There is, after all, a lot of money to be made.
And as Mussi put it in his editorial, “The need is the need.”