Arizona Cash Advance Reform, Proposition 200 (2008)

Arizona Cash Advance Reform, Proposition 200 (2008)


  • 1 Election results
  • 2 Text of this effort
  • 3 History
  • 4 information on the proposition
  • 5 Supporters
    • 5.1 Supporting arguments
    • 5.2 Donors to Proposition 200
  • 6 Opposition
    • 6.1 arguments that are opposing
  • 7 Aftermath
  • 8 way to the ballot
    • 8.1 Ballot title lawsuit
  • 9 See also
  • 10 links that are external
    • 10.1 fundamental information
    • 10.2 Supporters
    • 10.3 Opponents
  • 11 Footnotes
Arizona Constitution
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Arizona Proposition 200, also referred to as the cash advance Reform Act, had been in the November ballot in Arizona being a citizen-initiated amendment that is constitutional. It had been beaten.

The payday-loan effort had been 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 That measure had been withdrawn during the early June if not signatures that are enough being gathered to qualify it for the ballot. 1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 40.4%

Text associated with effort

The description that is 100-word with all the Arizona Secretary of State’s workplace because of this initiated state statute checks out:

Arizonans use payday lending services each day to satisfy unexpected costs and emergencies that are financial. The payday financing industry is placed become eradicated and also the Arizona Legislature does not want to enact reforms to profit borrowers while preserving this essential monetary choice. This measure brings dramatic pro-consumer reform to payday lending and protect customer option. It provides a substantial rate cut, removes rolling-over major to extend a loan, produces a payment plan free of charge to clients that can not satisfy their responsibilities, and inhibits a debtor’s capability to get multiple loan at any given time. 3 4


The lending that is payday had been an $85 billion industry that delivers short-term loans, that have been often guaranteed with a check postdated to your debtor’s next payday. The attention rate when you look at the lack of legislation had typically worked down to on average $15 per $100 lent on a two-week loan. The interest that is high had been exactly exactly exactly what had resulted in legislative tries to control the industry. The training had been unlawful in fifteen states in the period of Proposition 200. In 2008, as well as Prop 200, Ohioans voted on payday lending in Ohio Issue 5. In Ohio and Arizona together, the wide range 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 reduction this year when an enabling law expires, might have its directly to exercise when you look at the continuing state stretched indefinitely.
  • Charges 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 permitted to move throughout the principal into extended loans and will have to provide customers payment plans.


“Arizonans for Financial Reform” had been supporting this effort. It had been filed in reaction towards the avoid payday advances Initiative, which may eradicate all loans that are payday.

Based on the internet site of some other support that is affiliated, “Reform Arizona payday advances,” 6 , tens and thousands of Arizonans usage payday advances responsibly to pay for unforeseen day-to-day costs. But, your website warns, the avoid pay day loans Initiative would eliminate this easy option that is financial Arizona. Supporters of the measure argued that eliminating pay day loans completely would harm numerous families economically, through higher banking fees, charge card belated charges, and energy 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 occur because clients into the real life make logical choices about borrowing cash short-term, plus in numerous circumstances, payday advances would be the most affordable selection for some people that have an urgent situation or unexpected cost they need to cope with,” Barnes stated.

Supporters included that closing all payday advances in Arizona would also expel significantly 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 costs
  • Establishes a repayment plan that is flexible
  • Needs internet loan providers to be certified into the state
  • Enacts tough brand new laws to split down on unscrupulous operators
  • “About 5 % of People in the us took down a quick payday loan. There is scant evidence that their great deal might have been better if rejected that possibility. A research by two economists with all the ny Federal Reserve Bank discovered that after Georgia and new york abolished payday lending, bounced checks and Chapter 7 bankruptcies increased.” 7

Donors to Proposition 200

Because of the end of July, supporters of Prop. 200 had provided about $8.7 million up to a campaign committee arranged to advertise the initiative. The Arizona Republic stated that “nearly every cent. is donated by – guess who? – a trade team representing payday loan providers: the Arizona Community Financial solutions Association.” 8


The website No On 200 : It really is No Reform At All had been created in opposition for this initiative.

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

The Party that is democratic of endorsed the avoid pay day loans effort and argued that pay day loans 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, thus maintaining cash advance services and products at 391% APR or worse
  • Electronic usage of debtor accounts provides payday lenders unfettered debit access to client bank reports and facilitates overcharging
  • The payment plan supply limits customers’ directly to request a payment intend to as soon as per 12 months.
  • “The argument that shutting loan that is payday will be a blow to your economy is equally spurious. It could assist the economy on the street, but that doesn’t mean it would make our lives any better if we legalized the sale of heroin and let merchants hawk it. A business that thrives on keeping customers poor will not assist the economy.” 10


Pay check loan providers would not disappear completely therefore effortlessly after the measure’s beat, them stay in business during the fall of 2009 as they tried to convince lawmakers to let. Relating to reports, the industry hired state that is former General give Woods to express them inside their efforts. In accordance with Woods, after learning a proposition because of the industry, he was convinced there is an accepted spot within 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 name lawsuit

Arizonans for Responsible Lending filed case within the ballot language. In line with the lawsuit, voters might unwittingly accept a cap of 400 per cent rates of interest for payday advances in the event that Secretary of State failed to make clear the descriptive language of Proposition 200 regarding the November’s ballot.

Superior Court Judge Sam Myers ruled Aug. 27, 2008, that Secretary of State Janice Brewer didn’t have to simplify the language. Judge Myers stated that the description for the ballot measure drafted by Secretary Brewer was theoretically accurate, and therefore with only 50 terms to describe issues that are complex alternatives need to be made.

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