In June of 2000, the Arizona legislature approved a bill that gave personal loan company just about 10 years of authorization to operate within the state. In November of 2008, Arizona voters defeated a ballot proposition that would have extended this authorization . Payday loans direct lender won't be able to legally operate as of June 30, 2010.
Resource for this article: Operation Sunset to end loan company in Arizona
New lending limits in the state of Arizona
Lenders may have new regulations June 30, 2010. All loans, including any of the short term personal loan, will be limited to 36 percent interest plus 5 percent for administrative expenses. Auto title lending is a form of short term credit that will still be available to customers in Arizona. The Arizona attorney general has set up a Facebook page and tip line where they’re encouraging all of the citizens to report any lenders they believe are operating outside the new legal framework.
Arizona payday lender effects
Currently, there are 75 companies in Arizona with licenses to operate pay day loans stores. You will find 650 operating locations out of these 75 companies. Of those storefront locations, about 200 have filed applications to convert their licenses to auto loans for bad credit businesses or pre-paid debit card businesses. Some companies have indicated they intend to stay open and will try to offer short-term credit that comes at the 36 percent interest rate cap. However, most stores will shut down. In the state, about 1,000 jobs can be lost. The Arizona Operation Sunset representatives have stated the Attorney General will be scrutinizing the terms and conditions of all short-term credit transactions.
Reality of payday lending in Arizona
Arizona’s Operation Sunset says that by forcing payday lending out of business in the state of Arizona, it is helping improve the financial stability of state citizens. A recent study by UC-Davis, however, found that short-term credit is apparently too costly and risky for banks and credit unions to offer. Short-term credit markets often provide businesses the money to pay their bills, make payroll and the money they have to operate on a day-to-day basis. Similarly, short term credit and other financial services that numerous payday lenders offer are very useful for numerous individuals, including those who cannot or choose not to have bank accounts.
Read more on this topic here
AZCentral.com
azcentral.com/arizonarepublic/local/articles/2010/06/10/20100610payday0610.html
Arizona Attorney General’s Office
azag.gov/operation_sunset/
Associated Press
google.com/hostednews/ap/article/ALeqM5hd4oR9WzL2f3xLfVj38DYSFLPJkQD9G83P9O0
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