A payday loan. If you're like most Arizona voters, you have never had one, don't really know how they work and might even have a less-than-positive feeling about them. And who could blame you.
Every day it seems another self-appointed know-it-all with an ax to grind is in the news, blaming payday lending for all of society's ills and demanding the industry be run out of town before every one of us is beguiled into bankruptcy.
In my 20 years of active civic involvement in Arizona, I have never seen an issue so grossly manipulated by special interests either willfully ignorant of the facts or simply obsessed with their own aggressive political agenda.
These same people are now doing a genuine disservice to the voters of Arizona by demanding a "no" vote on Proposition 200 while telling a one-sided story designed to prey on people's emotions.
If this small but vocal group of angry opponents gets their way, payday loans will be eliminated in Arizona.
Thankfully, most voters reject this crazy idea as extreme and would rather reform payday loans than eliminate them.
That's what Proposition 200 does.
Here are the facts on Prop. 200 - The Payday Loan Reform Act:
Prop. 200 mandates lower fees on payday loans and makes it illegal to extend a payday loan and charge another fee. It creates a flexible repayment plan for customers who can't meet their obligation.
Prop. 200 reigns in unregulated, off-shore internet lenders, and makes it harder to have more than one payday loan at a time (it's already illegal). It also will close payday loan stores that cannot adjust to new tough reforms, and will preserve payday loans as an option for those who choose it.
These are the facts of Prop. 200. See for yourself at www.ReformAZPaydayLoans.com.
Here are a few other important things you might not know about payday loans.
The average customer earns about $30,000 a year, is married, has some college education, and probably owns a home.
Every payday loan customer must have a steady job and a bank account.
Most bounced check fees are higher than the cost of a payday loan.
It is usually more expensive to pay over-limit fees on a credit card than to borrow from a payday loan store.
Most payday loan customers use the service for its simplicity, convenience, and to avoid other more costly credit choices.
What these hard-working Arizonans need is a reformed payday loan industry as another credit option during difficult economic times. Removing this option, or any other for that matter, is not going to help anyone.
Every assertion made by opponents of payday lending as an option for people is directly addressed by the reforms of Prop. 200. The sad truth is, some people have a political agenda intent on eliminating payday loan stores entirely, even though economic conditions are extremely tight for many Arizonans right now.
Those who may be undecided about how to vote on Prop. 200 would be wise to read a November 2007 staff report done for the Federal Reserve Bank of New York.
It's available on our campaign Web site.
The report shows that consumers suffer financially when payday lending is banned in a state where it once existed.
The key conclusion of the report was that bankruptcies, bounced checks and credit trouble all rose dramatically when consumers no longer had access to this financial option.
Reform is better than elimination.
George McGovern, a former senator from South Dakota and 1972 Democratic presidential candidate, said it best recently when he stated, "Anguished at the fact that payday lending isn't perfect, some people would outlaw the service entirely, or cap fees at such low levels that no lender will provide the service. Anyone who's familiar with the law of unintended consequences should be able to guess what happens next."
The Payday Loan Reform Act makes sense. Reforming the industry while keeping this financial option available for those who choose it, is a sensible, reasonable thing to do in Arizona.
Please join me in voting "yes" on Prop. 200.