Support for payday lenders grows where money flows
Published: March 11, 2010 at 8:00 pm
In the March 5 edition of the Arizona Capitol Times, three of the state’s chambers of commerce ran a full-page ad on page 2 supporting the “short-term consumer financing industry,” or in English, the payday lenders.
In the ad, they drag out the old talking point about “reasonable regulation” and end with the admonishment, “Support Payday Loan Reform!” Where have we heard that one before?
Any of us who were around during the Proposition 200 battle in 2008 are familiar with this industry’s expensive taste for advertising and loose association with the truth.
What’s interesting is the messenger.
The Greater Phoenix Chamber of Commerce is one of the groups named in the ad. In the Prop. 200 debate, the Phoenix Chamber took a clear position against the payday lenders’ measure, saying that it would have created a voter-protected special deal for just one industry. Why now are they arguing for overturning the will of the voters in order to protect a special deal for just one industry?
Why are they suddenly supporting a measure that undermines the free market by giving unique protected status to payday lenders?
Just follow the money.
After the payday lenders’ ballot measure was overwhelmingly defeated in 2008, they decided that they should join the Greater Phoenix Chamber of Commerce – after nearly 10 years of operating in Maricopa County without being members. Interesting timing.
Now, payday loan stores make up the Phoenix Chamber’s largest membership group.
Prior to Prop. 200, only 17 payday loan stores (two companies) were members of the Phoenix Chamber. Since their overwhelming defeat in November 2008, that number has grown to 124, meaning that nine out of 10 payday loan stores that are members of the Phoenix Chamber joined after the voters rejected them at the polls. The next largest category, “hotels, motels, and resorts,” is a distant second with 66 members.
And wouldn’t you know it, a whole bunch of these new members promptly joined the Chamber’s Policy Committee, just in time to vote on this year’s industry-written bill, H2161, to extend the life of payday lending.
Gosh, their timing is impressive.
And just like their $15 million ad blitz in 2008, the payday lenders’ new ads are nothing more than a smoke and mirrors campaign to create the illusion of community support.
The truth is quite different.
The Chandler Chamber of Commerce came out last month against any continuation of 400-percent payday loans. The board of directors stated, “It is our position that the voters have spoken loud and clear. Payday loans take unfair advantage of those in our community who can afford it the least.”
Clarence Boykins, President of the Tucson-Southern Arizona Black Chamber of Commerce, said, “Payday lenders have damaged our community and are hurting the entire Arizona economy, particularly during the recession. Enough is enough.”
And it’s not just chambers of commerce that think the time has come to let 400-percent loans expire. The Arizona Consumers Council, AARP Arizona, Children’s Action Alliance, labor unions, business leaders, faith leaders, civic leaders, cities like Phoenix, Tucson and Mesa and dozens of community groups across the state all agree.
So do Democratic and Republican legislators and other Capitol insiders.
Just last month, the Capitol Times ran an online poll asking readers whether payday lenders should stay or go. More than 70 percent of the 600 participants in the poll said that it’s time for them to go.
But like they did with Prop. 200, payday lenders are throwing lots of money after votes, hoping that support will grow as the money flows.
It didn’t work then, and it won’t work now.
- Sen. Debbie McCune Davis is a Democrat who represents District 14.
She is co-chair of Arizonans for Responsible Lending, a statewide coalition of more than 200 organizations opposed to the continuation of triple-digit payday loans.
- Barry M. Aarons is the owner of The Aarons Company LLC and represents Arizonans for Responsible Lending.