Gov. Jan Brewer today signed HB2526, which allows an interest rate of 36 percent on loans of up to $3,000 and increases the origination fee to up to $150 from the current $75.
Current laws cap the interest charge on loans of $1,000 or less at 36 percent. For loans over $1,000, a 36 percent interest rate may be charged on the first $500, with a 24 percent interest on the remaining balance.
The AARP contended that the measure would lead to predatory lending practices.
But the measure’s supporters said the state’s lending industry is tightly regulated, and the alleged excesses elsewhere in the country are nowhere to be found here.
Rep. T.J. Shope, R-Coolidge, the bill’s author, earlier acknowledged that it would mean higher costs for consumers, but his measure seeks to balance that with company profitability. He added that the bill would give Arizonans greater access to small loans.