by Max Gunderson
Even though much of Arizona is mired in a financial recession, there are still people out there that are trying to take advantage of those that are down on their luck. These predatory lenders can devastate consumers. Predatory loans can come in the form of high interest credit card agreements or mortgages, payday loans, short-term high interest loans and even some bank loans.
Starting on Thursday, July 1st, 2010, all payday loan stores in Arizona have stopped payday loan services.
Thousands of financially strained people in the Phoenix and Tucson, Arizona metro areas will now have to figure out a different means of obtaining short term funds. Payday loan lenders were given a 10 year exemption on Arizona’s financial regulation cap on annual interest rates. This exemption was approved back in 2000. That 10 year exemption expired at the end of June 2010. The exemption will not be renewed because it didn’t win the votes of Arizona residents. Maybe all of those Phoenix, Tucson, and other metro area Arizona voters know best.
One of the options that are still legal in Arizona is short term loans of 36 percent or lower. However, payday loans in Arizona will still be banned even if they manage to keep the interest at or below the 36 percent level. With payday loans ending here in Arizona, State Attorney General Terry Goddard said he will keep a close eye on businesses still attempting to take advantage of borrowers in Tucson, Phoenix and other Arizona metro areas. Many of the bankruptcy clients at Phoenix and Tucson’s Bankruptcy Law firms such as The My AZ Lawyers have payday loans contributing to their financial woes and fueling their need to file bankruptcy.
Shutting down payday loan stores and payday lending in Arizona will result in a loss of hundreds of jobs. The state economy of Arizona will be negatively effected by the shut down. There are also concerns that many of the Arizona payday loan customers, (in particular those who are close to the Arizona state border lines), will drive out to neighboring states such as Nevada, Utah, New Mexico, or California where payday loans are still legal. Arizona residents also still have the option of getting approved for payday loans on-line.
Opponents of the payday loan ban in Arizona argue that eliminating such loans will only hurt the residents of Phoenix, Tucson, and other Arizona cities. They argue that the consumers that will be hurt the most are those who lack other options for money, These consumers rely heavily on payday loans. These consumers usually suffer from bad credit and are unable to obtain a regular loan through a bank.
If you are in a financial bind because of the payday loan ban or have existing payday loans, contact The My AZ Lawyers and find out what options may be available to you. We will give you a Free Evaluation and Free Debt Evaluation, contact us today and see what options are available for you.