Rep JD Mesnard on Arizona Flex Loans

(Reposted from azcentral.com: http://www.azcentral.com/story/opinion/op-ed/2016/04/18/my-turn-providing-alternative-arizonans-payday-loans/83028610/)

My Turn: Providing an alternative to Arizonans on payday loans

Last month, the Arizona House of Representatives passed a consumer finance bill that contained little-noticed provisions inserted by my colleagues that abolish the toxic lingering effects of payday loans once and for all in Arizona.

It was a wise move, as Arizona is the only state where certain loopholes are used due to the lack of other legal lending options available in the state, such as installment loans.

The consumer finance legislation in question, which carries these critical provisions, is the Arizona Flexible Credit Act.

This act will establish a realistic pathway to serve those lacking access to viable, legal and safe credit options for the first time in Arizona, and will further help consumers rebuild their credit scores and profiles.

It permits loans from $500 to $2,500, which must be paid in equal monthly payments over a term of up to 24 months.

Research in other states shows that the overwhelming majority of these types of installment loans are paid off in approximately six months. The maximum monthly interest rate is comparable to existing title loans at 15-17 percent; however, much like existing title lending in Arizona, the heated marketplace between lenders will drive down rates.

For Arizona’s working middle class, there is an unmet need for these types of loans, which are not offered by traditional banks and credit unions.

Furthermore, this proposal carries the most robust set of consumer protections anywhere in the nation. The protections include:

  • A free repayment plan option for at least three months if a customer becomes delinquent in his or her payment schedule
  • A database that will track all lending activity and require authorities to immediately investigate any violations of the statute
  • No hidden or additional fees
  • A 10-year legislative review and 20-year sunset (elimination)

Under the proposal, qualified entities can apply for licenses to offer flexible credit loans if they meet certain criteria of solvency and legitimacy as determined and overseen by the state Department of Financial Institutions , as it should be.

The public policy is sound. My colleagues in the Arizona House did tremendous work, quietly in some cases, inserting major amendments to this legislation last month on the House Floor with little fanfare.

The bill, SB 1316, faces a vote in the Senate in the coming days, and I am hopeful that the governor signs it quickly. Arizonans can win with this long-overdue legislation.

Is Senator Kimberly Yee Feeling the Bern?

Is this GOP State Senator Feeling the Bern?

Source: American Action News

http://americanactionnews.com/articles/is-this-gop-state-senator-feeling-the-bern

An Arizona State Senator is pursuing a strange, populist course of action that puts her in camp with Bernie Sanders and Elizabeth Warren- the sort of interest rate voodoo that helped create the financial crisis:

Arizona State Senator Kimberly Yee is not making any new friends among the free-market Republican crowd in Arizona. In a recent Senate hearing, Yee, who has been touted as a rising star in the party, held her fire after a long debate until the voting opened on a financial services bill in her committee. She then unloaded with full ammunition on the financial services industry and their free market principles.

“This bill just doesn’t feel right,” Yee proclaimed. “I am standing with the poor,” while attacking the well-funded groups who were supportive and their consultant class.

Yee went on to explain she has a “strong moral compass” and wants to protect people – that she would possibly consider a bill capping interest rates on loans in Arizona, a position which is specifically prohibited under federal law by Dodd-Frank.  By promoting rate caps, Yew veers left of the Obama Administration.

The issue at hand in last month’s Senate Commerce committee hearing was a proposed consumer lending bill known as Flexible Credit Loans, which would create a new credit product for up to $2500 over the course of a two-year loan term. Yee emphatically stated she could not back the measure before teeing off on its supporters with a blistering rhetoric.

The bill (and ones like it across the country), however, is supported by a broad base from left of center to the far right.  In Arizona, leading free market groups, the Arizona Free Enterprise Club and the Goldwater Institute have spoken out in favor of the legislation.

One conservative Republican interviewed on the subject off the record stated that they were quite surprised at Yee’s comments and mini tirade.  “She sounded more like Bernie Sanders than an Arizona Republican.  I’m not quite sure where all of that came from.”

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