Arizona Attorney General Warns of Payday Crackdown
Arizona Attorney General Terry Goddard pledged Wednesday to vigorously enforce a crackdown on payday lending three weeks before the June 30 expiration of a sunset law allowing the shops to charge rates up to 400%.
In a statement announcing the start of "Operation Sunset," the state's Democratic attorney general said he doubted the 75 licensed payday firms with 522 Arizona outlets "would go quietly into the night" but rather would try to skirt the law and continue to charge exorbitant rates.
Despite intense lobbying by both local and national payday chains, the state legislature this spring failed to come to an agreement on a law to extend the lenders' ability to charge the higher rate with the Arizona Credit Union League and consumer groups actively opposing the extension.
Starting in July, rates are capped at 36% plus 5% for administrative fees. In a press statement, Goddard asked for the public's help in policing the law and suggested the payday firms might pursue auto-title loans with exorbitant rates or Internet-based lending. He said North Carolina and Arkansas experienced an increase in deceptive practices after those states issued prohibitions on payday loans.