PHOENIX (11/6/08)--The Arizona Credit Union System (ACUS) and credit unions succeeded in helping defeat Tuesday a payday-lender backed referendum that would have locked in exorbitant interest rates on payday loans.
Proposition 200 was defeated by a large 20-point margin, with 60% of voters against and 40% for the measure, said Austin De Bey, ACUS vice president of government affairs.
The measure was billed by the payday lending industry as a "reform," but it would have locked in interest rates on payday loans at 391% permanently, said De Bey. Currently payday lenders charge up to 450% on loans. "They wanted to remove the sunset," he said, referring to the fact the payday statute will sunset in 2010.
"All of Arizona credit unions can be proud of helping to defeat Proposition 200," he said.
"Our credit unions passed out handouts in branches and at ATM locations, and had graphics as well" urging defeat of the proposition, he told News Now. Thirty of the state's credit unions, representing 1.4 million of the 1.6 million members in the state, participated.
The credit unions helped raise $50,000 for radio ads, he said, adding the payday lending lobby spent about $15 million on the measure. The Durham, N.C.-based Center for Responsible Lending, also opposed the measure.
courtesy of cuna.org