AZ State Veterans Legislative Update 7 March 2016: S/E S.B. 1316 – Predatory Lending | MOAA CORONADO – MOAA 5 STAR LEVEL OF EXCELLENCE AWARD AND FIVE STAR COMMUNICATIONS AWARD FOR 2023

Subject S.B. 1316 S/E: ‘consumer lending; regulation, licensure’

SB 1316 passed in the House Ways & Means Committee meeting in a very partisan manner at about 7:15 PM on 29 February after over two hours of discussion and testimony where the Bill’s Sponsor, Lobbyists, Loan Industry Representatives and a Minister provided their rationale for the need for this legislation to help some of the most vulnerable of our citizens when in fact it is an outrageous debt trap for the victims and a boon for the lending industry.

And the Bill passed 7-1-0-1-0 in the House Rules Committee today (7 March) which was just a formality. However, it is now expected to appear on a House Caucus agenda and/or for a Floor vote in the next day or so where there will be no public input allowed for either. So we need to urge all of our State Representatives to oppose this issue NOW!! Please do so this afternoon or evening if possible.

I don’t believe that I need to further recap this now widely publicized issue, So below is the process for forwarding a brief Email (shown below) urging all Sate Representatives to vote against SB 1316 in Caucus and/or when it hits the House floor.

Email addresses with Semi-colons for all members of the Arizona House of Representatives:

You might want to print this Email now to have the instructions below available to facilitate using this process.

Guidance for processing and sending your Email.

When you are ready to forward the Message at the end of this text to all members of the House of Representatives:

Click on “Forward”from this message so that the attachment will be included with the message that will then be ready for final processing for sending. (Note: Clicking on “Forward” doesn’t send the message. It only sets it up to complete the processes below before hitting “Send”).
Then delete the Subject line of the new message, and copy: S.B. 1316: S/E: ‘consumer lending; regulation, licensure’ here or at the beginning of the text of this Email and paste it on the Subject line.
Edit the message that appears below the blue line below if desired, and enter your name (and retired Rank if you are a Military Retiree) after the word ‘Respectfully‘ at the end of the message. Enter your address if desired, but that might tend to make the Representatives or their staff to delete your message if you are not a constituent before they read at least the first sentence in the message. Consider just adding something like ”Concered Veteran and Citizen” after your name and rank. If you are a constituent of one of the Representatives, in addition to sending this Email to all of Committee Members, please consider calling your Representative’s office with your concerns Go to or click on www.azleg.govhere. At that site, click on House and then on Members on the drop down menu) to find their phone numbers.

Copy Email addresses with Semi-colons for all members of the Arizona House of Representatives:above (high light the addresses of all 60 members and then hit ‘Ctrl’ and ‘C’ simultaneously), and paste it on the Bcc: line (put your cursor on the Bcc: line above and then hit ‘Ctrl’ and ‘V’ simultaneously.

NOTE:

If you have problems with your system not allowing so many address at one time, break the group down into two or more groups for use in sending the message to those two or more groups.

And if your system rejects the use of Semi-colons separating the addresses, follow the above process with the group of addresses separated by Commas.

Now High Light the blue line shown below (place your curser just below the blue line) and sweep upward acrosseverything above it.
Then hit “Delete” on your keyboard . That will leave just the Draft Message that now appearsbelow the blue line as the text of your new Email.
7.Then when you feel comfortable that you have completed all the steps correctly, you can hit “Send” to send your Email.

Draft Message

Honorable State Representative,

In an earlier Email I urged you to vote NO on SB 1316 as it would provide lenders a new tool called a ‘Flexible Credit Loan’ that would enable them to charge up to 180% to 204% annual percentage rate on debt trap type consumer loans. And I cited an example that on a $2500 loan (the max allowed by the Legislation) with minimal principle pay back to keep monthly payments to a minimum (as is usually the case), it would require the borrower to make payments totaling over $2500 over the first six months (of the 2 years allowed by the Legislation) while reducing the amount owed on the principle by less than $100 and still owe over $7500 in payments on the loan, as revealed for an example on page 2 of the attached.

In Section 6-1809 on Page 14, the Bill requires lenders to “REPORT THE LICENSEE’S AVERAGE ANNUAL PERCENTAGE RATE” computed pursuant to the truth in lending act. But no place in the Bill does it mention what the maximum “Annual Percentage Rate” is.

Only at Section 6-1832. Finance charges, on Page 20 near the end of the 21 Page document (and as shown below) does the text give a hint (not readily apparent to many) as to what that ‘Annual Percentage Rate’ is. There it says:

A LICENSEE MAY CONTRACTFOR AND RECEIVE FINANCE CHARGES ON A FLEXIBLE CREDIT LOAN THAT DOES NOT EXCEED THE FOLLOWING IF THE ORIGINAL PRINCIPAL AMOUNT OF THE FLEXIBLE CREDIT LOAN IS AT LEAST FIVE HUNDRED DOLLARS BUT NOT MORE THAN TWO THOUSAND FIVE HUNDRED DOLLARS:
A RATE OF SEVENTEEN PERCENT PER MONTHIF UNSECURED.
A RATE OF FIFTEEN PERCENT PER MONTHIF SECURED WITH PERSONAL PROPERTY.
A LICENSEE MAY NOT COMPOUND FINANCE CHARGES.

And these PERCENT PER MONTH rates equate respectively to 204% (17% X 12 Months) and 180% (15% X 12 Months) annual percentage rates.

That’s exactly the kind of abusive predatory debt trap lending that this S.B. 1316 Strike Everything Bill would allow. Since 2008, when “Payday Loans” with outrages annual percentage rates were prohibited in Arizona, lenders and their lobbyists have been trying to evade the voters’ by seeking out loopholes. Now these lenders again want approval to charge outrageous interest rates, and we can’t let them do that. Arizona does not need this! There are alternatives.

The St. Vincent de Paul’s Society is a leading example among charitable organization across the State that do a great deal of work with those in need of temporary financial help. Those in need would be much better off using their kind of financial assistance to preclude getting into deeper debt and becoming a potential victim of a debt trap lender that would be authorized by this legislation. And some organization such as VFW Posts, DAV Chapters, the Boots for Our Troops Foundation offers similar assistance to Veterans in need of temporary financial assistance, as does the Arizona Military Family Relief Fund (MFRF) that provides similar support for Post 9/11 Veterans and their families in need of temporary financial help.

These are certainly preferred alternatives for those in desperate financial need becoming a victim of death trap predatory lending, and for minimizing or even eliminating the exorbitantly profitable market for such. And in conjunction with these alternatives, this bill is adamantly opposed by the Catholic Conference, the Cooperative Baptist Church, the National Association of Evangelicals, and pastors across AZ.

So I urge you to vote NO on S.B.1316 and any other potential Strike Everything bill on this subject where ever and whenever it may appear on your Legislative agenda. Arizona doesn’t need this kind of predatory debt trap landing under any circumstances.

And I urge you to be speak out against SB 1316, and encourage your colleagues to do the same, and please don’t let yourself feel bullied or intimidated if the lending industry is targeting you as not supporting business or free enterprise, because I assure you that we know that’s not so. Please continue to speak out in any and all available forums with your logical rationale for doing so. Let the public know what’s going on in the Legislature.

And if you are one who has voted for the bill in committee or one who is currently planning to vote yes at the first opportunity, and are personally or collectively being praised by the lending industry for supporting business or free enterprise, I suggest that you ask yourself how your constituents will view your advocacy for bringing back predatory payday-like debt trap lending to Arizona with 180% to 204% annual percentage rates.

Respectfully,