AZ State Veterans Legislative Update 7 February 2016: SB 1447- Predatory Lending

Subject:         SB 1447: ‘consumer lending; licensing; regulation’


     Predatory lending is back on the State Legislative agenda


And while it probably does not apply to you, please consider how it will affect some other Veterans 

and others in need of temporary financial help, and join us in helping to defeat this Predatory Lending Bill.



Arizona Senate Bill SB 1447: ‘consumer lending;  licensure;  regulation’ is another attempt by payday lenders and their lobbyists to ram through an amendment to Arizona Revised Statute (A.R.S.) that would allow predatory lenders to make high interest secured and unsecured loans.  The payday lenders are trying to disguise their predatory product by calling it a “Flexible Credit Loan”. It’s really a DEBT TRAP, particularly for veterans and other families in need for temporary financial help. In 2008 we were instrumental in killing outrageous fees ‘Payday Loans’ in Arizona, and 60% of Arizonans voted to cap interest rates at the Federal 36% annual interest rate, banning predatory consumer loans. And in 2015 we were instrumental in killing HB 2611 ‘consumer flex loans’. Now it’s time to stop SB 1447 early in its path to a full Senate vote.


The full 15 page text of SB 1447 can be accessed by searching on in your browser. At that site, click on “Bills” then click on “Bill Info” in the drop down menu. At the next screen under Senate Bills click on “SB1401 through SB1450”. At the next screen, then scroll down and click on “SB 1447”. At the next screen click on “Show Versions”, then click on “HTML’ or PDF at your discretion (recommend PDF).


While not readily evident, SB 1447 would allow so called ‘Flexible Credit Loan’ annual percentage interest rates of 180% on secured loans and 204% on unsecured loans. While the bill mentions “Annual Percentage Rate” at Section 6-1801. 2. and at Section 6-1809 where they require lenders to “REPORT THE LICENSEE’S AVERAGE ANNUAL PERCENTAGE RATE”, no place in the Bill do they mention what the maximum “Annual Percentage Rate” is. 


Only at Section 6-1832  Finance Charges on page 14 of the 15 page document do they give a hint (hidden to most as was the case last year) at what that ‘Annual Percentage Rate’ is, where it says:

6-1832. Finance charges









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


That’s exactly the kind of abusive debt trap lending that this Bill would allow. Since 2008, when we were instrumental in killing “Payday Loans”, lenders in Arizona have been trying to evade the voters’ will by seeking out loopholes.  Now these predatory lenders want to charge outrageous fees, and we can’t let them do that.


Debt trap lenders market their loans as a one-time quick fix, but the interest rates and fees are so high borrowers often end up not being able to afford to pay off their loan and cover their normal living expenses. They often end up in the debt trap taking out loan after loan after loan, paying new fees each time. It’s perfectly clear that this is what these payday lenders will do.. We know these loans can do real harm in our communities.


And again, we and the voters have spoken loud and clear in 2015 and 2008


Please consider calling and/or emailing members of the Senate Finance Committee to make your voice heard to oppose  SB 1447. We don’t want debt trap lending in Arizona. Don’t delay because the bill is scheduled to be heard in the Senate Finance Committee on Wednesday 10 February at 0900.


Senate  Financial Committee Member names, Email addresses. and phone numbers:


Steve Farley;         [email protected];        (602) 926-3022    
Debbie Lesko;      [email protected];         (602) 926-5413    
Lynne Pancrazi;    [email protected];     (602) 926-3004    
Steve Yarbrough;  [email protected];  (602) 926-5863    
Kimberly Yee;      [email protected];             (602) 926-3024  



Please consider following the guidance below to send the recommended message (or edited if desired). Please send the message to the Senate Finance Committee members today, this evening or ASAP thereafter so that our Emails will be at the top of their “In Boxes” on Monday morning or soon after they arrive at work.


I have drafted text for an Email (below) that I recommend you review (and edit if desiredafter it becomes the only text left in the Email to be sent to the Committee Members.



Senate Finance Committee Member Email addresses:

[email protected][email protected][email protected][email protected][email protected];

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 the State Senate Finance Committee Members:


  1. Click on “Forward”from this message so that the attachment will be included with the message that will then be processed for sending. (Note: Clicking on “Forward” doesn’t send it. It only sets it up to complete the processes below before hitting “Send”).
  2. Then delete the Subject line of the new message, and copy SB 1447: ‘consumer lending;  licensure; regulation’here or at the beginning of the text of this Email and paste it on the Subject line.
  3. 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 Senators or their staff to delete your message if you are not a constituent before they read at least the first sentence in the message. If you are a constituent of one of the Senators, in addition to sending an Email to all of the others, consider repeating the process and send a message to your Senator with your address, etc. shown.
  4. Copy the five Senate Finance Committee Member Email addressesabove (high light the whole line of 5 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.
  5. Now High Light the blue line shown below (place your curser just below the blue line) and sweep upward acrosseverything above it.
  6. 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. 7.Then you can hit “Send” to send your Email.


Draft Message



While I as a Veteran may not be one of your constituents, but as a member of the Senate Finance Committee representing all Arizona citizens, I am seeking your support in opposing Senate Bill SB 1447: ‘consumer lending;  licensure; regulation’. SB 1447 is an attempt by predatory payday lenders and their lobbyists to ram through an amendment to Arizona Revised Statute that would allow predatory lenders to make extremely high cost loans.


While SB 1447 prohibits making loans having an annual percentage rate greater than 36% to members of the US Armed Forces, their dependents and Guard and Reserve personnel on active duty (Section 6-1811. C.), payday lenders and their lobbyists are trying to open the door to a predatory product calling it a “Flexible Credit Loan” that’s really a DEBT TRAP, particularly for veterans and other families in need for temporary financial help. In 2008, 60% of Arizonans voted to cap interest rates at the Federal 36% annual interest and to ban predatory consumer ‘payday loans’. And in 2015 we were able to kill House Bill HB 2611 ‘consumer flex loans’.


While SB 1447 requires lenders to annually report their “average annual percentage rate” (Section 6-1809), nowhere in the bill do they say what the maximum annual percentage rate is.  Only in Section 6-1832  do they specify: “a rate of 17% per month if unsecured” and “a rate of 15% per month if secured with personal property”. Not readily evident to some, these equate respectively to 204% and 180% annual percentage rates.


For example, on a one year $1000 secured loan, if only the 15% monthly interest is paid monthly until the time the $1000 loan must finally be paid off in one lump sum at the end of the term of the loan, especially when the borrower is extremely hard pressed at the time of  taking out the loan, the borrower will have paid $1700 in interest on the $1000 loan. However as with most loans, higher monthly payments include a portion of the principle in addition to the required interest (sometimes with a relatively large lump sum final principle pay off as part of final payment), the cumulative 15% monthly interest over the year will be somewhat less than $1700 in interest to pay off the $1000 loan.


As an example, the attached contains several amortization tables including for example Figure 2. on the second page, That table shows that for an unsecured loan of $2500 over a two year period, (the max authorized by this legislation), the borrower would pay a total of $10,441.15 in monthly payments, including $9,441.15 in interest to pay off a $2,500 loan over two years.


That’s exactly the kind of predatory lending this Bill would allow. We can’t let them do that.


Faith leaders, veterans groups, and sensible people on both sides of the aisle are opposed to abusive loans like SB 1477 would legalize. Predatory Loans have no place in Arizona and voters have said so, loud and clear in the past. And it’s time to do so again.


Please vote to oppose SB 1447 in the Finance Banking Committee.