Wednesday, March 23, 2016

Hale, Benally rail against new predatory lending product

STATE CAPITOL, PHOENIX – Rep. Albert Hale, D-St. Michaels (District 7), and Rep. Jennifer D. Benally, D-Tuba City (District 7), opposed a bill that would allow a new predatory lending product that could keep people trapped in debt.

Republicans in the Arizona House of Representatives recently passed SB 1316, a bill that legalizes predatory loans with interest rates of around 200 percent.  In 2008, nearly 60 percent of Arizona voters rejected payday loans, similar to loans proposed in SB 1316, in spite of the industry spending about $15 million against the measure, according to records filed with the Arizona Secretary of State’s Office.


“I’m concerned the companies that offer these loans are targeting Native Americans, specifically by opening locations near the Native American nations, where unemployment remains a serious issue,” Hale said.  “The astronomical interest rates authorized in SB 1316 can keep people in debt for a long period of time, even if they only borrow a little bit of money. It’s a debt trap that takes advantage of people.”
 
Benally added that this type of product can compound a family’s financial crisis.

“People are being put in terrible situations because of these loans. They have to decide whether to eat or to feed their children,” Benally said. “This is not an option for Arizona families. It’s not a solution; it's designed to keep people in debt.”

Hale said the Legislature should be more interested in investing in people, instead of predatory lending companies.

“If we want to help everyone in Arizona, we need to come up with real solutions,” Hale said. “We need to invest in people, education and infrastructure. We could start by ensuring Native American nations receive their fair share of the state-collected transaction privilege tax.”

The bill now returns to the Senate for final approval. To view the full language of the bill, click here:http://www.azleg.gov/DocumentsForBill.asp?Bill_Number=1316&Session_Id=115&image.x=0&image.y=0


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