Activists who had hoped to put controversial auto-title loans before Arizona voters in this fall’s election say they are giving up the effort for now, citing a lack of money and time.
Community groups comprising Arizonans for Fair Lending had tried to secure more than 240,000 valid signatures to qualify the measure for the November ballot.
Support for the proposal, which would have curbed certain high-interest consumer loans, is overwhelming and crosses political party lines, but the effort announced last July will be put on hold, said Kelly Griffith, executive director of the Center for Economic Integrity, a Tucson group that is part of the coalition.
“We’re out of time and money” for this year’s ballot, she said, adding that it’s too early to know when the effort might be resurrected.
How auto title loans work
Auto-title loans feature high interest rates that, critics say, trap borrowers in a debt cycle. “These loans are not life preservers but anchors that will drag you down,” Griffith said.
The effort to curb auto-title lending comes 12 years after Arizonans defeated Proposition 200, which would have extended payday lending indefinitely. An enabling law expired two years later, ending payday loans here.
Auto-title loans allow vehicle owners to borrow against the equity in their cars and trucks, using their vehicle titles. Critics say the loans charge annualized interest of up to 204%. The proposed Arizona Fair Lending Act would not have banned the loans but, rather, would have capped interest at an annualized 36% while prohibiting balloon payments and restricting other practices.
“We thought we had taken care of (predatory lending) in 2008,” said state Sen. Lela Alston, a Phoenix Democrat, speaking at a kickoff rally for the auto-title signature-gathering initiative last July.
Groups supporting the signature-gathering drive at its inception last year included the Military Officers Association, the Teamsters, Living United for Change in Arizona (or LUCHA), the St. Vincent de Paul Society of Tucson, the Center for Responsible Lending, the Southwest Fair Housing Council and the NAACP.
In July, the groups predicted that they would need to collect nearly 240,000 valid signatures by July of this year to qualify the measure for the ballot. But the real total would have been much higher because many of those signatures could have been challenged in court and some thrown out, Griffith said.
Griffith said she didn’t know how many signatures had been collected, but the effort was destined to need many more paid staff members to meet the deadline, doubling or tripling the likely expenses.
“In the next effort, we’ll have enough money to see it all the way through,” she said.
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