<p>Tuesday: the Arizona House gave tentative approval to a proposal that would allow previously-barred payday lenders to offer new high-interest loans. ;More than an hour of heated arguing preceded the voice-vote on Senate Bill 1316. The debate pitted Arizona Republicans backing the new loan offerings against Dems who slammed the product for its exorbitant interest. ;</p>
<p>The proposal, introduced by Senator John Kavanagh, would allow &ldquo;flex loans&rdquo; with interest rates between 15-17% a month. It&rsquo;s a restructured version of a similar bill that failed in 2015. ;</p>
<p>The Dems fiercely oppose the proposal, complaining that it would draw loan sharks back into Arizona. In 2008, voters heartily rejected a ;proposal that would have allowed payday lenders charging up to 400% annual interest for non-secured loans to remain open permanently. Those lenders were forced to close in 2010 when their temporary authorizations expired. ;</p>
<p>A similar ban was successful in New Hampshire in 2008, pushed mainly by former State Rep. Mike Kaelin. ;&#8220;Its terrible for the consumers, if you think 22% per year is bad on your credit cards, try rates of 300, 400, or 500% and that&#8217;s on the low end. These are provided to people who already are in debt.  ;A thousand dollar loan can cost you $200 to $300 per month, and that&rsquo;s forever!&#8221; he said. The bill was overturned two years later ;due to bank lobby pressures.</p>
<p>Under Kavanagh&rsquo;s proposal, the new &ldquo;flex loans&rdquo; will be unsecured by vehicle titles or other collateral and will carry an annual interest rate of 200%. That means a $2,500 loan would end up costing you $10,000 &ndash; <em>if you paid it back in two years. ;</em></p>
<p>Arguing with Republicn Rep. JD Mesnard, Democratic Rep. Debbie McCune Davis asked, &ldquo;I know that you believe that this could provide some benefit, but why would we allow out-of-state companies to come in here and re-establish predatory lending in this market?&rdquo; ;</p>
<p>Mesnard replied that low-income individuals with bad credit need access to loans for emergences. The alternatives are far worse, ranging from loan sharks to illegal online lenders. ;&ldquo;There&rsquo;s nowhere for folks to go so they go to loan sharks who will maybe chop off their fingers if they don&rsquo;t pay back a loan, or they&rsquo;re doing something online illegally,&rdquo; said Mesnard. &ldquo;They will have consequences far more severe than the very few if any consequences that are outlined in this bill because of the protections we are putting in place.&rdquo;</p>
<p>Mesnard also questioned why they should dislike out-of-state companies, saying, &#8220;There&#8217;s nothing wrong with that. Where they choose to headquarter they choose to headquarter.&#8221; ;</p>
<p>The House will hold a formal vote on the issue later this week before sending it over to the Senate. ;</p>
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