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Arizona effort to restrict automatic securities lending not on November ballot

Activists who had hoped to offer Arizona voters controversial auto title loans in this fall’s election say they are abandoning the effort for now, citing a lack of money and time.

Community groups including Arizonans for Fair Loan had tried to obtain more than 240,000 valid signatures to qualify the measure for the November ballot.

Support for the proposal, which would have curbed some 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 running out of time and money” for this year’s poll, she said, adding it’s too early to know when the effort might be revived.

How Auto Title Loans Work

Auto-title loans have high interest rates that critics say trap borrowers in a cycle of debt. “These loans are not life jackets but anchors that will drag you down,” Griffith said.

The effort to curb auto loans comes 12 years after Arizonans defeated Proposition 200, which would have extended payday loans indefinitely. Enabling legislation 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 the titles of their vehicles. Critics say the loans charge annualized interest of up to 204%. The proposed Arizona Fair Lending Act would not have banned lending, but instead would have capped interest at 36% annualized while banning lump sum payments and restricting other practices.

“We thought we had taken care of (predatory lending) in 2008,” State Sen. Lela Alston, a Democrat from Phoenix, said at a kickoff rally for the title signature-raising initiative. automatic last July.

Broad coalition

Groups supporting the signature-gathering campaign 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 NAACP.

In July, the groups predicted they would need to collect nearly 240,000 valid signatures by July this year to qualify the measure for the ballot. But the actual total would have been much higher because many of those signings could have been challenged in court and some rejected, Griffith said.

Griffith said she didn’t know how many signatures had been collected, but the effort was intended to require many more paid staff to meet the deadline, likely doubling or tripling the expense.

“In the next effort, we’ll have enough money to see it through,” she said.

Contact the reporter at [email protected] or 602-444-8616.