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Ballot initiative to ban securities lending runs out of money

Supporters of a bid to ask voters to ban securities lending have quit amid the inability to raise the funds they need to get it – and keep it – in November’s ballot.

Rodd McLeod, campaign consultant for Arizonans for Fair Lending, said the federal courts’ refusal to strike down a petition signing law has increased costs beyond the point supporters are willing to fund. And without money, he told Capitol Media Services, it makes no sense to keep collecting signatures.

The initiative sought to ask voters to remove the exemption the industry now has from a state law that limits qualifying interest to no more than 36% per year. Current title loans can carry an annual percentage rate of up to 204% per annum.

Speedy Cash is a securities lender with 13 locations in Metro Phoenix.

Backers needed 237,645 valid signatures as of July 2, 2020 to put the question on the general election ballot that year.

But McLeod said the law, signed into law in 2014 by the Republican-controlled Legislature, actually requires circulators to collect far more than that to prevent signatures from being disqualified. And even if they do, he said, the law gives enemies of the measure new legal tools to try to stop it from going to voters.

On paper, the law in question requires paid circulators to register and provide an address where they can be subpoenaed.

Crucially, however, is that judges are required to reject all signatures of any circulator who fails to appear in court, whether or not there is other evidence to show that the signatures themselves are valid. and were legally collected.

McLeod’s group was so concerned that they asked a federal judge to strike down the laws.

In a 19-page ruling last year, Justice Susan Bolton acknowledged that the 2014 law could make it harder for those proposing their own laws and constitutional amendments to submit their proposals to voters.

But Bolton said the challengers had not presented enough evidence – at least not yet – to show that allowing it to remain in force poses irreparable harm, either to voters or to those hoping to propose future measures. vote. So she agreed to allow the law and its hurdles to stay on the books pending a full trial, which is unlikely to happen before the deadline for groups like McLeod’s to turn in their signatures.

“We don’t have the money as a campaign not only to collect the additional signatures due to those who are going to be rejected on these legal details, but also to bring people to court at the same time” to confirm the signatures that they collected. “It’s also expensive.”

In fact, this might be the most expensive part, since anyone who wants to challenge the legitimacy of an initiative campaign need only file a lawsuit to challenge the validity of the signatures and then issue subpoenas to appear for all paid circulators.
McLeod said someone could have collected 1,000 signatures.

“But the person who witnessed your signature, the paid circulator, is not available on a Thursday next August to appear in court in Phoenix because he may be living in Sierra Vista,” he said. declared. “So your signature is thrown away, your voice is silenced, because of a technicality related to the person who collected the signature.”

McLeod pointed out that lawmakers, in enacting the requirement, did not extend it to petitions to nominate candidates, including themselves.
Bolton, in his decision, noted this distinction.

State prosecutors countered by citing the Voter Protection Act. This constitutional provision states that once a measure is approved by the ballot box, it cannot be repealed by the Legislative Assembly, but must instead be returned to voters.
Bolton was skeptical.

“The ‘near-permanence’ of an initiative once passed is more a legal outcome than a compelling government interest in justifying the method chosen (by the state) to induce compliance with subpoenas,” wrote the judge.

Still, none of that was enough for Bolton to grant a motion to bar the state from enforcing the law in the 2020 election.

The challengers appealed his refusal to enjoin the law. But that case won’t be heard until April.

Bolton is not the only judge who has refused to strike down the law. The Arizona Supreme Court reached a similar conclusion in 2018.

“The Act represents a reasonable means to promote transparency, facilitate the judicial fact-finding process, including adherence to valid mandatory process, and mitigate the threat or fraud or other wrongdoing infecting the initiative process,” Judge John Lopez wrote for the court. “This furthers the constitutional purpose of the initiative process by ensuring the integrity of signature collection through reasonable means.”

Voters can still weigh in on the topic of interest limits – but in a whole different way.

A ballot measure pushed by the National Credit Alliance would overturn virtually all laws that currently limit annual interest charges to 36%. Sean Noble, the group’s campaign manager, called it “a stand against socialism.”

As a constitutional amendment, it needs 356,467 valid signatures on the petition by July 2 to qualify for the November ballot.