Group pushing title loan interest cap pulls plug on effort
PHOENIX (AP) — A group said Monday it is pulling the plug on an effort to place a citizens initiative on the November ballot capping interest rates for auto title loans at 36%.
Arizonans for Fair Lending said the cost of a state law that makes it easier to challenge petitions has made it impossible to move ahead with their effort. They needed to collect nearly 240,000 valid signatures before the July 2 deadline and then defend the signatures as valid.
At issue is a 2014 law that allows opponents of an initiative to subpoena paid petition circulators to appear in court. If the petition-gatherer fails to show up in court, all the signatures they collected are thrown out whether they are valid or not.
That has led opponents to call circulators into court en masse to challenge their petitions. A lawsuit seeking to invalidate the law is working its way through the courts but so far the law remains on the books.
Jim Barton, an attorney for the coalition of faith, consumer and civil rights groups that announced the effort last May, said proponents would have had to collect double or triple the number of signatures to get a measure on the ballot and then spend money to defend them in court.
The Arizona Fair Lending Act would have capped annual interest for small auto loans proponents say trap the poor in a cycle of debt at 36%. Current rates can exceed 200%.
Arizona voters banned payday loans in 2008, but the industry shifted its focus to auto title loans. Those loans use a car title to secure a short term loan.