Coalition launches initiative to cap auto title loan costs
PHOENIX (AP) — A newly formed coalition that includes faith, consumer and civil rights groups has filed an initiative that would cap the interest charged on auto title loans.
The group known as Arizonans for Fair Lending filed paperwork for the initiative with the Secretary of state’s office on Wednesday. The group must collect nearly 240,000 valid signatures by July 2, 2020, to qualify for that year’s November general election ballot.
The Arizona Fair Lending Act would cap 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.