PHOENIX, March 21, 2016 /PRNewswire/ -- The Arizona House of Representatives today passed a bill that gives Arizonans in need of emergency financial assistance a new lending option. The bill, SB 1316, is sponsored by Sen. Jon Kavanaugh (District 23) and now goes to the Senate floor for final passage.
"Today's action is a victory for the thousands of Arizonans who have precious few lending options," said Rep. JD Mesnard (LD-17), the lead House sponsor of the legislation. "Flex loans offer a choice for those who lack the collateral or credit to obtain more conventional loans to help with emergencies and financial hardships. They also protect consumers from offshore, unregulated online lenders and illegal lenders."
Nearly 20 percent Arizonans are "underbanked" according to the FDIC's 2013 National Survey of Unbanked and Underbanked Households. Without access to traditional banking services, these households have few lending options and often turn to online and unprotected loans, pawn shops or auto title loans as their only options. If they do not have auto titles or goods to pawn, then there are even fewer borrowing options.
"Thirty-five other states in America have more lending choices than Arizona," Sen. Kavanagh said. "Arizonans should be allowed to make their own financial decisions – and the government should keep its hands out of their private lives and decisions."
In the House, SB 1316 was amended to include the following:
- Add a minimum term length of 45 days
- Eliminate the ability to make a secondary title loan
- Adds a 20-year sunset and mandatory review after 10 years
Details of SB1316:
- Loan amounts are capped at $2,500
- Maximum loan term of 24 months
- Voids any loan that is made outside of the restrictions outlined in the proposed policy
- Requires lenders to follow Truth in Lending Act disclosers as required
- Requires lenders to alert consumers that disclosures in Spanish may be requested
- Clarifies that consumer flexible credit loans will not be available to active duty military and their families
- Clarifies how loans are made electronically
About the Arizona Financial Choice Association
The Arizona Financial Choice Association is an organization made up of national, regional and Arizona-based financial services companies including: Community Choice Financial, Inc.; Axcess Financial Services, Inc.; Speedy Cash Holdings Corp; Check into Cash, Inc.; PLS Financial, Inc.; Checkmate; and Cash Time. The companies operate within Arizona and 34 other states as well as overseas. They also finance title loans, conduct check cashing, issue prepaid debit cards, have bill pay services, and in states where allowed, offer other small loan products and payday loans. AFCA member companies currently represent more than 2000 locations and 1,700 employees in Arizona.
Contact: Melissa DeLaney, 202-431-4441, firstname.lastname@example.org
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SOURCE Arizona Financial Choice Association