PHOENIX, Feb. 10, 2016 /PRNewswire/ -- Members of the Senate Finance Committee today were briefed on Senate Bill 1447, which is sponsored by Sen. John Kavanagh (District 23), and gives consumers protected access to small loans in a legal and regulated marketplace.
"There is a compelling and compassionate need for additional lending choices in Arizona," Sen. Kavanagh said. "SB 1447 provides those who do not have access to traditional banking, or with damaged or no credit history, access to limited small dollar loans in a safer, better-managed environment than existing alternatives."
According to the FDIC's 2013 National Survey of Unbanked and Underbanked Households, 93 million Americans are unbanked or underbanked. In Arizona, their only existing legal lending options are auto title loans or pawnshops – which are of no use if one does not own a vehicle (or have equity in it), or have anything of value to pawn – or unregulated online lenders, which often are offshore, anonymous, and charge interest rates far in excess of legally-prescribed amounts and leave consumers with no protections or recourse.
"There are many misperceptions about these types of loans and those who use them, and I'm thankful to Sen. Kavanagh for both his leadership in steering this bill and for working to dispel these myths," said David Schwarz, president of the Arizona Financial Choice Association, which supports the policy. "While the bill did not make it out of committee today, I will continue to work with legislators in both the Arizona House and Senate to support and move this important policy forward this session."
Details of SB 1447:
- 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 disclosures 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
For more information, visit www.azfinancialfreedom.com.
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 150 locations and 1,700 employees in Arizona.
SOURCE Arizona Financial Choice Association