Payday Loans for Arizona | Repealing Prop 200?

“What’s All the Commotion About?”

Payday loans are still a hot topic in Arizona, where the pain of Proposition 200 is still felt. In a recent “Letters to the Editor” in the Arizona Republic, those in favor of banning lenders from operating in the state past 2010 are out in full force because legislators may just be recognizing the true needs of their constituency-at-large, those who may not have been represented in the voting process.

Reader Dave Hall from Sun City West points out with clenched teeth that the “sharks” spent $14 million to lobby the voters in support of keeping payday loans available in Arizona. Yet at the same time, perhaps banks and credit unions spent just as much (or more) to mobilize their own support against Prop 200? It isn’t far-fetched at all.

Welcome to the world of lobbying

This is how American government works. Per Wikipedia, “Lobbying includes all attempts to influence legislators and officials, whether by other legislators, constituents or organized groups. Governments often define and regulate organized group lobbying.” There are always multiple sides to an issue, so lobbyists acting on behalf of their interest group come from all sides.

Economist Thomas Sowell in his book “Knowledge and Decisions” defends the type of corporate lobbying that goes on with payday loans or any other lobby. He says it is “simply an example of a group having better knowledge of its interests than the people at large do of theirs.”

A fresh serving of perspective

On an even larger scale, the case for lobbying has legal precedence and is an accepted part of politics. The U.S. Supreme Court does not support those who have tried to regulate grassroots-style lobbying, as the Constitution does not suggest such censure:

It is said that indirect lobbying by the pressure of public opinion on the Congress is an evil and a danger. That is not an evil; it is a good, the healthy essence of the democratic process.

Former U.S. President Bill Clinton paints a clear picture of the place lobbyist have in American politics. He said this is regards to wife Hillary’s receipt of lobbyist money for her recent presidential campaign:

Lobbyists are registered, they register with the federal government and can give the same amount of money anybody else can. It’s all the people they represent. So all these people who don’t take money from lobbyists, they take money from the lobbyists’ spouses, their children, their brothers, their sisters, from all the people they represent. It’s a distinction without a difference, I think. There’s no significant financial gain, because there’s not that many lobbyists. If we’re going to take money from the guys who pay the lobbyists, why treat them [the lobbyists] as less than full citizens?

Here’s the uncut interview with Bill Clinton:

Were all Arizona voices on payday loans heard?

Lobbyists are a necessary part of lawmaking, as they help to inform lawmakers who may be removed from the problem to see viewpoints clearly. In the case of the industry responsible for payday loans, legislators are not a part of the same socioeconomic group as many short-term loan customers are. It helps to have added perspective when making decisions. The issue of Proposition 200 could be revisited with fresh perspective from both sides, not just the lobbyists on the side of the banks.

Senate-elect Russell Pearce, a Republican out of Mesa, Arizona, has decided he will push to extend the licensing for payday loan businesses, as some added perspective has apparently enabled him to see that payday loans are not the trap that destroys credit ratings, just as a cheeseburger does not condemn someone to a life of obesity. Individual restraint and responsibility will always be paramount.

You have the freedom to read on… PART II of this post is here. There may be payday loans in Arizona past 2010 yet.