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Arizona Cash Lenders
Arizona Payday Loan Laws & Legislation
Payday lenders in Arizona are reviewing creative methods to remain in business after the June 30 ban of the payday loan industry.
Payday loan lending businesses are now prohibited from operating in the state and, as a result, many Arizona payday loan lenders are considering converting to car title or auto-title loans and check cashing operations, which appears to be legal under Arizona law. Payday loan lawyers and compliance experts are researching these business models now.
Our clients and others are weighing the advantages and feasibility of switching to car title or auto title loans in order to continue to serve their customers. Demand for simple, no-hassle, minimum documentation micro-lending products remains huge! Unfortuately, Arizona Regulators fail to realize this demand. So, the Regulators simply outlawed payday loans leaving thousands of Arizonan’s without access to $300 to $1500 loans. Check cashing services have also grown amid tighter state regulations.
A lender can charge about 200 percent on a car title loan and operators representing about half the payday stores in the state have applied for a license to make these loans.
Another approach being used by Arizona payday loan operators is to offer prepaid cards that include an overdraft feature that allows customers to borrow against money they don’t yet have — at rates equal to a payday loan.
The payday loan industry faces increased regulations from many states. Payday loan lenders narrowly escaped the financial regulatory reform bill, which would have required federal oversight of the payday loan industry. Millions of consumers through out the country welcomed this development as their ability to choose the payday loan product to solve short-term financial problems is a high priority.
Legal Status: Effective June 30, 2010 no longer legal
Citation:
Ariz. Rev. Stat. ยง 6-1251 et seq.
Loan Terms:
Maximum Loan Amount: $500
Loan Term: Min: 5 days
Maximum Finance Rate and Fees: 15% of check
Finance Charge for 14-day $100 loan: $17.65
APR for 14-day $100 loan: 459%
Debt Limits:
Maximum Number of Outstanding Loans at One Time: One
Rollovers Permitted: Three (extensions)
Cooling-off Period:
Repayment Plan:
Collection Limits:
Collection Fees: $25 NSF fee + actual charges assessed by the financial institution
Criminal Action: Prohibited
Regulator: Arizona Department of Financial Institutions
Address: Financial Enterprises Division, 2910 N. 44th Street, Suite 310 Phoenix AZ 85018
Phone: (800) 544-0708
Fax: (602) 381-1225
Regulator Website