State voters smack down payday loans

PHOENIX -- Voters apparently have decided they don't want to keep payday loans legal in Arizona.

In one of the most expensive campaigns in state history, the lenders sought approval of Proposition 200 to permanently protect their right to operate in Arizona -- at least until some other ballot measure changes that.

The lenders had collected more than $14.6 million. But it falls short of the successful $21.1 million campaign by Indian tribes in 2002 to get the exclusive right to operate casinos in Arizona. State law caps allowable interest at 36 percent a year.

In 2000, however, lawmakers agreed in 2000 to create a special exemption for payday lenders. These companies provide cash for a check they know is not good, agreeing to hold it for up to two weeks at fees up to $17.84 per $100 borrowed, up to $500.

That exemption, however, expires July 1, 2010. Lenders went to the ballot after lawmakers refused to extend that. Defeat of Proposition 200 requires them to live under that 36 percent limit, far short of the more than 450 percent that the current fees compute to, and still more than the 391 percent cap the lenders had offered to convince voters to approve the measure.

Industry lobbyists said prior to Tuesday's vote there is no way to offer short-term, no-collateral loans at that 36 percent annual interest rate. Without a change in the law, they said, the lenders cannot operate in Arizona.

Defeat does not mean the immediate closure of payday loan stores. Industry lobbyists could still try to convince lawmakers between now and July 1, 2010 to allow them to continue to operate. Repeated calls to the pro-200 campaign were not returned.
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Voters rejected an effort to loosen some key provisions in Arizona's employer sanctions law.

Proposition 202 had the same penalties as the state statute which took effect in January. Firms can have their state licenses to do business suspending for up to 10 days for knowingly hiring undocumented workers; a second offense within three years puts the company out of business.

But backers of Proposition 202 billed the measure as getting tough on companies that knowingly hire undocumented workers. They
cited provisions which allow the criminal prosecution of employers who purposely take false IDs.

Opponents noted, though, that many of the elements of the initiative, however, would make it more difficult to prosecute employers than under the current law, including a requirement to show the company had "actual knowledge'' the employee was in this country illegally.

Funding for the initiative came from some of the same groups that sued to void that law, which took effect Jan. 1. So far, though,
both a trial judge and federal appellate court have upheld the constitutionality of its provisions.

"It's disappointing,'' said pro-202 spokesman Garrick Taylor. But Taylor said he did not know whether voters rejected the measure because they did not buy the claim that the initiative actually would tighten up laws against illegal immigration.

Also defeated was Proposition 201 which would have required developers to provide a 10-year warranty on all new homes and give buyers some additional rights if problems developed. It was financed by the Sheet Metal Workers union.

But home builders, funding the opposition, countered that the proposal would encourage people to sue rather than try to work out their problems through mediation.

Voters also refused to throw a new barrier in the path of many future initiatives.

Under the terms of Proposition 105, ballot measures which imposed new taxes, or new spending requirements on government or even private companies or individuals, would have been approved only if they got the votes of a majority of those actually registered.

By contrast, the constitution now requires only a simple majority of those who actually voted on the measure.

Other measures sent to voters Tuesday include:

- Proposition 100, approved easily, constitutionally bars state or local governments from ever imposing a tax on the sale or transfer of real estate. There is no such levy now and the Arizona Association of Realtors, which financed the campaign, wanted to keep it that way.

- Proposition 101, still too close to call, is designed to ban any state law which would impose universal health care on Arizona residents or businesses. It would bar any program that forced people to enroll in any program or limited their choice of doctors.

- Proposition 300, which was rejected, sought to give lawmakers a $6,000-a-year pay raise, to $30,000. The last pay increase approved by voters was in 1998.

With 91 percent of polls reporting, here are the latest numbers for state propositions as of 11:05 p.m. Tuesday night: (Numbers do not include early ballots dropped off Election Day)

Proposition 100 (Home tax)
Yes -- 1,308,515
No -- 390,738

Proposition 101 (Medical choice)
Yes -- 833,547
No -- 835,461

Proposition 102 (Same-sex marriage ban)
Yes -- 1,001,808
No -- 773,390

Proposition 105 (Initiative vote requirement)
Yes -- 573,526
No -- 1,102,937

Proposition 200 (Payday loans)
Yes -- 684,080
No -- 1,005,318

Proposition 201 (Home warranty)
Yes -- 369,614
No -- 1,313,996

Proposition 202 (Employer sanctions)
Yes -- 697,520
No -- 1,014,149

Proposition 300 (Legislative pay)
Yes -- 608,899
No -- 1,106,689