Arizona official correct to take loan hard line

The voters of Arizona were clear when they said they did not want a continuance of so-called payday loan operations in our state, and now Arizona Attorney General Terry Goddard wants to make sure their wishes are followed.

He is afraid that current payday loan operators in the state will try to continue their high-interest loan practices, as has happened in other states that have restricted their operations. They have done this elsewhere through sham debit cards or auto-title loans.

Auto-title loans are legal in Arizona, and some payday loan businesses are planning to offer them. But Goddard is suspicious, saying his office suspects customers will be told to “shift to auto-title loans, even if they don't have a car.”

That is a clear subversion of the law, and the attorney general says his staff will closely examine these transactions to ensure there legitimacy and aggressively pursue violators. He also plans to establish a telephone hot line for consumers to report violations and a public education program so consumers are aware of the restrictions on high interest lending.

Some believe the opposition to payday lending was an overreaction and that the practice served a valid purpose in our state of providing short-term loans to people who had no other options to get money they needed.

However, many saw the issue differently and they must end as of June 30. We would hope that all payday loan operations would respect that decision and not try to subvert it. If not, the attorney general is justified in enforcing the will of the people.