Payday loans proposition a positive step

The payday loan business has gotten a bad reputation, and deservedly so in some cases, for taking advantage of low income people desperate for money.
 
Voters will decide in the general election in November whether that means the businesses should be banned from operating in Arizona.
 
If voters reject Proposition 200 - which repeals a July 1, 2010 termination day for pay loan business licensing in Arizona - then the option of getting one of these quick cash loans will be gone.
 
If, on the other hand, voters approve Proposition 200, payday lending will continue and certain "reforms" or changes will be made in how these businesses operate, including some of the objectionable practices that have given them a bad reputation.

Like many things, payday loans are not a black and white issue, despite what proponents or opponents may say.
 
For low income people, they can be a tool - if used properly and cautiously - in making ends meet until they get their next check and can pay back the loan. For them, it may be one of a very few options to obtain temporary money.
  
There is a big trade-off for this convenience, however, in the form of very high interest rates - rates that opponents call unconscionable. Borrowers also can get in financial trouble and end up relying on a cycle of quick loans which overtake their earning ability.
 
We do not view payday loans as being wise for most people, and feel they should be avoided if at all possible. But on the other hand we see no reason to eliminate them entirely, as long as protections are in place to help prevent unscrupulous lender behavior and to ensure the borrowers are completely informed about the terms of the loan. Proposition 200 is a positive step in that direction.
 
As for the lending rates, the state can set an interest limit if it chooses, as it does with other credit practices. The reality, however, is that those who get payday loans often are poor credit risks and a higher interest rate is the result, since there is more risk for the lender.
 
We don't agree with Arizona General Terry Goddard - who wants the payday loan industry to go away - that people aren't wise enough to protect themselves and therefore the government needs to step in and keep them from doing bad things.
 
To us, freedom of choice is paramount. People lead different lives and what is best for one person may not be best for another. They need to be able to have choices - fully informed ones. We think Proposition 200 does that.