Officials with AARP Arizona and its community partners intend to defeat "Consumer Lender Loan" House Bill 2526. The Arizona Senate Finance Committee on March 19 voted to send the proposal to the full Senate floor.
AARP opposes the measure, saying it raises the cost of small loans by allowing loans as large as $3,000 to charge an annual interest rate of 36 percent plus an origination fee of up to $150. This is more than double the origination fee size that is currently allowed. HB 2526 also does not require underwriting standards that determine whether or not a borrower can repay a loan.
"We will continue to fight this bill as it increases the rewards of lenders, and it's not in Arizona's best interest to allow these high-cost loans to become more widespread," AARP Arizona Advocacy director Steve Jennings said. "Vulnerable families, minorities and seniors are more likely to be entrapped into a high cost cycle of debt through these types of loans if this bill is allowed to become Arizona law."
AARP has asked Arizona residents to contact their state senators and ask them to reject HB 2526.