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Arizona Ballot Initiative To Ban Title Loans Runs Out Of Cash

March 11th, 2022

Arizona Ballot Initiative To Ban Title Loans Runs Out Of Cash

Backers of a bid to ask voters to outlaw title loans have quit amid the inability to raise the cash they need to get it – and keep it – on the November ballot.

Rodd McLeod, campaign consultant for Arizonans for Fair Lending, said the refusal of federal courts to void a law on petition signatures has raised the costs to beyond the point that supporters are willing to fund. And without the money, he told Capitol Media Services, it makes no sense to keep gathering signatures.

The initiative sought to ask voters to remove the exemption that the industry now has from a state law which limits allowable interest to no more than 36% a year.

But McLeod said that the law, enacted in 2014 by by the Republican-controlled Legislature, actually requires circulators to gather far more than that as a cushion against signatures being disqualified. And even if they do, he said, the law gives foes of the measure new legal tools to try to keep it from ever going to voters.

On paper, the law in question requires paid circulators to register and provide and address where they can be subpoenaed.

A ballot measure being pushed by the National Credit Alliance would overturn virtually all laws that now limit annual interest charges to 36%

What’s crucial, though, is that judges are required to throw out all the signatures of any circulator who does not show up in court, regardless of whether there is other evidence showing that the signatures themselves are valid and were legally gathered.

In a 19-page ruling last year, Judge Susan Bolton acknowledged the 2014 statute could make it more difficult for those proposing their own laws and constitutional amendments to put their proposals before voters.

But Bolton said challengers did not present enough evidence – at least not yet – to show that allowing it to remain in effect presents irreparable harm, either to voters or those who hope to propose future ballot measures. So she agreed to allow the law and its hurdles to remain on the books pending a full trial, something that is unlikely to occur before the deadline for groups like McLeod’s to turn in their signatures.

“We don’t have the money as a campaign to not only gather the extra signatures due to the ones that are going to get thrown out on these legal technicalities but also to get people into court at the same time” to confirm the signatures they gathered. “That’s also costly.”

Current title loans can carry an annual percentage rate up to 204% a year

In fact, that could be the more costly part of it, given that anyone who wants to challenge the legitimacy of an initiative campaign need only file suit questioning the validity of the signatures and then issue subpoenas for all paid circulators.McLeod said someone might have gathered 1,000 signatures.

“But the person who witnessed your signature, the paid circulator, isn’t available on a particular Thursday next August to be in court in Phoenix because maybe they live in Sierra Vista,” he said. “So your signature gets thrown away, your voice gets silenced, because of a technicality having to do with the person who gathered the signature.”

McLeod pointed out that lawmakers, in enacting the requirement, did not extend it to petitions to nominate candidates, including themselves.Bolton, in her ruling, noted that distinction.

Attorneys for the state countered by citing the Voter Protection Act. That constitutional provision says once a measure is approved at the ballot box it cannot be repealed by the Legislature but instead must be taken back to voters.Bolton was skeptical.

“The ‘near permanency’ of an initiative once passed is more of a legal outcome than a compelling government interest in justifying (the state’s) chosen method of incentivizing subpoena compliance,” the judge wrote.

Still, none of that was enough for Bolton to grant a motion to bar the state from enforcing the law at the 2020 election.

Challengers have filed an appeal of her denial to enjoin the law. But that case won’t be heard until April.

Bolton isn’t the only judge who has refused to void the law. The Arizona Supreme Court reached a similar conclusion in 2018.

“The statute represents a reasonable means of fostering transparency, facilitating the judicial fact-finding process, including compliance with valid compulsory process, and mitigating the threat or fraud or other wrongdoing infecting the initiative process,” wrote Justice John Lopez for the court. “It furthers the constitutional purpose of the initiative online payday TN process by ensuring the integrity of signature gathering by reasonable means.”

As a constitutional amendment, it needs 356,467 valid signatures on petition by July 2 to qualify for the November ballot.