Recent legislation changes in Arizona changed the maximum interest rate that can be charged to 36%. Payday lenders feel they can’t do business charging 36% so they are closing up and leaving the state in droves.
Advance America Cash Advance Centers has announced it will close all 47 of its Arizona locations along with 75 in other states.
Attorney General Terry Goddard issued the following statement:
Attorney General Terry Goddard today responded to a press announcement by Advance America, the leading payday loan company in the state, that it will be closing its Arizona operations, saying that the departure “shows the repeal law is working.”
Goddard emphasized, however, that businesses that offer legitimate loans on commercially reasonable terms are welcome in Arizona and should be encouraged. “I hope that entrepreneurs and employees of the payday loan businesses will now set their sights on lawful loan products and business practices,” Goddard said.
“But Advance America made millions in Arizona off of a business model that preyed on vulnerable borrowers and charged them unconscionable interest rates and fees,” Goddard continued. “They could have amended their business practices like other companies and charged lawful rates, but they chose to fold their tent here. That’s just what Arizona voters hoped would happen when they rejected this industry at the polls.”
Before the payday loan statute expired, Goddard announced the formation of “Operation Sunset” to aggressively pursue payday lenders who attempt to skirt the ban on payday loans. As part of that initiative, Goddard sent Arizona payday loan companies, including Advance America, a letter in June informing them that he intends to enforce the ban and prosecute any attempts to evade the law.
“My message to the loan industry is clear,” Goddard summarized. “If you offer consumer loans on fair and commercially reasonable terms, Arizona is wide open for your business. But if you break our laws against charging consumers exorbitant interest and unfair fees, you are not welcome here.”
Check ‘n Go, another payday lender, said they would close 34 locations in Arizona also. – Source