Senator Chuck Gray
“[Payday loan] facilities are not something that government should condone… I don’t think they’ve brought anything to society that is of any worth, so I’m hoping they will pack up and leave the state. Either that or live with 36 percent interest.”
State Senator Chuck Gray of Mesa, Arizona, would like payday lenders to leave his state and introduced a bill that would limit payday loan interest rates to 36% APR…
Senator Gray believes payday loan companies are no better than loan sharks who prey on the poor:
“They’re the segment of society that can least afford these exorbitant interest rates as high as 500 to a 1,000 percent interest if you figure in all the fees they charge.”
Senator Gray also said:
“It’s basically check-kiting.”
Note: This is incorrect. Check kiting is a form of bank fraud in which nonsufficient funds (NSF) checks are deposited between two or more banks, resulting in artificially inflated balances that permit the checks to be honored rather than returned unpaid. Check kiting takes advantage of “float time” - the delay created by the collection of funds between banks. It is illegal in the United States and has nothing to do with payday lending.
Arizona State Senator Chuck Gray is Chairman of the Judiciary Committee.
Sources:
Gray: Payday Loan Stores Should ‘Pack Up and Leave’ (The Arizona Republic)
Senator Proposes Crackdown on Payday Loan Stores by Doug Ramsey (KTAR)
State Senator Chuck Gray Website
Many payday lenders including Dennis Brassford and Darrell Wells say that a rate cap of 36% APR is a prohibition of the payday loan business.
Note: While visiting Senator Gray’s website, I found the following statement:
Government has a way of being burdensome and oppressive to business by regulating and taxing it to the point that being in business is many times no longer profitable. This must stop.
Senator Gray’s bill, if passed, would do exactly that - regulate payday lending to the point that it would no longer be profitable to issue short-term loans in Arizona.
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