A bill sponsored by Arizona state Sen. John Kavanagh (R-District 23) to aid Arizonans who need emergency financial assistance recently was approved by the Arizona House of representatives.
Under the measure, SB 1316, residents who are struggling financially will be given a new lending option which will cap loans at $2,500, only honor the loan for 24 months, require compliance with the Truth in Lending Act and will deliver disclosures in Spanish when necessary. Amendments made to the bill are the addition of a 45-day minimum term length, restriction of secondary loan titles and the addition of a 20 year sunset, as well as a required review after a decade.
Due to underbanking, which applies to almost 20 percent of Arizonans, individuals and families are prevented from using some banking services and left with limited options for loans. The bill was introduced in the hopes of minimizing the tendency of individuals to sign online or unprotected loans, auto title loans or turn to pawn shops.
Kavanagh said Arizonans should have the options to make decisions for their finances, stating that 35 states offer their citizens more options than Arizona does, and that with the new bill, improvement is a possibility.
"Arizonans should be allowed to make their own financial decisions - and the government should keep its hands out of their private lives and decisions," Kavanagh said.
The bill now moves to the Senate.
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