I feel I have a personal stake in the payday loan or cash advance industry in Arizona as I live in a historic district where these stores seem to be popping up at the rate of a few a month.

Let me give you some background. I purchased a residence in central Phoenix in 2002. At the time (as everyone is now aware) housing prices were increasing steadily and what had been a questionable neighborhood ten years prior was now gentrifying. And when I say gentrifying I’m not talking about an increase in housing prices, which many analysts may over-consider when speaking of the quality of a neighborhood. I’m talking about the disappearance of graffiti, increasingly number of homeowners sinking money into the exterior of their houses and yards, and a growing local business community.

Soon though, not because of the national or local economy was worsening, payday loan stores started to go up on the corners. Not within my neighborhood, but busy intersections surrounding my neighborhood. And because Phoenix is such a city of small pockets, I began to feel that people coming to my house for the first time would get a bad first impression because you cannot turn onto a street to access my neighborhood without driving by a payday loan store. From any direction.

The Payday Loan Reform Act, formally referred to as Arizona Proposition 200 was a piece of legislation that appeared on November, 2008 ballots in Arizona.

The legislation was a follow-up to the Stop Payday Loans initiative. The Arizona Stop Payday Loan Reform act was sponsored by groups wanting to kill the industry entirely (except for online payday loan sites) in Arizona. Proposition 200 was soon drafted by payday lender supporters in order to promote reform in the payday loan industry and silence critics seeking for an outright ban on the practice.

The Proposition 200 would do several things. It’s primary goal would be to extend the state’s licensing program that allows payday lenders licenses. This program is set to terminate on July 1, 2010. It would also limit the number of loans an individual can take out as well as the frequency with which a borrower could receive payday loans. It would also limit fees associated with payday loans.

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