Members of Arizona’s House Ways and Means Committee last night passed legislation that offers more financial options in the marketplace. The bill, SB 1316, is sponsored by Sen. John Kavanagh (District 23) to give consumers more access to credit through legal and regulated loans.
“Well-meaning Arizonans deserve to have a safe, legal and compassionate financial option when emergencies occur,” Sen. Kavanagh said. “The progress made today means Arizonans with little or no credit will be able to handle emergencies, like broken air conditioners or healthcare costs, without pawning off their belongings or signing up for an unregulated loan in this state.”
The FDIC’s 2013 National Survey of Unbanked and Underbanked Households reported that between 10-14 percent of Arizonans are unbanked and 17-19 percent are “underbanked.” Currently, their only existing legal lending options are auto title loans or pawnshops – which are of no use if one does not own a vehicle (or have equity in it), or have anything of value to pawn – or certain unregulated online lenders, which often are offshore and anonymous, and leave consumers with no protections or recourse. Flex loans, as proposed in SB 1316, would fill a need to financially help those without access to traditional banking.
“The reality is that there is an overlooked population of Arizonans who cannot access traditional banking for a variety of reasons,” said David Schwarz, president of the Arizona Financial Choice Association. “Sen. Kavanagh has shown great leadership in stewarding this bill through the legislature, and we’re grateful to him for his support.”
Details of SB1316: