Subject for use on Email to be forwarded: S.B. 1316 S/E: ‘consumer lending; regulation, licensure’
SB 1316 is being heard in the House Council of the Whole (COW) today at 1315 Today
Please consider sending the message at the end of this Email to all House Members ASAP
Email addresses with Semi-colons for all members of the Arizona House of Representatives:
[email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected];[email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected];
House Addresses With Commas:
[email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected],, [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected],
You might want to print this Email now to have the instructions below available to facilitate using this process.
Guidance for processing and sending your Email.
When you are ready to forward the Message at the end of this text to all members of the House of Representatives:
1. Click on “Forward” from this message so that the attachment will be included with the message that will then be ready for final processing for sending. (Note: Clicking on “Forward” doesn’t send the message. It only sets it up to complete the processes below before hitting “Send”).
2. Then delete the Subject line of the new message, and copy: S.B. 1316: S/E: ‘consumer lending; regulation, licensure’ here or at the beginning of the text of this Email and paste it on the Subject line.
3. Edit the message that appears below the blue line below if desired, and enter your name (and retired Rank if you are a Military Retiree) after the word ‘Respectfully’ at the end of the message. Enter your address if desired, but that might tend to make the Representatives or their staff to delete your message if you are not a constituent before they read at least the first sentence in the message. Consider just adding something like ”Concered Veteran and Citizen” after your name and rank. If you are a constituent of one of the Representatives, in addition to sending this Email to all of Committee Members, please consider calling your Representative’s office with your concerns Go to or click on www.azleg.gov here. At that site, click on House and then on Members on the drop down menu) to find their phone numbers.
4. Copy Email addresses with Semi-colons for all members of the Arizona House of Representatives: above (high light the addresses of all 60 members and then hit ‘Ctrl’ and ‘C’ simultaneously), and paste it on the Bcc: line (put your cursor on the Bcc: line above and then hit ‘Ctrl’ and ‘V’ simultaneously.
NOTE:
If you have problems with your system not allowing so many address at one time, break the group down into two or more groups for use in sending the message to those two or more groups.
And if your system rejects the use of Semi-colons separating the addresses, follow the above process with the group of addresses separated by Commas.
5. Now High Light the blue line shown below (place your curser just below the blue line) and sweep upward across everything above it.
6. Then hit “Delete” on your keyboard . That will leave just the Draft Message that now appears below the blue line as the text of your new Email.
7. Then when you feel comfortable that you have completed all the steps correctly, you can hit “Send” to send your Email.
Draft Message
Honorable State Representative
I wonder how many are aware of the whole story on the lending industry business model that is hidden in SB 1316, beyond the exorbitant 180% to 204% annual percentage rates (APR) that has been discussed extensively but is not directly mentioned in the Bill? There’s at least one other issue.
That issue is the nature of the minimal initial principle payment on the loan and the impact it has on the resulting interest accumulation over the 24 monthly payments allowed by the legislation.
For example, on an unsecured $2500 loan, at 17% per month interest (204% APR) as allowed by SB1316, the first monthly interest payment will be $425 and the first monthly principle payment will be $10.05. That $10.05 initial principle payment, when added to the first month’s interest payment ($425) becomes the total monthly loan payment ($435.05) that remains constant over the term of the loan.
That minimal initial principle payment ($10.05) is automatically determined in the loan amortization process such that increasing it incrementally each month by the amount that the interest payment decreases (to keep the loan payments constant) cumulatively adds up to the amount of the original loan ($2500 in this case) with the last loan payment.
But due to the predatory nature of this business model where monthly payments remain at $435.05 through all 24 payments, even with the monthly interest payments decreasing each month (because of the monthly principle payments), the interest on the loan will accumulate to $7,941.15 over the 24 month term of the loan. That’s over three times the amount of the $2500 loan. See Page 2 of the attached.
While the small initial monthly principle payment beginning at $10.05 benefits the borrower by keeping the monthly payments to a minimum, it’s that huge cumulative $7941.15 interest payment that is the insidious nature of the predatory lending industry business model.
And it’s a similar situation with a $500 unsecured loan over 24 months. The initial monthly principle payment would only be $2.01 (one fifth of what is required on a $2500 loan). But that results in about $1,600 in interest payments over the 24 month term of the $500 loan. That, like on a $2500 loan, is over 3 times the amount of the loan.
And here is why the lenders business model would not encourage starting off with a higher principle payment. For example, if the initial principle payment were increased to $20.05 on a $2500 loan, instead of $10.05, the total interest over 24 months would decrease by about $1600. And on a $500 loan if the initial principle payment were to be $10.01,instead of the normal $2.01, the loan would be paid off in 15 months. And the total interest payment over that time period would only be about $860. That’s only about one half of what it would be if the loan started with a $2.01 initial principle payment and was paid off over 24 months. Similar scenarios result for any loan amount when the initially required monthly principle payments are increased.
So with that lending industry business model we won’t see them encouraging beginning with a higher initial principle payment or early payoff of the loan balance. That’s because it would reduce the total amount of interest to be paid over the 24 month or shorter period of the loan. So it is definitely in the interest of the lender to have the payments extended over 24 months as allowed by the Bill, starting off with the resulting relatively small monthly principle payments that, of course, is intended to appear to be in the interest of the borrower. But it is primarily to the benefit of the lender, as part of their business model, to see the minimal initial principle payment and the payback extended over 24 months as allowed by the Bill. So I believe, with this business model, you can be assured that the lender will not be encouraging a larger initial principle payment or early pay off of the loan or offering lower percent per month interest rates. And while it would be nice to bring new industry to Arizona, as some of your leadership are advocating as a major reason to support SB 1316, we don’t need this kind of predatory lending business in Arizona.
Please join me and other concerned Arizona citizens and probably most of your constituents in opposing SB1316.
Respectfully