Arizona voters will vote in November on Proposition 209, the Predatory Debt Collection Protection Act, a measure that purports to tackle allegedly unfair debt collection practices but which opponents say will hinder Arizonans’ access to credit and will increase the cost of borrowing.
A “yes” vote on the proposal would lower the maximum annual interest rate on medical debt from 10% to 3%. It would also make homes, household goods, motor vehicles and bank accounts exempt from debt collection, while “reducing the amount of disposable income subject to garnishment to no more than ten percent”. Even then, a court order could still reduce the amount subject to garnishment “to five percent due to extreme economic hardship.”
In arguments against the proposal, members of the Arizona business community and proponents of a free market economy have expressed concern that the initiative would severely limit financing options for Arizona residents. Arizona.
In a statement from the Arizona Chamber of Commerce and Industry, CEO Danny Seiden argued that “when lenders cannot collect outstanding debts, they pass their losses on to their other customers, which means higher interest rates for Arizona residents”.
Seiden warns that “without the ability to collect on their loans, lenders will simply stop doing business with the hard-working Arizonans who need access to funds the most, leaving these potential customers unable to obtain credit for buy a car, rent an apartment or buy a house.”
The Arizona Bankers Association has emphasized the importance of stable credit systems, saying “access to credit fuels economic growth by enabling consumers and businesses to invest and spend beyond their cash reserves”.
Association CEO Paul Hickman argued that “by imposing a series of draconian requirements on Arizona financial services firms, Proposition 209 would significantly restrict the ability of Arizona consumers and businesses to access critical lines of credit.
Scot Mussi, president of the Arizona Free Enterprise Club, also raised economic concerns and questioned proponents of the proposal, saying the initiative was “funded almost entirely by California labor unions which, if passed, would make California our Arizona”.
The initiative is supported by Healthcare Rising Arizona and by Workers United, which is an affiliate of California-based Service Employees International Union.
Other supporters include the Arizona Public Health Association, the Arizona Education Association and the Arizona Democratic Party, whose arguments in favor of the proposal were released by the office of the secretary of state.
Other opponents of the initiative include the Goldwater Institute, the Tucson Metro Chamber and the Greater Phoenix Chamber.
Election day is November 8.