law authorizing payday loans is scheduled to “sunset”

Arizona’s law authorizing payday loans is scheduled to “sunset,” or automatically end, on June 30, 2010. In anticipation of this long awaited date, I am pleased to announce the formation of “Operation Sunset”, an enforcement initiative of the Attorney General’s Office designed to aggressively pursue payday lenders who attempt to evade the ban on payday loans.

In 2008, Arizona voters made it clear that they opposed the continuation of the payday loan industry when they overwhelmingly defeated Proposition 200, which would have allowed payday lenders to operate in the state permanently. Despite this defeat at the polls, the payday loan industry continued to pursue a repeal of the sunset provision in the payday lending law and lobbied for legislation that would have provided the industry essentially the same benefits as Proposition 200. As Attorney General, I strongly opposed this legislation, arguing that it would overturn the will of the voters and perpetuate a debt trap for thousands of Arizona citizens. Fortunately, the Legislature refused to extend the sunset period.

As the chief legal officer of this state, I am committed to ensuring the enforcement of our laws and the protection of Arizona consumers. To that end, I have formed an Operation Sunset Enforcement Team that will be dedicated to implementing the will of the voters and preventing the issuance of payday loans after June 30, 2010. The Operation Sunset Enforcement Team, which is comprised of attorneys, investigators, and paralegals, will respond to consumer complaints, perform undercover operations, shut down operations that attempt to offer payday loans after the sunset and, where appropriate, bring claims for injunctive relief and civil penalties against those who violate the law.

For this unit to be effective, however, we need your help. If you witness or become aware of a lender issuing payday loans after the June 30, 2010, sunset date, I encourage you to call our payday lending hotline at 866.879.5219 or email us at operationsunset@azag.gov. Together, we can work to ensure the end of predatory payday lenders in Arizona!

Terry Goddard
Attorney General