Right now the legislature is debating Senate Bill 1316, which would allow "Flexible Credit Loans" that could charge more than 200 percent APR.
Sen. John Kavanagh, a Republican from Fountain Hills, argues that the working poor need the loans in case of emergency.
"You know you only do this when you’re desperate and you have no other choice," Kavanagh said.
Rep. Debbie McCune Davis, a Democrat from Phoenix, is fighting against them.
"They want you to believe that there is nowhere else for these people to go," Davis said.
She said that if working families find themselves with a short-term need, a credit union is a more affordable and better alternative for those with less-than-good credit. By law, these loans cannot go above 18 percent APR.
We found several credit unions throughout the state that offer short-term loans to its members. Most require proof of employment. Some require credit checks and borrowers may need references for others. Loan amounts and repayment terms vary.
| Banner Federal Credit Union | First American Credit Union | Landings Credit Union | MariSol Federal Credit Union | Pinal County Federal Credit Union | |
|---|---|---|---|---|---|
| Loan Name: | Pay Day Stretcher Loan | EZ Loan | Micro Loan | Quick Loan | Funds 4 Less |
| Min. Loan: | $200 | $500 | $500 | $500 | $300 |
| Max. Loan: | $500 | $500 | $2,000 | $500 | $700 |
| APR: | Up to 18% | 18%, 4-month repayment | 15%, 6-24-month repayment | 18% | 18%, 2-6-month repayment |
| Credit Check: | No | No | Better than 580 | No | No |
| Fee: | $35 Application Fee | $50 Application Fee | $35 Application Fee | $50 Application Fee | $50 Application Fee |
| Proof of Job: | Yes | 6 Months | Yes | 6 Months | Yes, plus 2 References |
| Membership: | Yes | Yes, with direct deposit, checking | Yes, with checking | Yes, with direct deposit | Yes, with direct deposit, checking |
Most credit unions serve a particular population. For example, Landings Credit Union, based in Tempe, serves those who are related to and attending any school in the state. Spokesperson Adrianne Rexious says 99 percent of their members repay the loan in full.
"You don't have to take advantage of somebody just to ensure that they repay their loan," Rexious said. "If you make a loan for a reasonable amount, for reasonable terms, you're going to get repayment."
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