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No longer authorised. Arizona’s payday lending statute expired in 2010 — after voters refused to make it permanent — and these loans fell under the ordinary 36% cap.
Deferred presentment statute sunset 30 June 2010
Arizona authorised payday lending by statute for about ten years, with a built-in sunset. When that statute expired on 30 June 2010, payday loans lost their exemption and fell under Arizona’s ordinary 36% consumer interest rate cap.Arizona · Legal scholarshipArizona Law Review — when Arizona's deferred presentment statute sunset on June 30, 2010, payday loans lost their privileged status and fell under the purview of Arizona's 36% consumer interest rate cap
The industry saw it coming. In 2008 it put a measure to voters that would have made payday lending permanent. Voters rejected it, and the statute expired on schedule.
Ariz. Rev. Stat. § 6-632 · Deferred presentment statute expired 30 June 2010
A licensed lender may charge up to 36% on a consumer loan with original principal of $3,000 or less. Above $3,000, the structure steps down — 36% on the first $3,000 and a lower rate on the balance.
The practical effect is that the two-week, triple-digit product has no lawful home in Arizona.
Legal analysis of Arizona’s experience concluded that a rate cap alone is not sufficient — that the state also has to close the statutory routes by which lenders reach around it.Arizona · Legal scholarshipArizona Law Review — a state interest rate cap is not sufficient to protect Arizona consumers from the abuses of the payday loan industry; Arizona must first close the statutory loopholes that allow payday lenders to circumvent rate caps
That is the same conclusion Ohio reached the hard way, ten years apart, in two different states. See what happened in Ohio →
You can revoke authorisation and instruct your bank to stop the payment, whatever your agreement says.
What Regulation E says about automatic payments →
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A payday loan is a consumer debt. If it goes unpaid, two Arizona rules decide what a lender can do next: how long it has to sue you, and how much of your pay a court can order taken.
Being sued over an old payday loan? A collector can still file, but the time limit is a defence you can raise — and you cannot be jailed for the debt. What can and cannot happen if you don’t pay →