Payday Loan Reform

The merits of House Bill 2161, which seeks to reform the payday loan industry, are debated.

Transcript:

TED SIMONS: THE LAW THAT ALLOWS PAYDAY LENDERS TO OPERATE IN ARIZONA EXPIRES AT THE END OF JUNE. VOTERS REFUSED TO EXTEND THE LAW IN 2008, BUT NOW, ONE STATE LAWMAKER IS TRYING AGAIN. HE'S INTRODUCED A BILL TO REFORM THE INDUSTRY BUT CRITICS SAY IT DOESN'T DO ENOUGH TO PROTECT CONSUMERS FROM WHAT THEY CALL PREDATORY LENDING. WE'LL HEAR BOTH SIDES OF THE ISSUE IN A MOMENT BUT FIRST HERE IS A LOOK AT HOW THE PAYDAY LOAN INDUSTRY WORKS IN ARIZONA.

VOICE1: HOW I CAN HELP YOU TODAY?

VOICEOVER: THEY'RE ALMOST EVERYWHERE YOU TURN. PAYDAY LENDERS AND THEIR PROMISE OF CASH NOW.

GUY1: BASED YOUR NET INCOME, WE CAN LOAN YOU ANYWHERE FROM $50-$500.

VOICEOVER: PAYDAY LOANS ARE MEANT FOR A WORKING PEOPLE WAY STEADY SOURCE OF INCOME.

GUY1: I NEED TO VERIFY YOUR BANK ACCOUNT.

VOICEOVER: THE CUSTOMER WRITES A CHECK TO THE PAYDAY LENDER FOR THE AMOUNT OF THE LOAN PLUS FEES. THE COMPANY HOLDS ONTO THE CHECK UNTIL THE CUSTOMER'S PAYDAY.

TAMARA SISK: IT'S GREAT TO THINK I CAN RUN IN AND GET THAT AND JUST KIND OF TIED ME THROUGH UNTIL MY NEXT PAYCHECK.

VOICEOVER: TAMARA TOOK OUT HER FIRST PAYDAY LOAN IN 2004 WHEN HER HUSBAND WAS OUT OF WORK AND THEY WERE OUT OF MONEY.

TAMARA SISK: IT WAS 100 DOLLARS IF HE WAS MAYBE 15 DOLLARS ON IT. I WAS LIKE I CAN DO THIS, I PAID THAT OFF.

VOICEOVER: LIVING PAYCHECK TO PAYCHECK WITH CREDIT CARDS AT THEIR LIMIT, TAMARA TOOK OUT MORE PAYDAY LOANS.

TAMARA SISK: A YEAR OFF AND ON I WOULD PAY OFF AND THEN I WOULD COME BACK AND THEN THINGS STARTED GETTING TOUGHER. BILLS STARTED PILING UP.

VOICEOVER: PRETTY SOON ONE LOAN WASN'T ENOUGH.

ENRICO TORRES: WHENEVER A CONSUMER WALKS IN TO TAKE ON A LOAN, THEY'RE NOTIFIED THROUGH A WRITTEN AGREEMENT OR ORALLY THEY CANNOT HAVE MORE THAN ONE OUTSTANDING LOAN OUT WITH A PAYDAY LENDER.

VOICEOVER: IT'S AGAINST THE LAW. SO WHEN TAMARA TRIED FOR A SECOND LOAN, SHE WASN'T SURE WHAT WOULD HAPPEN.

TAMARA SISK: NOTHING HAPPENED. HERE'S YOUR MONEY. I WAS LIKE, OH! OK. SO THERE'S TWO LOANS I HAVE OUT NOW THAT WE'RE JUGGLING AND FEES AT DIFFERENT TIMES AND IT JUST SNOWBALLED.

VOICEOVER: BEFORE LONG, SHE HAD NINE LOANS TOTALING $3,000 WITH DIFFERENT PAYDAY LENDERS.

GUY1: WE LEND AT 17.5% WHICH IS BASICALLY $17.50 FOR EVERY 100 DOLLARS YOU BORROW.

VOICEOVER: EXPRESSED AS AN ANNUAL PERCENTAGE RATE THAT COMES OUT TO 455% ANNUAL PERCENTAGE RATE. FOR BANKS AND OTHER LENDERS, THE APR IS CAPPED AT 36%. ENRICO TORRES OF CHECKMATE SAYS IT'S UNFAIR TO ANNUALIZE WHAT AMOUNTS TO A ONE-TIME FEE.

ENRICO TORRES: THESE ARE SHORT-TERM LOANS MEANT TO ACHIEVE SHORT-TERM FINANCIAL OBLIGATIONS WHEN YOU LOOK AT RETURN CHECK FEES AND LATE FEES AND FEES TO EVEN TAKE OUT MONEY OUT OF AN ATM, THERE'S NOT AN ANNUAL PERCENTAGE RATE ON THAT.

TAMARA SISK: CHECK INTO CASH, 588.23, CHECKMATE, 575.

VOICEOVER: FOR TAMARA, PAYDAY LOANS HAVE ESSENTIALLY TURNED INTO REVOLVING CREDIT. BY PAYING ANOTHER FEE, SHE COULD EXTEND EACH LOAN A TOTAL OF THREE TIMES WHEN A LOAN IS DUE IN FULL, SHE'D PAY IT OFF IN CASH AND TAKE OUT A NEW LOAN TO COVER HER OTHER FEES.

TAMARA SISK: OTHER BILLS WEREN'T GETTING PAID BECAUSE ALL THE MONEY WAS GOING OUT TO PAY THESE FEELS.

VOICEOVER: TAMARA BLAMES HERSELF FOR THE FINANCIAL MESS SHE WAS IN BUT SHE SAYS THE PAYDAY LOAN COMPANIES MADE IT WAY TOO EASY.

TAMARA SISK: UNTIL MAY OF '05 WHEN I FILED BANKRUPTCY.

ENRICO TORRES: AT SOME POINT, PEOPLE HAVE TO TAKE FINANCIAL RESPONSIBILITY FOR THE DECISIONS THAT THEY MAKE.

VOICEOVER: USED PROPERLY, TORRES SAYS PAYDAY LOANS HELP PEOPLE OUT OF SHORT-TERM FINANCIAL EMERGENCIES.

ENRICO TORRES: AND PAYDAY LOANS ARE A CHEAPER ALTERNATIVE THAN PAYING RETURN CHECK FEES WITH BANKS AND OTHER FEES THAT BOTH CREDIT CARDS AND THE BANKS CHARGE SUCH AS LATE FEES, OVERDRAFT FEES, NEGATIVE BALANCE FEES.

VOICEOVER: THE STATE LAW THAT ALLOWS PAYDAY LENDERS TO OPERATE EXPIRES AT THE END OF JUNE AND PROP 200, AN INDUSTRY-LED EFFORT TO EXTEND THE LAW AND REFORM PAYDAY LOANS, WAS SOUNDLY DEFEATED BY VOTERS IN NOVEMBER OF 2008. BUT THE STORY DOESN'T END THERE. HOUSE BILL 2161 IS A NEW ATTEMPT TO KEEP THE PAYDAY INDUSTRY ALIVE IN ARIZONA. LIKE PROP 200, IT LIMITS FEES TO 15% OF THE PRINCIPLE AMOUNT BORROWED, PROHIBITS LOAN EXTENSIONS AND ROLLOVERS AND ALLOWS A CUSTOMER TO REQUEST A REPAYMENT PLAN ONCE A YEAR TO PAY OFF A LOAN AT NO ADDITIONAL CHARGE. NEW TO THE BILL ARE PROVISIONS GIVING BORROWERS TWO DAYS TO BACK OUT OF A LOAN AT NO COST. AND STARTING IN MAY OF 2011, REQUIRING LENDERS TO USE A COMMERCIALLY REASONABLE METHOD TO VERIFY BORROWERS DON'T HAVE OUTSTANDING PAYDAY LOANS IN EXCESS OF THE $500 LEGAL LIMIT.

CHUCK GRAY: WE'RE GOING TO TRY TO TURN THAT DOWN AND TELL THEM NO JUST LIKE WE DID AT THE BALLOT AND JUST LIKE WE DID AT THE LEGISLATURE IN THE LAST FEW YEARS.

VOICEOVER: THE BILL IS NOW FACING CRITICISM FROM A BIPARTISAN GROUP OF POLITICAL AND COMMUNITY LEADERS.

DANIEL PATTERSON: I WANT TO CALL ON REPRESENTATIVE ANDY TOBIN TO WITHDRAW HIS BILL, TO RECOGNIZE THAT HE'S MADE A MISTAKE. I WANT TO CALL ON SPEAKER OF THE HOUSE KIRK ADAMS NOT TO ASSIGN THIS BILL TO A COMMITTEE. I WOULD HOPE THAT THE SPEAKER, WHOM I HAVE A LOT OF RESPECT FOR, WILL RECOGNIZE THIS IS A BAD IDEA.

TED SIMONS: JOINING ME NOW TO TALK ABOUT PAYDAY LOANS ARE SENATOR DEBBIE MCCUNE DAVIS, A PHOENIX DEMOCRAT AND FORMER ATTORNEY GENERAL GRANT WOODS WHO IS ALSO CO-CHAIRING GOVERNOR BREWER'S ELECTION CAMPAIGN. THANK YOU, BOTH, FOR JOINING US TONIGHT ON "HORIZON." WHY IS THIS A BAD IDEA?

DEBBIE MCCUNE DAVIS: WELL, THIS ISSUE HAS BEEN FULLY DISCUSSED AND VETTED, BOTH AT THE LEGISLATURE AND IN THE PUBLIC. AND THE VOTERS HAVE ALREADY SPOKEN ON THE ISSUE. THEY HAVE SAID THAT THEY DON'T WANT PAYDAY LENDING IN THIS STATE. THE VOTE WAS VERY CLEAR. THE INDUSTRY SPENT $15 MILLION TRYING TO CONVINCE THE PUBLIC THAT THEY WERE AN ASSET TO THE COMMUNITY AND THE PUBLIC SAID NO AND THEY SAID NO BY 60%.

TED SIMONS: PUBLIC SAYS NO ONCE. WHY BRING IT UP AGAIN?

GRANT WOODS: WELL, THIS IS COMPLETELY DIFFERENT BILL AND, OF COURSE, TIMES HAVE CHANGED. I DON'T KNOW IF MAYBE DEBBIE MISSED IT BUT IN THE LAST YEAR IN A HALF, ARIZONA'S ECONOMY HAS GONE DOWN THE TUBES. WE HAVE A LOT OF THINGS WE LOOKING AT THAT WE NEVER THOUGHT WE'D LOOK AT AGAIN AND WE'VE GOT A BRAND-NEW BILL HERE WITH THE REFORMS THAT FRANKLY WEREN'T IN THE PROPOSITION. I VOTED NO ON THE PROPOSITION. I WAS OPPOSED TO THE PAYDAY INDUSTRY AND THE WAY THEY'VE OPERATED AND FRANKLY THE WAY THEY OPERATE TODAY. THAT'S WHY THEY NEED TO BE REFORMED. WHAT THEY TRIED TO DO BEFORE IS KIND OF SLIP THROUGH WITHOUT THE KEY ELEMENTS THAT YOU NEED, I THINK, TO PROPERLY REGULATE PAYDAY LOANS AND ALLOW THEM TO EXIST OUT HERE IN ARIZONA FOR THE HUNDREDS OF THOUSANDS OF ARIZONIANS WHO NEED THIS SORT OF SHORT-TERM CREDIT. IN THE LAST YEAR AND A HALF, SHORT-TERM CREDIT HAS GOTTEN HARDER TO GET, NOT EASIER. DEBBIE SAYS -- I READ HER IN THE PAPER -- THAT THESE PEOPLE THAT NEED $300 OR $400 PAY THE DOCTOR BILL OR CAR BILL, THEY OUGHT TO ASK FAMILY AND FRIENDS. THAT'S THE ANSWER. THEY HAVE ASKED THEIR FAMILY AND FRIENDS. IT'S KIND OF AN ELITIST VIEW TO SAY THAT. I THINK THE THING TO DO INSTEAD OF KICK PEOPLE OUT OF THE STATE IS LOSE 5,000 JOBS, LOSE $80,000 IN TAX REVENUE IS INFORM THEM PROPERLY AND THAT'S WHAT THIS BILL DOES.

TED SIMONS: IS THIS SIGNIFICANTLY DIFFERENT FROM WHAT THE VOTERS TURNED DOWN IN 2008?

DEBBIE MCCUNE DAVIS: NO, IT ISN'T. AND THE VOTERS IN ALL BUT ONE LEGISLATIVE DISTRICT IN EVERY COUNTY IN THE STATE SAID NO. IT'S NOT DIFFERENT NOW. THE VOTERS CLEARLY UNDERSTOOD THESE ARE PREDATORY TRANSACTIONS THAT PUT PEOPLE IN WORSE SHAPE. WE HEAR FROM THE CHARITIES ALL THE TIME THAT IF PEOPLE WOULD COME TO THEM BEFORE THEY WENT TO PREDATORY LENDERS, THEY'D BE ABLE TO HELP THEM. NOW, THEY HAVE TO HELP THEM DIG EVEN DEEPER OUT OF THE DEBT TRAP THAT'S SET BY THIS INDUSTRY. THE THINGS THAT GRANT IS TALKING ABOUT IS PURE INDUSTRY RHETORIC. THIS IS THE STUFF, UM, THAT THEY TALK ABOUT ALL ACROSS THE COUNTRY WHEN THEY WANT TO CONTINUE TO JUSTIFY THEIR EXISTENCE. THIS IS ALL ABOUT EXTENDING THE DATE, THE SUNSET DATE AND ALL ABOUT KEEPING 400% INTEREST. THOSE ARE THE SIGNIFICANT FEATURES.

TED SIMONS: WHY NOT WORK WITH BANKS AND OTHER LENDERS IN TERMS OF SHORT-TERM HIGH-RISK LOANS? IS THERE NOT -- IS THERE -- IF PAYDAY LOANS ARE HERE AND THE INABILITY THROUGH BANKS IS HERE, ISN'T THERE SOMETHING IN THE MIDDLE THAT EXISTING INSTITUTIONS COULD WORK THAT DON'T HAVE THE HIGH INTEREST RATES?

GRANT WOODS: THE ANSWER IS NO THE MARKETPLACE DECIDES THAT. BANKS AND CREDIT UNIONS AREN'T IN THE BUSINESS. THEY KEEP TALKING ABOUT, WELL, WE HOPE WE CAN GET THEM IN THE BUSINESS. DEBBIE AND HER CROWD WANT TO SAY, YOU KNOW, GO LOAN SOMEONE $200 FOR TWO WEEKS, UNCOLLATERALIZED, ALL YOU KNOW ABOUT THEM IS THEY HAVE A JOB AND IT'S THE PERSON THEY SAY IT IS AND THEY HAVE A BANKING ACCOUNT. YOU LOAN THEM $200 AND CHARGE 36% INTEREST. FOR THAT, TED, YOU'D GET $3. DO YOU THINK THE BANKS WOULD GET INVOLVED SO THEY CAN MAKE $3? LET'S TALK ABOUT THE FACTS HERE. DEBBIE TALKS ABOUT RHETORIC. YOU GOT TO GET OVER THE RHETORIC AND START SOLVING PROBLEMS. AS I TOLD YOU, I WAS OPPOSED THAT THE PROPOSITION. I VOTED NO ON IT. I'M FOR THE BILL. WHY? THE CYCLE OF DEBT -- YOU HAVE THIS TAMARA WOMAN IN YOUR PIECE THERE. FIRST REMEMBER 94% OF THE PEOPLE WHO USE THESE SORT OF LOANS AREN'T TAMARA THEY PAY THEIR BILLS ON TIME. BUT FOR THE TAMARAS OF THE WORLD WE'RE GOING TO TRY TO PROTECT, WHAT THIS BILL DOES IS IT PROHIBITS ANY LOANS MORE THAN $500, PERIOD. THAT -- AND THE WAY YOU DO IT IS IT ESTABLISHES A COMPREHENSIVE DATABASE WHICH WE DON'T HAVE TODAY WHEN SHE GOES DOWN THE STREETS AND GET ANOTHER $500 LOAN AND THE NEXT WEEK AND GETS ANOTHER $500 LOAN AND THEN GETS ANOTHER ONE AND PILES UP ALL OF THESE FEES, UNDER THIS BILL, THAT CANNOT HAPPEN IN FEW STATES THAT HAVE THIS COMPREHENSIVE DATABASE, IT'S ENDED THE CYCLE OF DEBT. WHAT I WILL TELL YOU AS A FORMER ATTORNEY GENERAL AND A CONSUMER ADVOCATE MY ENTIRE LIFE IS I BELIEVE THIS WILL END THE CYCLE OF DEBT. THOSE CHARITIES WILL NOT BE SEEING PEOPLE LIKE TAMARA BECAUSE IT'LL BE PROHIBITED AT THE POINT OF TRANSACTION.

TED SIMONS: IF THE ROLLOVERS AREN'T THERE, IF THE ROLLOVERS AREN'T ALLOWED TO HAPPEN BY WAY OF A DATABASE, WHAT'S WRONG WITH THIS WAY OF LENDING?

DEBBIE MCCUNE DAVIS: FIRST OF ALL, UM, FORMER ATTORNEY GENERAL WOODS IS BEING PAID BY THE INDUSTRY AND I THINK THAT'S AN IMPORTANT ISSUE TO PUT ON THE TABLE BECAUSE WHAT HE'S SAYING IS WHAT THE INDUSTRY ARGUES WHEN THEY TRY TO PROTECT THEIR INTERESTS. THAT'S VERY IMPORTANT. THERE ARE STATES WITH DATABASES AND THE DEATH TRAP EXISTS. IT EXISTS THERE. IT'S DOCUMENTED. ARIZONA'S LAW WHEN ORIGINALLY WRITTEN IN 2000, THE YEAR THAT THE ATTORNEY GENERAL WENT OUT OF OFFICE, HE'S NEVER DEALT WITH THEM IN ANY KIND OF A REGULATORY POSITION. THAT LAW HAS NO TEETH IN IT. AND THE REGULATORY SCHEMES THAT ARE BEING SUGGESTED IN HOUSE BILL 2161 ARE AS WEAK IN THEIR REGULATORY MODE AS THE BILLS THAT ARE ON THE -- THE LAWS THAT ARE ON THE BOOKS TODAY.

GRANT WOODS: THEY'RE NOT WEAK!

DEBBIE MCCUNE DAVIS: THEY DON'T PROTECT ANYONE.

GRANT WOODS: THEY'RE NOT WEAK! THAT'S FLAT-OUT WRONG. AND YOU -- AND I THINK -- A LOT OF PEOPLE TALK ABOUT THE RHETORIC ON THIS AND THEY DON'T UNDERSTAND IT BUT DEBBIE, I HAVE TO THINK AFTER YOU'VE SPENT A CAREER ON THIS ISSUE THAT YOU HAVE TO UNDERSTAND IT. LOOK, I DIDN'T KNOW THIS INDUSTRY FROM ANYBODY UNTIL I GOT INVOLVED IN THIS OVER THE SUMMER. I WAS, AS I TOLD YOU, I WAS REALLY AGAINST THEM. BUT AS I'VE LOOKED INTO IT I TALKED TO VARITEK, FOR EXAMPLE. VARITEK IS THE AGENCY THAT ESTABLISHES THESE DATABASES AROUND THE COUNTRY. THEY DO IT FOR BANKS. THEY DO IT FOR CREDIT UNIONS. I SAW THEIR PRESENTATION. THEY SAY FLAT OUT YOU WILL NOT BE ABLE TO PILE UP ANY OF THESE LOANS IN ANY OF THESE FEES AND ANY OF THESE DEBTS. THAT MEANS THAT THE MOST YOU -- TED, THE MOST YOU CAN HAVE OUT THERE AT ANY ONE TIME WILL BE $500 PLUS $15 PER 100 WHICH WILL BE $75. $575 IS THE MOST YOU'LL HAVE OUT THERE. THAT'S NOT A CYCLE OF DEBT.

DEBBIE MCCUNE DAVIS: WELL, THE VERY, UM, COMPANY THAT IS BEING CITED HERE IS WHERE OTHER STATES DOCUMENT THE FACT THAT THESE ARE REPEAT CUSTOMERS. THE 94% NUMBER THAT YOU USE ABOUT PAYOFFS? THOSE ARE LOANS THAT ARE SATISFIED WITH NEW LOANS BEING WRITTEN WITHIN 48 HOURS OF THE LOAN BEING PAID OFF.

GRANT WOODS: SOME ARE.

DEBBIE MCCUNE DAVIS:: UNLESS YOU UNDERSTAND HOW WORKING FAMILIES MANAGE THEIR FINANCES, IT'S HARD TO -- IT'S EASY TO BUY INTO THE INDUSTRY RHETORIC.

GRANT WOODS: WHY DO YOU CARE? WHY IS IT THE GOVERNMENT'S ROLE THAT WHEN PEOPLE -- THEY TAKE A SHORT-TERM LOAN BECAUSE THEY NEED $400, WHY DO YOU NEED TO STICK THE GOVERNMENT'S NOSE INTO THIS AND SAY, YOU KNOW, I'M DEBBIE MCCUNE DAVIS. I'VE BEEN IN THE STATE SENATE FOR MOST OF MY CAREER AND I DON'T LIKE FOR TO YOU TAKE OUT THESE LOANS. I THINK YOU OUGHT TO MANAGE YOUR MONEY BETTER. I THINK YOU OUGHT TO --

DEBBIE MCCUNE DAVIS: I THINK THAT'S A GREAT QUESTION AND I'M MORE THAN HAPPY TO ANSWER IT.

GRANT WOODS: IT'S NONE OF YOUR BUSINESS. WHY ANSWER IT?

DEBBIE MCCUNE DAVIS:: IN ARIZONA WHEN YOU'RE AN ATTORNEY GENERAL, THE ARIZONA CONSUMER LOAN ACT IS HOW WE MANAGED CONSUMER LENDING. THERE'S A 36% INTEREST RATE CAP ON THAT LOAN.

GRANT WOODS: WHICH WOULD END THESE LOANS.

DEBBIE MCCUNE DAVIS:: THIS INDUSTRY -- NO. THAT'S NOT TRUE.

GRANT WOODS: WHO IS GOING TO LOAN $200 FOR $3, DEBBIE? NOBODY.

DEBBIE MCCUNE DAVIS:: ASK FOR A SPECIAL LAW THAT ALLOWS THEM TO OPERATE OUTSIDE OF THOSE CONSUMER PROTECTIONS AND OUTSIDE OF THE 36% LAW CAP. NO ONE IS TELLING THIS INDUSTRY THAT THEY HAVE TO LEAVE THE STATE THIS INDUSTRY CAN DO BUSINESS ON A LEVEL PLAYING FIELD WITH THE OTHER 100 CONSUMER LENDERS THAT CURRENTLY ARE LICENSED IN THIS --

GRANT WOODS: MAYBE YOU DIDN'T TAKE ECON 101 BUT THE LOWER THE LOAN, THE MORE THE FEE IS GOING TO HAVE TO BE. IF YOU'RE GOING TO TELL THIS INDUSTRY OR THE BANKS OR THE CREDIT UNIONS, IF YOU'RE GOING TO LOAN THAT GUY $200 IN TWO WEEKS YOU'LL GET A FEE OF $3 WHICH IS WHAT YOU'RE SAYING, GUESS WHAT? THEY WILL NOT DO IT? THERE'S AN IDEA -- UNCOLLATERALIZED LOAN.

DEBBIE MCCUNE DAVIS: YOU'RE TRANSPARENT. YOU'RE HERE TO PROTECT THE PROFITS OF THE PAYDAY LOAN INDUSTRY. THAT'S CLEAR IN EVERYTHING THAT YOU SAID TONIGHT.

TED SIMONS: OK, WE HAVE TWO MINUTES LEFT. I WANT TO GET AT LEAST ONE MORE QUESTION IN HERE.

GRANT WOODS: SURE.

TED SIMONS: HOW DID WE SURVIVE WITHOUT PAYDAY LOANS UP UNTIL, WHAT? THE YEAR 2000?

GRANT WOODS: WELL, I THINK THAT IS ONE WAY TO LOOK AT IT BUT LET'S LOOK AT WHAT HAS HAPPENED IN THE FEW STATES THAT HAVE FOLLOWED DEBBIE'S LEAD HERE AND KNOCKED THEM OUT. WHAT'S HAPPENED IS WE KNOW VERY CLEARLY WHAT HAPPENED. THE NEED IS THERE. IF YOU THINK THE NEED IS GOING TO GO AWAY -- YOU SEE PAYDAY LOAN PLACES EVERYWHERE AND THE HUNDREDS OF THOUSANDS OF ARIZONIANS THAT USE THEM, THEY'LL NEED THEM JULY 2 JUST LIKE THEY NEED THEM TODAY. WHAT THEY DO IS THEY DON'T PAY THEIR BILLS THEY PAY THEM LATE. THEY BOUNCE CHECKS. THESE PEOPLE ARE SO WORRIED ABOUT MANAGING EVERYONE ELSE'S FINANCES OUGHT TO BE WORRIED ABOUT THAT. THEY GO TO PAWN SHOPS AND AUTO LOANS AND LOAN SHARKS. THAT'S WHY PEOPLE LIKE THE HIGHWAY PATROL ASSOCIATION, THE BLACK CHAMBER OF COMMERCE, PEOPLE LIKE MYSELF WHO OPPOSED THIS PROPOSITION ARE NOW IN FAVOR OF IT BECAUSE THE ALTERNATIVE IS NOT THIS LA LA LAND YOU LIVE IN, THE ALTERNATIVE IS SOME VERY NEGATIVE --

TED SIMONS: LAST QUESTION ON YOUR END. ARE YOU JUST SIMPLY AGAINST PAYDAY LOANS, PERIOD? CAN ANY REFORM SATISFY YOU?

DEBBIE MCCUNE DAVIS: THE REAL REFORMS COME WITH THE SUNSET, WITH THE RETURN TO A LEVEL PLAYING FIELD FOR LENDERS, THE 36% INTEREST RATE CAP IS MANAGEABLE. THERE ARE 100 CONSUMER LENDERS IN THIS STATE THAT WILL CONTINUE TO DO BUSINESS. IN FACT, WE LOOK AT NORTH CAROLINA AND WITHIN THE FOUR YEARS AFTER SUNSET -- OR AFTER PAYDAY WENT AWAY, THEIR BUSINESS INCREASED BY 37%.

GRANT WOODS: THEY HAD $36 MILLION --

TED SIMONS: WE HAVE TO STOP IT RIGHT THERE. WE HAVE TO STOP IT RIGHT THERE. GOOD DISCUSSION. THANK YOU, BOTH, FOR JOINING US. WE APPRECIATE IT.

GRANT WOODS: THANK YOU FOR HAVING US ON, TED.