In 2000, lawmakers created an exception for payday loans up to $ 500 for two-week periods.

Lobbyists have argued that this meets a need. For those who could not repay loans immediately and had to renew, effective annual interest rates could exceed 400%.

But this law was a 10-year experiment.

And when lawmakers hesitated to renew the special law, the industry took their case directly to voters, spending more than $ 17 million on the effort, only to lose. This forced payday lenders to close their doors.

Title loans, however, are a separate category, relying on vehicle owners pledging their interest in their vehicles as collateral. Both consumer groups said interest rates can go up to 204% depending on the size of the loans, which have no limits.

McCune Davis said it was no longer acceptable. She said there was no reason to charge more than 36% interest.

Scott Allen, president of the Arizona Title Loan Association, said it didn’t matter – if the state wanted to take a stand that some residents didn’t deserve credit.

Allen, who also operates 25 Cash Time securities lending outlets in Arizona, said those with good enough credit scores can borrow from banks or even against their credit cards. But he said it’s not an option for those with little or no credit.