Two of the state’s leading business groups have announced their opposition to an initiative that would decimate Arizonans’ ability to secure credit and financing.
Both the Arizona Chamber of Commerce & Industry and the Greater Phoenix Chamber said they are opposing what proponents have dubbed the “Predatory Debt Collection Protection Act.”
The Predatory Debt Collection Protection Act is being touted by proponents to help Arizonans in medical debt from unfair collection practices, protect additional assets from being sold to pay obligated medical bills, and lower interest rates.
Proponents claim the initiative aims to exclusively protect consumers from unfair medical debt practices, but many believe the convoluted language will have major implications for all types of debt financing.
The initiative is backed by the California-based labor union SEIU-United Healthcare Workers West and is supported by the Arizona Democratic Party and labor unions UNITE HERE Local 11, the Western States Regional Joint Board, the Arizona Building and Construction Trades Council, the Southwest Regional Council of Carpenters and the Arizona Education Association.
Arizona Chamber President and CEO Danny Seiden said despite the initiative’s promises, its negative consequences would be far-reaching.
“When lenders can’t collect outstanding debts, they’ll pass their losses onto their other customers, which means higher interest rates for everyday Arizonans,” he said. “At a time of sky-high inflation, do we really want even higher interest rates?”
“What’s worse, thousands of Arizonans will lose access to previously available financing. Left without the ability to collect on their loans, lenders will simply stop doing business with hardworking Arizonans who need access to funds the most, leaving these potential customers unable to get credit to buy a car, rent an apartment or buy a house.”
Todd Sanders, the president and CEO of the Greater Phoenix Chamber, agreed, saying that the passage of the initiative will have detrimental consequences for the people of Arizona.
“The Chamber is opposed to a new initiative that would make it harder for lenders to collect on debts,” he said. “This could make it more difficult for people in Arizona to get access to credit and amplify the current housing affordability issue, making it more difficult for people to buy homes and start businesses in Arizona. The passage of this initiative would be a disaster for Arizona and should be avoided at all costs.”
Other business, civic, and community groups opposing the ballot initiative include the Arizona Bankers Association and Arizona Retailers Association.
“We are working to protect the interests of Arizona small businesses and our community from another attempt by a California political organization to remake Arizona into their image,” said Amber Russo, a small business owner and spokesperson for opposition committee Protect Our Arizona. “Arizonans have been hit hard by the current economy and taking away access to credit will result in even tougher times for hardworking families.”
Interest rates for consumers have risen over the past year. Despite the recent half-point plunge, the average rate for a 30-year home mortgage is 5.3% for the week ending July 7, nearly doubling last year.
The cost of living has increased rapidly over the past year, with area prices up 2.5% over the past two months. According to Bureau of Labor Statistics data released Wednesday, the U.S. inflation rate was 8.3% compared to Arizona’s national high of 11%.
If passed, the act could harm consumers and lenders, leaving the credit market strangled and creditors in an even worse position during a time of high inflation.
The campaign Healthcare Rising Arizona turned in more than 470,000 petition signatures to the Secretary of State’s office on Thursday. If a sufficient number of signatures are found to be valid, the initiative question will appear on the November ballot.