Business groups announce opposition to union-backed debt collection initiative

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Two of the state’s leading business groups have announced their opposition to an initiative that would decimate Arizona residents’ ability to secure credit and financing.

Both the Arizona Chamber of Commerce & Industry and the Greater Phoenix Chamber said they oppose what proponents have called a “robbery debt protection bill.”

The Predatory Debt Collection Protection Act is being touted by advocates to help Arizonans on medical debt from unfair collection practices, protect additional assets from sale to pay mandatory medical bills, and lower interest rates.

Proponents claim the initiative is aimed solely at protecting consumers from unfair medical debt practices, but many believe the muddled language will have a major impact on all forms of debt financing.

The initiative is supported by the California-based union SEIU-United Healthcare Workers West and by the Arizona Democratic Party and unions UNITE HERE Local 11, the Western States Regional Joint Board, the Arizona Building and Construction Trades Council 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 debt, they pass their losses on to their other customers, which means higher interest rates for ordinary Arizona residents,” he said. “Do we really want even higher interest rates in times of sky-high inflation?”

“What is worse, thousands of Arizonas will lose access to previously available financing. Without the ability to collect their loans, lenders will simply stop doing business with hard-working Arizonans who most need access to funds, leaving these potential customers unable to obtain credit to buy a car, rent an apartment, or to buy a house.”

Todd Sanders, the president and CEO of the Greater Phoenix Chamber, agreed, saying passage of the initiative will have adverse consequences for the people of Arizona.

“The Chamber opposes a new initiative that would make it more difficult for lenders to collect debt,” he said. “This could make it harder for people in Arizona to access credit and compound the current housing affordability problem, making it harder for people to buy homes and start businesses in Arizona. Passing this initiative would be catastrophic for Arizona and should be avoided at all costs.”

Other business, civic, and community groups opposing the ballot initiative include the Arizona Bankers Association, the Arizona Retailers Association, and the NAACP Phoenix Branch.

Consumer interest rates have risen over the past year. Despite the recent half-point tumble, the average interest rate on a 30-year home mortgage is 5.3% for the week ending July 7, nearly doubling over the past year.

The cost of living has risen rapidly over the past year, with area prices rising 2.5% over the past two months. According to Bureau of Labor Statistics data released Wednesday, the US inflation rate was 8.3%, compared with Arizona’s national peak of 11%.

If passed, the law could hurt consumers and lenders, choke the credit market and leave lenders in an even worse position at a time of high inflation.

The Healthcare Rising Arizona campaign submitted more than 470,000 petition signatures to the Secretary of State’s office on Thursday. If a sufficient number of valid signatures are found, the initiative question will appear on the November ballot.

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