\n<\/p>\n
Rodd McLeod thinks voter approval of Proposition 209 this fall will go a long way toward keeping people from being \u201cforced out on the street or lose their cars\u201d when they have medical bills they can\u2019t pay.<\/p>\n
But he also thinks that consumers still need to be on their guard.<\/p>\n
\u201cI think debt collectors are still going to be aggressive and try to get as much money from people as possible,\u201d said McLeod, spokesperson for Arizona Healthcare Rising, one of the main supporters of the proposition.<\/p>\n
\u201cThat\u2019s just the reality of the way the debt collection industry functions, which is why it\u2019s important to have protections in the law so that ordinary people don\u2019t get hurt,\u201d he said.<\/p>\n
Opponents of the law have not given up the fight. They challenged the measure in court, and a Maricopa County Superior Court judge earlier this month temporarily blocked the law from taking effect on any debt incurred before Dec. 5 \u2013 the date the 2022 election results were certified. That injunction was lifted this week, however, and the judge allowed the entire law to proceed for now.<\/p>\n
The proposition creating the Predatory Debt Collection Protection Act passed with an overwhelming 72% of more than 2.4 million votes cast. The 1.75 million who voted for the proposition were the most of any of the 10 measures on the ballot. Only Proposition 211, relating to dark money in politics, had a larger margin of victory, with 72.3% in favor.<\/p>\n
Greater Phoenix Chamber Vice President of Public Affairs Mike Huckins said he was only \u201ca little bit surprised\u201d at the passage of the measure, which he credited to successful marketing by its supporters.<\/p>\n
\u201cThe proponents did a great job of naming it,\u201d Huckins said. \u201cWhen you have a title like Predatory Debt Collection Protection \u2026 it\u2019s an easy one, I think, for people to vote for.\u201d<\/p>\n
Given that, Huckins said he does not think business groups and other opponents had \u201cthe resources were there to get the message out to the voters.\u201d<\/p>\n
Proposition 209 makes several changes to state law that supporters said will protect consumers from crushing debt that can lead to a downward economic spiral, costing debtors their cars, which can cost them their jobs, which can cost them their homes.<\/p>\n
The measure\u2019s backers said it was aimed at medical debt, the No. 1 cause for calls from debt collectors and what McLeod said is a leading cause of personal bankruptcies. But much of the new law actually applies to all debt.<\/p>\n
The new law lowers the interest rate that businesses or debt collectors can levy on medical debt from the previous 10% to 3%. It will also increase the value of homes, cars and bank accounts that are protected from debt collectors for all debt, while lowering the amount of disposable income that can be garnished to settle a debt, from the previous 25% to 10%.<\/p>\n
\u201cAny time a debt collector tries to take someone to court for unpaid debt, you know, the \u2026 judges will be operating under these new guidelines for what is allowed to be claimed by the debt collector,\u201d McLeod said.<\/p>\n
Opponents insist that the long-term impact of the law will end up backfiring on the people it is intended to protect.<\/p>\n
\u201cI think it\u2019s going to affect all consumers, not just those that have medical debt because \u2026 it raises the exemptions from automobiles, your house, your salary,\u201d Huckins said. \u201cThere may be a little bit of buyer\u2019s remorse for some folks for voting for this once they see the impact it\u2019s going to have on interest rates down down the line.\u201d<\/p>\n
That was echoed by Michael Guymon, president and CEO of the Tucson Metro Chamber, who said in a written statement that the new law will be \u201cbad for the Arizona economy, bad for many of our businesses and bad for overall lending in the state.\u201d<\/p>\n
Guymon complained about the supporters\u2019 framing of the measure, which he said was \u201cmarketed and described on the ballot as a medical debt initiative and it is not.\u201d<\/p>\n
\u201cIt only references medical debt specifically as it pertains to the interest rate change. The public did not understand that it was going to have an impact on ALL debt and therefore have a detrimental effect on lending, the Arizona rental market, etc.,\u201d Guymon wrote.<\/p>\n
He said businesses will be forced to raise prices for everybody to make up for the debt they will no longer be able to collect, an argument advanced by Huckins as well.<\/p>\n
\u201cWhen you put these sort of protections around folks, where they don\u2019t have to pay back their debts to a certain extent, it\u2019s still going to raise the interest rates for the rest of us and it\u2019s going to reduce the credit market for those folks that \u2026 probably are going to need it the most \u2013 those folks that don\u2019t have the cash to pay for stuff up front,\u201d Huckins said.<\/p>\n
But McLeod said that consumers need protection now \u2013 which was evidenced by the roughly 470,000 signatures that were submitted to put the measure on the ballot and by the overwhelming support at the ballot box. He said the chambers of commerce need to recognize that.<\/p>\n
\u201cWe\u2019re really pleased and thankful that the overwhelming majority of Arizonans agree with us,\u201d McLeod said. \u201cWe would like to see the chamber of commerce join us in that belief.<\/p>\n
\u201cWe just believe so strongly that you know, somebody with a medical bill they can\u2019t pay should not be forced out on the street or lose their cars and couldn\u2019t get to their job anymore,\u201d he said.<\/p>\n
But McLeod said the law alone will not protect consumers.<\/p>\n
\u201cWhat consumers can do to protect themselves is have a lawyer who is up on the law,\u201d he said. \u201cThe sad reality is that the overwhelming number of consumers who go to court for this sort of thing are not represented by a lawyer.\u201d<\/p>\n<\/p><\/div>\n