Gas Station Ditches Arizona Payday Advance Option
By Paul RizzoPayday Loan Writer
No longer will Southwest Gas Corp. steer customers to Arizona payday loan lenders to pay their gas bills in cash - effective immediately.
The company is terminating the lenders’ role as payment stations for its 1.8 million customers in the state, California and Nevada.
The stunning move to protect consumers comes after a June 12 Tucson Citizen column criticizing Southwest and Tucson Electric Power Co. for their relationships with payday loans lenders. Tucson Electric is “committed to find another option” so it, too, can end its association with payday advance loan lenders, spokesman Joe Salkowski said.
Payday lenders, unfortunately legal in 38 states, charge extremely high fees on small loans, generating the equivalent of 360 percent interest or more.
The no faxing payday loan lenders are ubiquitous in poor neighborhoods, so they’re easily accessible to folks needing to make quick cash utility payments before their power is shut down.
That’s one reason 650 payday lenders are used to take cash payments for 21 large utility chains across the U.S., the National Consumer Law Center found in a June report “Utilities and Payday Lenders: Convenient Payments, Killer Loans.”
Why the sudden policy change at Southwest Gas? “It’s the right thing to do,” spokeswoman Libby Howell said.
“This is incredible and a great example of corporate leadership and responsibility,” said Kelly Griffith, deputy director of the Southwest Center for Economic Integrity. Sending a financially vulnerable consumer into a [fast cash loan] store to pay their utility bill is a recipe for financial disaster.”
Studies have shown that most faxless payday loans are obtained not for emergencies but to pay bills, Griffith said.
“I hope the leadership demonstrated by Southwest Gas will be indicative of a changing social, moral and economic understanding about predatory payday lenders,” she said.
