Goldwater Institute weighs in on lawsuit challenging Arizona debt cancellation initiative

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The Goldwater Institute wants to see a question removed from the November 2022 general election ballot in Arizona.

The Phoenix-based nonprofit thinks that the legally required description for the “Protection from Predatory Debt Collection Act” is misleading and should be disqualified from the ballot under Arizona law.

The institute filed an amicus brief in a lawsuit filed by Protect Our Arizona on the matter on Monday.

“This deceptive, foolhardy, and immoral proposal is being sold to voters as limiting the interest rate on borrowing to pay medical expenses, so that Arizonans can obtain affordable healthcare without being saddled with debt,” the Goldwater Institute wrote in a press release. “But the proposition would inflict economic damage far beyond what voters are being told.”

The organization argues that the proposal would make it harder for lenders to recoup the money they loan, even if those funds have nothing to do with medical care. It adds that, by restricting garnishments and raising the amount of home equity shielded against unpaid creditors, all sorts of people and businesses, including landlords, and judgment creditors, would lack options to get their money back. The organization also argues that this would disincentivize lending.

“If the Act were to become law, the enormous losses it would inflict on lenders and creditors would have a devastating effect on the ability of Arizonans to obtain loans or to afford housing,” the Goldwater Institute wrote. “Making it harder for lenders to collect when borrowers fail to pay will increase the cost and decrease the availability of credit. And that will make it especially difficult for low-income earners to get loans and exacerbate the state’s housing affordability problem.

“But rather than explain this to voters, the initiative’s authors misrepresented the Act’s aims and effects,” it added. “No one should be able to mislead voters about ballot measures—especially out-of-state special interests who don’t have to suffer the consequences of dangerous public policies.”

Additionally, the Goldwater Institute added that at a time of rising inflation, Arizonans deserve an honest description of how the ballot initiative would impact the state.

Healthcare Rising Arizona, the organization spearheading the ballot initiative, could not be immediately reached for comment on Tuesday.

Republished with the permission of The Center Square.