Arizona Senate Bill SB1059

Arizona 2024 Regular Session

• Introduced: 1/16/24
• Report Pass: 1/22/24
• Report Pass: 1/29/24
• Engrossed: 2/1/24
• Report Pass: 2/28/24
• Report Pass: 3/4/24
• Enrolled: 3/14/24
• Passed: 3/18/24
• Chaptered: 3/18/24

Caption

Judgments; interest rates

Impact

By setting a maximum interest rate on medical debt, SB1059 serves to modify existing practices in debt collections related to healthcare services. The law intends to protect consumers from excessive interest charges, making it more manageable for them to repay their medical debts. Furthermore, the bill regulates how interest is calculated for non-medical debts, setting a standard rate of ten percent per annum unless a different rate is agreed upon in writing. This can lead to clearer expectations for consumers and creditors alike in financial transactions.

Summary

Senate Bill 1059 amends Section 44-1201 of the Arizona Revised Statutes to regulate interest rates applicable to various types of debts, particularly focusing on medical debt and its associated judgments. The bill establishes a cap on the interest rate for medical debts, stating that it shall be the lesser of either the annual rate based on the weekly average one-year constant maturity treasury yield or three percent per year. This regulation aims to provide consumer protections specifically for individuals facing medical expenses, thereby alleviating some financial burdens associated with such debts.

Sentiment

The overall sentiment towards SB1059 appears to be positive among consumer protection advocates who argue that the bill enhances protections for vulnerable populations, particularly those with rising medical expenses. Supporters view this regulation as a necessary step towards creating a fairer financial landscape. However, there are concerns from creditors and financial institutions about the potential limitations this bill introduces to their ability to charge interest, which they argue could impact the availability of credit to consumers. This indicates a divided viewpoint on the extent of regulation needed in financial matters.

Contention

Notable points of contention surrounding SB1059 include the potential economic implications for businesses offering credit and medical services. Critics argue that the interest restrictions might limit financing options for healthcare providers, who may then opt to increase the upfront costs of services to compensate for the loss in potential interest income. Furthermore, the prohibition of prejudgment interest on certain damages may provoke discussions about fairness in compensatory practices, particularly for injuries linked to medical debts.