One of the marquee ballot initiatives in the Nov. 4 election is Proposition 200, which seeks to change the rules for the payday loan industry.

With millions of dollars raised so far, each side is mounting a very different campaign strategy.

The crux of the Yes on 200 campaign plays on public dissatisfaction of the "quick cash" loan services, ironic considering that nearly all of the $14 million in campaign contributions came from the Arizona Community Financial Services Association, a group which lobbies on behalf of the payday loan industry.

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Playing up the reform angle of the measure, most commercials urge voters to "send the industry a message" and vote for the changes outlined in the initiative.

"The industry is anxiously cleaning up its own act and it’s proud to do so," said Stan Barnes, chairman of Yes on 200.

The proposed changes are being highlighted because the industry faces a fix-or-fail situation.

"Proposition 200 makes pro-consumer reforms while preserving payday loans as an option for those who choose it," Barnes said. "I’m not shy about it. I think it’s important for voters to understand that."

Lacking the backing of an industry against the ropes, the Proposition 200 naysayers have considerable less in their campaign war chest.

About $45,000 has been contributed to the No on 200 campaign, with funding coming, in part, from Tucson-based Strategic Issues Management Group.

The initiative is an all-or-nothing for the payday loan industry in the state. If the Payday Loan Reform Act passes, payday loans can operate indefinitely, albeit with several changes to the way they do business. If voters reject the measure, payday loan operations will terminate on July 1, 2010, and the loan offices will have to dramatically cut interest rates if they are to stay in business.

Payday advancements are short-term loans, often a few weeks, which can carry steep interest rates. A $500 loan for example would have to be repaid at $588.25 two weeks later.

There are more than 700 such loan centers in the state, 110 of them in Pima County, according to a September 2008 study by the Center for Responsible Lending.

Much of the proposition’s language outlines changes to the industry such as limiting one payday loan transaction per person per day and require a payment plan if the customer asks for it.

The proposition also calls for lowering the maximum annual interest rate on payday loans from 459 percent to 391 percent, but that number can be lowered even further if 200 doesn’t pass, said David Higuera, political director for Arizonans for Responsible Lending.

If the 2010 sunset occurs, the maximum annual interest rate the loan centers can charge is 36 percent.

"All the lenders need to play by the same rules," Higuera said.

Leading the No on 200 effort is Kelly Griffith, deputy director for the Southwest Center for Economic Integrity.

Rather than reaching the masses through TV and radio ads, the No on 200 is urging groups such as the Arizona Ecumenical Council, AARP and the Arizona Credit Union League to persuade the groups’ own members against the ballot initiative.

"This is a very grassroots campaign," Griffith said. "It’s been a very much on- the-ground effort.

Contact reporter Nicholas Smith at nsmith@azbiz.com or (520) 295-4238.