PHOENIX -- Attorney General Terry Goddard said Tuesday that payday loans need to be outlawed because most Arizonans who use them don't know when -- or how -- to stop.

 Goddard said while he does not particularly like the ability of lenders to charge triple-digit interest rates for two week loans, he understands that sometimes people need money for emergencies. "I have no problem with that,'' he said. "And if it's clearly disclosed I think that's a legitimate transaction.''

 But Goddard said he wants voters to reject Proposition 200 because that isn't what is happening. He said 62 percent of Arizonans who go to payday lenders have 12 or more loans within the course of any year. "What we see is people getting caught in a cycle of indebtedness that they can't get out of,'' he said. "You're getting folks who are taking out payday loans to pay off the last payday loan.''

 Industry spokesman Stan Barnes said he has no Arizona-specific figures. But he said the numbers that Goddard has are probably not out of line, citing national statistics which show the "average'' payday loan store customer gets between eight and 12 loans a year.

 He said, though, the initiative, being financed by $11.6 million so far from payday lenders, does have provisions designed to deal with some of that.

 One says someone who can't pay off a loan at the end of two weeks is entitled to an interest-free extension. And during that time, he said, the borrower's name is in a database which precludes that person from taking any new payday loans. Once that debt is paid off, though, the person can borrow over and over again.

 Barnes also said Proposition 200 would eliminate "rollovers,'' where people can take an immediate new loan from the same lender. Goddard said these are not the kind of real reforms needed to allow the high-interest loans to remain legal after the statutory authority to make them expires in less than two years.

 Barnes, however, said the decision to borrow from payday lenders is a personal choice, one that should not be limited by government. "Terry Goddard doesn't think someone should have more than one loan a year?'' Barnes said. "Well, it's not Terry Goddard's choice,'' he continued. "There's an individual choice in this equation that's more important than a big government choice by Terry Goddard.''

 That question about the role of government is at the heart of the debate over Proposition 200.

 State law limits lenders to charging interest rates no higher than 36 percent a year. But a temporary exception to the law approved in 2000 allows two-week loans of up to $500 for a fee of up to $17.85 for each $100 borrowed.

 When lawmakers refused to extend that exemption, the lenders bankrolled the initiative to convince voters to keep the industry alive. They did agree to cap the fee at $15 per $100, though that still computes out at 391 percent on an annual basis.

 Goddard said this is the kind of complex issue that needs legislation to "deal with the abuses.'' Aside from people who get into a "cycle of indebtedness,'' Goddard said there should be some alternative short of that 391 percent interest rate.

 But he noted that if Proposition 200 passes in November it will forever end any chances of reform or a lower interest cap. That's because the state constitution forbids lawmakers from tinkering with any measure which gains voter approval. Less clear is what happens if payday lending is no longer an option.

 Goddard said credit unions elsewhere in the country have been willing to provide short-term, small-dollar loans to their customers, all within that 36 percent usury cap. He acknowledged, though, that has not been the case in Arizona.