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PHOENIX — A plan to kill the payday-loan industry has died.

Rep. Marian McClure, R-Tucson, said Monday there is no way she can get the more than 153,000 signatures by July 3 to put her measure on the November ballot. McClure conceded her all-volunteer campaign to make payday lending illegal has produced only about 30,000 signatures.

McClure instead will join forces with Sen. Debbie McCune Davis, D-Phoenix, who is leading a campaign to defeat a separate, industry-sponsored initiative that would make payday lending forever legal in Arizona. Authorization for payday-loan services now expires July 1, 2010.

Both sides in the political dispute agree on one point: The outcome of the vote in November will turn on the question of whether voters believe Arizonans should have the option of taking these short-term, high-cost loans.

Stan Barnes, spokesman for the industry-backed campaign, said the small number of signatures McClure and her allies gathered shows more people want to keep the option of taking these short-term, high-cost payday loans.

But McClure said the failure may be due more to apathy "because everyone seems to think that someone else is going to step up to the plate and do the work."

McCune Davis acknowledged many Arizonans do take advantage of the short-term, high-interest loans, even though the effective annual percentage rate tops 400 percent. That compares with the cap of 36 percent under state law for all other types of loans.

She said if payday lending becomes illegal, it won't be the end of the world. McCune Davis said some people have a good enough credit rating to borrow money at 36 percent.

"There are others who will find family and friends to borrow from," she said. "And there are some who probably won't (be able to borrow money), but perhaps shouldn't."

McClure said the state does have a role in helping protect people from unfair interest rates.

Payday loans — technically "deferred presentment transactions" — were authorized by legislators eight years ago as an exemption from state usury laws.

Under that law, an individual can borrow up to $500 by writing out a check for that amount plus up to $17.50 per $100 borrowed. The lender agrees not to cash the check for up to two weeks.

But lawmakers, concerned about the fees, made the law temporary to see how payday lending worked. That authorization expires July 1, 2010.

The industry-sponsored initiative gets rid of the expiration date. But the Arizona Community Financial Services Association also agreed to include some limits on payday lenders in their measure to garner voter support.

One would give customers who cannot repay the loan at the end of its term an extension of up to four paydays, or four months if the person is unemployed. The borrower would owe no additional interest if each payment is made on time.

And the effective interest rate also would drop slightly: The fee would be capped at $15 for every $100 borrowed, versus the current $17.65.

McClure said that still amounts to an annual percentage interest of 391 percent, a figure she believes is high enough to shock voters to reject the initiative.

But Barnes said that number is irrelevant.

He said these unsecured, high-risk loans are based on fees, not interest. And Barnes said living under a 36 percent cap would come down to "a dollar and change" for a two-week loan, "which is not enough to keep the lights on."

Records filed with the Secretary of State's Office show the payday lending group has so far put more than $2.3 million into the campaign. That compares with less than $25,000 for initiative foes, including $10,000 from the Local 99 of the United Food and Commercial Workers Union.

McCune Davis said additional fundraising is under way.

"I assume we'll have money to buy radio (commercials)," she said.

"We'll have signs," McCune Davis continued. "We'll have just the traditional things you do during a campaign season to get the word out."

Even if the initiative fails, that does not automatically mean payday lending will disappear on July 1, 2010. Industry lobbyists still can try to persuade state lawmakers to repeal the self-destruct date in the law.

But both McClure and McCune Davis predicted any bill to keep the industry alive would be vetoed by Gov. Janet Napolitano, whose term runs through the end of that year.