One Response to “More from Ohio payday lending rally”

1. Tara says:

   May 7, 2008 at 5:17 pm

   The Consumers Side:
   The Statement: “OUTRAGEOUS APR% is Predatory Usurious and strips wealth from the working middle class….”

   The Truth: The PayDay loan APR reflected is not truly accurate. The way that it is calculated is as if you borrowed the $100 and were charged the $15 fee every two weeks for a year (but keep in mind they dont raise the amount you borrowed from $100!). Lets get real. you pay back a PORTION of what you borrow, which is fifteen percent.

   Payday lenders aren’t allowed to extend credit for an entire year, so why is it fair to act as if the fees you pay back are multiplied into a yearly credit? If that were the case, take your $100 2 week loan, multiply it by 26(52 wks in a yr, biweekly loan=26 wks) $2600 is what you received in this calculated 1 year loan, then multiply the $15 fee times 26 $390 is what you paid to borrow the $2600, you are STILL only paying back 15% of what you borrowed.

   It is an unfair, deceptive misrepresentation of APR if you are not taking into consideration BOTH the amount borrowed and the interest.

   As for the housing market—let’s talk about fairness–and PREDATORY LENDING. I am paying back 2.5 times the worth of my house, yet my APR is 6%–it seems just a tad backwards?

   A rather cliché question raised is “what happens when you give a loan to people who “cannot afford pay them back? You have the mortgage crisis that Ohio is currently in” Um–big difference between a $300 two week loan and a $200,000 mortgage that you repay $450,000 back with interest….I think I can handle the $300 bucks (and the $45 fee).

   Predatory –DEFINED —How about $4 a gallon for gas–I HAVE to purchase gas–I have no choice there, How about the increase in price of food–I HAVE to eat to live…To raise prices on things we cannot CHOOSE to survive without is Predatory. No–Im not being “lent” money when I purchase these items, but I am spending a lot of money without choice.

   But HB 545 DOES give the banks a choice—if you read it, CREDIT UNIONS ARE ALLOWED TO CONTINUE TO GIVE PAYDAY LOANS OF 30 DAYS OR LESS at 10$ per Hundred….which is $5 less than Payday lenders, but get this—they can loan up to ONE THOUSAND DOLLARS! $200 MORE THAN PAYDAY LENDERS! Oh, the kicker is…they can still charge you fees for return checks, or late payments—you think that the bill is siding with the banking industry that has since seen a HUGE loss on NSF fees and OVERDRAFT FEES? Yes, Payday lenders will take credit for that, because they are HELPING the middle class worker avoid 60$ in fees for a bounced $10 check.—By the way—whats the APR on that one?

   The real issues are below this superficial stage that is being set for the elections, Create your platform–take the focus off the REAL problems–we have surpassed recession (the taboo word NO ONE will use) we are headed for depression, to eliminate the choice of financial assistance further empowers our downward spiraling economy. HB 545 Cripples and devastates Ohio’s economy.
   I say Thank You for free will and the ability to have choices…VOTE NO ON HB 545–its another right to choose we are having “chosen” for us.

   Strickland’s Hypocrisy: THE MAN BEHIND THE CURTAIN
   His opinion of the bill driven by “removing the amendment to ban STATE FUNDED KENO ELECTRONIC GAMBLING GAMES in the VERY BARS AND SOCIAL CLUBS THAT HE DROVE OFF A FEW MONTHS AGO??—he is feeling the pressure of his poorly and publicly humiliating budget shortfall.
   So He backed” the HB 545? NOPE, he was just finding a way to slip his “easy fix” into a much debated bill, and as soon as he “blessed” it, a majority of the parties fell in like robots, persuaded by his new found Protection of the Little guy…Not really-Try more like a way to take more money from them.
   OH, how quickly the Republicans “removed” the ban of the Ohio Lottery controlling and offering Kenos.
   The expanded gambling is projected to cover a $73 million shortfall in education funding.
   Governor, If you are looking to protect the “Prey” of predatory lending…why are you looking to put “state funded Keno machine” in bars and social clubs? Do you think alcohol may persuade the poor middle class workers (that cannot decide to obtain a short term loan for themselves) to make decisions they shouldn’t…—do you think THAT’S a little predatory? And the consumer is not benefiting from feeding these machines…HE IS. How does this NOT insult your intelligence, Representatives, Senators and Constituents alike?
   Wow, the truth can be so ugly.

   The Employee side:
   FACT :Only 10% of Payday loaning customers do not pay on their scheduled due date….
   This cap only allows $1.28 in profit per loan…it WIPES out the industry.

   Approximately 7,500 jobs are at stake, with the rising foreclosures the passing of HB 545 will only ADD to the foreclosures.
   Payday lending profits BENEFIT the state— salaries and benefits are paid to employees.
   What will the unemployed do for healthcare?
   What will the unemployed do to pay for the gas that is on a swift upward climb, kissing $4 a gallon?
   Where will the families who foreclose due to unemployment live? Will you vote YES to add bodies to the homeless shelters?
   What will the children of the unemployed do for school supplies and lunch money?
   Will you vote yes to add to welfare claims?
   Will you vote yes to increase food stamp pay out?
   Many companies are laying off employees and shutting down plants due to the state of our economy. We’ve seen the devastating effect a layoff of 600 people can have on an economy, will you vote Yes to multiplying that effect by TWELVE?
   Research shows desperate times in suffering economies lead to crime, will you vote YES to lessen safety and increase crime rates?

   The Resolution:
   AMEND:
   Lower the loan limit to $500
   Introduce the statewide database to track loans and ensure compliance with CURRENT laws governing payday lending.
   Introduce a financial education program to the 10% of customers that cannot pay back their loan
   Allow Payday lending at the same rate of Credit Unions 10% of Principal (a 5% decrease)
   VOTE NO on House Bill 545. And Vote yes on a compromise that allows CHOICE, HELP, and SECURITY

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