Good grief.The Plain Dealer knows very well that “391%” is nothing but an example – yet it keeps printing this falsification as if it were law. This number is not the current rate cap for payday loans. In fact, this number doesn’t appear in either the old or new laws. 391% is an example made up to make payday loans look bad, based on “rolling over” one loan 26 times in a year. This practice is ILLEGAL in Ohio and it can not occur in real life.
Issue 5 permits the new loan law to take effect so that any institution can offer loans under the 28% cap. The only change it makes to 545 is it leaves the current law in place too. What’s wrong with enabling both loan products at once and allowing the consumer to choose between the two? You know the answer – the Plain Dealer doesn’t get to make the call.
Kudos to Secretary of State Jennifer Brunner for being one of the few honest politicians in the state. Vote NO on Issue 5 and let the public make the payday lending decision
Payday Pundit reader takes Cleveland Plain Dealer to task
August 24th, 2008 · 3 Comments
Tags: Cleveland Plain Dealer · Ohio · industry · media coverage · regulation · states
3 responses so far ↓
1 Arthur Ham // Aug 24, 2008 at 5:06 pm
391% is not a falsification. That is the annual percentage rate for a 14-day loan with a fee of $15 per $100 borrowed. TILA requires that this number be disclosed in the contract.
If you want to create transparency in markets, consumers require a common measure by which to assess the cost of credit. Even neo-classical economists agree about this. That is the purpose of the APR.
What 391% tells the consumer is that a payday loan is a lot more expensive than a credit card or an installment loan. Those lenders won’t charge you anywhere close to $30+ a month if you borrow $100. This is useful information.
2 FRANK SINKOVICH // Aug 25, 2008 at 9:43 am
AM I WRONG OR DID THE STATE OF OHIO ORIGINALLY SET ALL OF THE APR’S TO BE LISTED? DID THEY NOT SET DOWN ALL THE RULES WE, THE PAYDAY LENDERS, WERE TO FOLLOW? WHY ARE COMSUMERS ONLY ALLOWED TO COME TO US 4 TIMES A YEAR BUT CAN GO ANYWHERE ELSE AS MANY TIMES AS THEY WISH? IT’S A CASE OF STUPID POLITICIANS ACTING STUPIDLY.
3 A Hazlett // Aug 25, 2008 at 11:54 am
Arthur, I am confused by your statements. First you say that is cost $15 per $100 borrowed, which is correct in Ohio. What are you talking about when you say that those lenders wont charge you $30 per month. Are you assuming that the customer will borrow again for 2 more weeks? In Ohio they have to payoff before they can borrow again and only a small portion of those customers will come back the next day to borrow again so most are paying $15 per month. Most credit cards are at least 15 percent especially when you consider the extra fees they add on and how quickly they change your interest rate.
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