Debate heating up in Ohio
October 12, 2008 | Bill Faith, Newark Advocate, Ohio, industry, industry critics, media coverage, regulation, states | Comments (4)This article contains some video of Bill Faith, anti-payday lending extremist, and Ted Saunders of CheckSmart, an Ohio-based payday lender. Click on the links a little bit below the pictures.
We think Saunders won this hands down.
Comments»
Seeing the two videos (and note the website provides over 3 minutes of video from Faith and less than 2 minutes of video from Saunders) leaves me with this question. Is Faith correct that the average payday loan customer takes out 12 or 13 loans per year? I have heard different figures from different critics on that score, and am wondering what the industry position is.
Even if he is correct, that of course isn’t any reason to ban the product. If people are taking out twelve loans a year that may simply mean that they are struggling to get by and are saving money twelve times a year on bounced check fees, late-rent-payment fees, late credit-card-payment fees, and other such charges.
Furthermore, the average American happens to eat too much food, but do we want the government keeping a database on how much we eat and implementing regulations to make sure we don’t eat too much? Of course if HB545 isn’t repealed Ohioans not only won’t be able to take out too many payday loans but they won’t be able to take out any, even when they have an emergency situation – except of course by going to the neighborhood loan shark, who will use violence to collect on his loan, or by using offshore Internet lenders who generally charge much more than payday loan stores.
If legislation like HB545 is allowed to stand, then pretty soon the government will be telling all merchants and service providers how much they can charge, and every time you try to buy something at a store the store will be required to check your financial situation to make sure you can afford to buy it. Saunders was absolutely right that Issue Five is about a lot more than payday lending.
I hope I’m not being a comment hog, but to elaborate on my previous comment it seems to me that overeating, the overconsumption of pharmaceutical drugs, and many other common excesses wreak incalculably more havoc in our society than people taking out too many payday loans, but the payday loan industry has been targeted by a coalition of professional critics and moralists (perhaps influenced by the banking industry which is losing billions of dollars in overdraft fees to the payday loan industry) who think it is an easy target because they can complain about “outrageous triple-digit interest rates” – as if payday lenders are charging many more times what they could be charging and almost all the fees they charge aren’t necessary just to recoup the cost of making the loans. The critics don’t care if payday loans are banned because they don’t need to use them, but the people who do use payday loans, according to third-party customer satisfaction surveys, overwhelmingly consider them to be a useful financial tool and certainly do not want them banned by laws which require that they be offered for far less than the cost of issuing them.
This should not even be an issue for voters to decide, any more than the residents of a locality should able to vote on whether members of a particular racial minority should be allowed to eat in restaurants. If the critics truly want to help people who get themselves into a bind by their unwise use of payday loans, then they should lobby for the legalization of competing loan products which might serve some payday loan customers better, or for the government to provide emergency loans and financial counseling to people in need. They should try to provide people with more and better choices, instead of seeking to take away what is currently the best choice many people have and trampling on basic freedoms which we Americans expect from our government in the process.
Vote yes on Issue 5!!
vote no on issue 5 you idiot