Heated debate in Columbus Dispatch
November 1, 2008 | Bill Faith, Columbus Dispatch, Ohio, industry, industry critics, media coverage, regulation, states | Comments (13)Here’s Niger Innis from the Congress on Racial Equility in today’s paper:
“I’m always a little bit skeptical when crusading members of the media or elite activists who don’t share the pigmentation nor the ZIP code of the people they are alleging to save start talking about ‘these people’ being taken advantage of,” Innis said during a spirited debate yesterday at the City Club of Cleveland.
“This feel-good activism can often have the stench of paternalism and a fundamental belief that working-class Americans are incapable of making their own financial decisions.”
The Payday Pundit thinks Niger Innis has summed it up nicely.
Comments»
I just went to my mailbox and received a flyer that had the Hypocritical Statement of the Year. In a brochure from the Repulican Party of Ohio announcing their support of a No Vote on Issue 6, current Speaker of the State House, Jon Husted was quoted with his opinions. The first line in his testimonial is: “Job creation in Ohio is my number one priority.” Really, Speaker Husted? Are you joking? Need we remind everyone this is the man who led the bulldozer in the House to create and support HB 545 and is the driver of the truck that is trying to run over the payday lending industry and ELIMINATE 6,000 jobs! Which one is it Mr. Speaker? Create jobs or eliminate jobs. Looking at your record you either are trying to play both sides of the fence or quite frankly, you can’t don’t understand the difference between the two. What a disgrace to a party I have belonged to my entire life. For those in Speaker Husted’s district, the next time he is up for re-election, see if he can create his own job by replacing him with someone who has backbone and has the fortitude to develop a philosophy and to stand by it.
I voted YES on Issue 5 and YES on Obama. If the Issue fails, Obama will establish a federal law against Payday lending. Either way, you losers are gone!!! LOL! By the way, did Niger vote for Obama?
I can’t wait to vote for Speaker Joh Husted.
The payday lenders don’t have any friends in the state of Ohio. The Republicans, Democrats and even the Govenor wants you gone. Get the hint and LEAVE!!! Vote YES on Issue 5!!!
Come election day, we will see how many friends we have. As far as any federal regulations are concerned, I doubt very seriously if placing any caps on a payday lender will be a priority in an Obama administration. Also, us “losers” aren’t going anywhere and I believe you will see how steadfast we are this Tuesday.
http://www.dispatchpolitics.com/live/content/local_news/stories/2008/11/02/copy/POLL02.ART_ART_11-02-08_A1_93BOK6G.html?adsec=politics&sid=101
Read it and weep, folks. This is the only poll that used the actual ballot language. When people read the ballot language, Issue 5 passes 69-31. Goodbye and good riddance.
Evaluating payday loans in terms of the annual percentage rate is just dumb, Jeff. The annual percentage rate is just a tiny part of the picture. If Proposition 5 passes it is simply because people don’t understand the issue, which has been misrepresented by critics of the industry who are trying to trick people into thinking that payday lenders are charging 14 times (391/28) more what they could be charging for loans.
The fact is that payday lenders lend money to people whom nobody else will lend to, and about 90% of that 391% interest goes towards covering the cost of issuing the loans. If a double-digit APR cap is imposed then small-dollar short-term loans – the only type of loan which many people can qualify for – will simply cease to be available and many people will suffer greatly because of it.
This shouldn’t even be before the electorate because it is a matter of fundamental rights, the right of merchants and service providers to set their own prices and the right of consumers to choose for themselves which products and services they wish to avail themselves of. Obama was right when he said, in one of the debates, that fundamental rights should not be subject to referendums.
Oh so confident! You were confident at the State House when the House and the Senate voted to put you out of business. Ohioans will do the same on Tuesday! Everyone I know voted to reduce the APR to 28%. I asked them after they had voted. EVERYONE VOTED YOU DOWN TO 28 %. Why wouldn’t they? It makes sense! Get ready to close up shop because you are about to get the boot! I can’t wait. Your own customers and employees testified against you. Legislators hate you. The Governor signed you out of business. Obama will do the same. No one wants you here. Get out!!
Columbus Dispatch Poll:
State Issue 5: Payday-lending referendum
69% YES. Uphold the interest-rate limit of 28% imposed by the General Assembly.
31% NO. Allow payday lenders to charge 391% annual percentage rate.
Ignore the facts, Terry, just go with the crowd. That’s what every mob does before they burn their town to the ground. Who cares about preserving freedom? Let’s just find a scapegoat for our frustrations and persecute them out of existence…
Yeah, freedom to charge people 391% interest.
Tell me, if APR isn’t appropriate to calculate a payday loan, is MPH appropriate to calculate the speed of a car if I’m only driving for 10 minutes? Can I tell a cop that “I couldn’t have been going 80 MPH, I’ve only been on the highway for 10 minutes! I haven’t been driving for an hour.” That won’t fly folks.
This “financial options” and “jobs” argument won’t fly either. We all know that the majority of payday lenders have already applied to loan under different laws. The majority of payday lenders aren’t going anywhere, they just have to offer a better product.
Ohio voters are smart enough to see through you guys, no matter how many millions you spend on adds.
Don’t blame us. You were given an opportunity to repent. What did you do? Nothing! Your collection practices were shameful. Your executives enjoyed lucrative lives. Now look at you. All eyes are on Ohio. By November 5th, the wheels will start turning all over the country. The era of the payday lenders is over. There are two options. Look for a new job or collect unemployment. It’s over! You will lose by a landslide.
In my opinion it is best for our society that people have the right to offer a loan at a million percent APR, as long as the offering is advertised and presented clearly and honestly, just as I should have the right to put my autograph up for sale on eBay for a million dollars as long as there is no deception involved. And I shouldn’t be required to investigate the financial situation of interested parties to make sure they can afford to purchase it – that is their responsibility.
Just as the Supreme Court unanimously decided that Larry Flynt should have the right to publish a parody which they considered distasteful – because freedom of speech must be protected – so we should all have the right to make outrageous offerings as long as they are honest, because freedom of commerce must be protected. And if someone buys my autograph for a million bucks and then goes bankrupt as a result, well he needed to learn to be more frugal. That’s why W.C. Fields said, tongue in cheek, “Never give a sucker an even break!” That wasn’t advice for making money, it was advice for helping people wise up.
Now that isn’t to imply that I think payday loans are a bad deal. A payday loan is an option which is appropriate in some circumstances and it is an option which it is very important be preserved because payday loans can in fact save lives in emergency situations. For some people a payday loan – or taking out repeated payday loans – is a foolish choice and those people need to learn from their mistakes just as people need to learn from their mistakes not to drink too much wine or eat too much high-fat food. All good things can and are abused by people who need to learn to be more responsible.
With regard to the APR, again it is only a small part of the picture. The APR of a loan doesn’t tell you how profitable the loan is for the lender – because it leaves out his cost in issuing the loan – and doesn’t tell you how wise the transaction is for the consumer, because it doesn’t consider his other alternatives. The APR, as a statistical tool, is only useful for comparing loans which you have access to; if all other factors are equal then the wisest choice is the one with the lowest APR. But if a consumer doesn’t qualify for any other type of loan, which is the case with most payday loan customers, then the APR becomes irrelevant except for comparing different payday lenders. In either case the wisest course of action is to weigh the actual dollar cost of the loan versus the consequences of not taking it out, and for some people the payday loan will be a wise choice and for others it will not. It is a personal financial matter and consumers should have the right to make that decision for themselves. The government can help by offering free credit counseling and perhaps should start a nonprofit emergency loan program, but it shouldn’t trample on the rights of honest lenders and people who wish to utilize their services.