From a LTE in today’s paper:
The Plain Dealer’s editorial on short-term lending in the state misrepresented the facts (“Payday lenders keep right on fleecing Ohioans,” March 16). Currently, short-term lenders in Ohio are operating under the Small Loan Act, just as legislators requested last year. This law allows borrowers to receive loans of $500 or more at 28 percent APR with a one-time fee that can’t be rolled over or compounded.
Major banks such as Wells Fargo and Fifth Third have been offering loans under these same rules for years. Incredibly, interest groups are attacking only those organizations that previously offered payday loans. The group behind these attacks, the Center for Responsible Lending, is not responsible at all. This lobbying organization is funded by Herb and Marion Sandler, billionaire financiers who made their fortune offering the worst kinds of subprime, adjustable-rate mortgages.
During these tough economic times, credit is already hard enough to come by in Ohio. Further restriction of short-term loans would do nothing to reduce the financial need of individuals, and would only leave them struggling with another challenge to overcome.
The Plain Dealer is struggling to stay in business by printing INTERESTING editorials. They are not going to let the facts stand in the way of newspapers sales.
I think another reason so many editorial boards have opined against the payday loan industry may be the fact that banks supply a significant portion of their advertising revenue, and banks are of course not happy that people use payday loans to avoid the bounced-check and overdraft charges (not to mention credit-card late-payment and overlimit fees) which make up such a large percentage of their income.