But I guess Ohio voters are still confused about how to vote on the referendum.  This story tries to explain it.   So does this one.

No kidding.  Here’s an article out of Lima, Ohio that makes that point in spades.

This story, “Payday Lenders Bank on Voters” has a clever headline, but the rest is just a summation of the Ohio situation.

From the Toledo Blade:

Jason Gloyd, chairman of the Coalition Opposed to Additional Spending and Taxes, or COAST, labeled the payday lending law “creepy” and “Orwellian.”

Issue 5 was placed on the statewide ballot by the payday lending industry, seeking to repeal portions of a law passed in May drastically curtailing the amount of interest lenders can charge.

Mr. Gloyd attacked provisions in the law that he said create a database of loan transactions and require people who take out payday loans to undergo education in “the government’s values.”

“The privacy intrusions implicated in Issue 5 are simply unprecedented in modern life,” Mr. Gloyd said. “After two transactions in a 90-day period they force you into a government re-education class that you have to pay for.”

A group of about 15 people, some of them employees or owners of payday lending businesses, stood behind Mr. Gloyd during his news conference, holding signs portraying the face of “Big Brother.”

Sandy Theis, a spokesman for the Vote Yes on Issue 5 committee, said the database that Mr. Gloyd cited would not be repealed by Issue 5. She said the industry tracks loans in a database now and “they have consistently allowed serious invasions of privacy.”

This time they are trying to get the referendum thrown off the ballot through a legal manuever involving the signature gathering process.  From the Cleveland Plain Dealer story: 

Secretary of State Jennifer Brunner said she will appoint a hearing officer to decide whether consultants hired to collect signatures to get the payday lending measure on the ballot properly filed the petitions with her office.

If they did not, Brunner could invalidate the signatures and strip the referendum from the ballot. Her decision is expected by Sept. 25.

The referendum seeks to repeal a law capping interest payday lenders can charge on loans at 28 percent and revert to previous practice, which allowed the lenders to charge rates and fees that amount to a 391 annual percentage rate.

ackers of the new law, the Vote Yes on Issue 5 Committee, said some consultants hired by Ohioans for Financial Freedom — the payday lenders — to collect signatures did not file a necessary form.

Anyone supervising the collection of signatures must file a Form 15, which asks for the circulators’ names and addresses and the names of their employers before they can start collecting signatures.

The secretary’s office said it cannot find any evidence that a Form 15 was filed by Arno Political Consultants, a California firm hired by the lenders to collect many of its signatures.

“One of the penalties if you don’t file the Form 15 is a misdemeanor, but separately, you could get thrown entirely off the ballot,” said Sandy Theis, spokeswoman for the Vote Yes on Issue 5 Committee. The group had filed a public records request asking to see the form.

The group asked Brunner “to throw them off the ballot, and if you can’t do that, then at least throw out the signatures collected by this group,” Theis said.

Brunner instead appointed a hearing officer who will hear from both sides before making a recommendation to Brunner.

The anti-payday lending crowd has given up on trying to persuade Ohio voters. 

Update: Here’s the Dayton Daily News story

I was at the grocery store last night and took a spin down the bottled water aisle.  I counted over ten different brands of water. TEN! That was just for still water, not fizzy fancy mineral water or ultra pure distilled or raspberry flavored “performance” water…just plain old water that you can get for pennies out of the tap.  Why does my grocery store carry ten different brands of plain old water?  Because consumers like choices, they might like the image that goes with drinking a fancy French fizzy water, they might choose bottled water over a soda or their tap water might taste like bog water (as mine does) and prefer drinking water that has been purified elsewhere.  In the end, no one forces consumers to buy bottled water, but if they want it the option is there.

That’s what Ohioans for Financial Freedom are fighting for.  You don’t have to take out a payday loan if you don’t want to.  There are alternatives, someone with an unexpected expense can take a cash advance on their credit card, ask their employer for an advance on their payday, ask their family for help, they could pawn a valuable item, some credit unions offer loans or they could just go ahead and pay overdraft or late fees.  These are all perfectly good options, as is taking out a payday loan and that option should remain available to those that want it.

You know what the great thing is about a democracy?  Each and every person gets to have their say, make up their own mind and choose.  Sure, Alexis de Tocqueville and Federalist Paper #10 warned about tyranny of the majority, but with the checks and balances that are in effect in this great country and in the wonderful state of Ohio, the majority vote on payday lending will be significantly more legitimate than the authoritarian move the Ohio legislature made in passing HB 545. 

But that’s not even the best part, in this country we have a strong live and let live ethic.  What might not be good for the goose is great for the gander.  In today’s Delphos Herald, Fourth District Representative Matt Huffman describes why he voted for financial choice, even though he doesn’t think payday loans are always the best idea:

“I voted against it because I think, in some instances, it’s a product people want to have available. I don’t see a lot of difference between these loans and what happens with credit cards where people get a $5,000 line of credit and pretty soon, they’re maxed out and at 19 percent, can never pay it back. Let’s be clear: this is a bad option but it may, at times, be folks’ only option. If they need to make a child support payment or they have a medical bill or some doctor says you have to have $150 up front before he’ll see you. There are different cases where this is appropriate and most people pay it back on payday.”

Allow the voters to educate themselves, form their own opinion and vote on the matter.  Give democracy a chance!

Ohio’s Coalition for Responsible Lending (“OCRL”) has issued a press release filled with deceptive information and fabrications. They should be held accountable and asked to back up their irresponsible claims with facts. It is important that people see through the hype surrounding the issue and consider the facts.

CRL Claims: A “compromise” is threatening the payday lending legislation and “outraging” advocates.

• The Truth: The industry has not put forward language for a compromise bill, but has talked to legislators that are interested in preserving some version of small loan choice for consumers and not putting thousands of people out of work. Our goal has always been to be part of a solution that addresses the concerns of policymakers and provides responsible protections for consumers. This type of scaremongering by OCRL underscores the fact that they do not want to help consumers. They refuse to support legislation that would actually help consumers by addressing issues such as cycle-of-debt. Their goal is not reform, it is an outright ban.

CRL Claims: The industry tapped into an almost never-used provision in Ohio Revised Code that allows credit unions to charge fees of $10 per $100 on top of the 18% APR allowed. Credit unions never took advantage of the provision because it was predatory.

• The Truth: This is misleading. Credit Unions asked for the provision in HB 81, sponsored by Geoff Smith and enacted in April 2006. In fact, the two credit union alternatives frequently referenced by the Bill Faith and OCRL charge more for a first time borrower than payday loan companies do.

For example:

The “Stretch Pay” payday loan alternative, offered by credit unions across Ohio and championed by OCRL and others as a better choice for consumers, comes with an 18% APR plus an annual fee of $35 (for a $100 advance) or $70 (for a $500 advance).

“Grace” Payday Loan offered by Faith Community United Credit Union- Cuyahoga County, OH is 17% APR plus a $15 application fee per loan.

CRL Claims: The industry wants borrowers to pay for industry’s taxes

• The Truth: Like any other product ot service, the costs associated with providing a payday loan dictates the pricing for consumers. Due to their not-for-profit status, credit unions are exempt from federal and state income taxes. And they do not have to pursue a profit. They are, therefore, able to offer payday loan alternatives at break-even or less. Credit Unions do not have the resources or the infrastructure to handle the loan volume after payday lenders leave. In order to continue offering payday loans in Ohio, for-profit payday lenders would need to not only break-even, but pay taxes and make a reasonable profit. The industry welcomes credit unions and any other financial service providers into this market. We believe consumers should have more choices, not fewer, and select the one that best suits their needs.

CRL Claims: First-time emergency borrowers would pay 469% APR…Currently, payday lenders charge $15 per $100, or 391% APR.

• The Truth: The numbers don’t add up. The fee per $100 will go down from $15 to $10.00, the truth is that the only additional fees discussed were for tax liability obligations, but CRL claims the APR will go up from 391% to 469%. This is blatantly false.

I don’t know what it is with the Wall Street Journal, but they seem to have it in for the payday lending industry.   An article today about Rent-A-Center says the company asked a charity it supports not to endorse an effort to ban payday loans.  Rent-A-Center put out this reply.  

The Wall Street Journal wrongly reported this morning that Rent-A-Center threatened to end its financial support of America’s Second Harvest unless the endorsement was withdrawn. In reality, the company asked that, if the Ohio food banks were going to be members of the Ohio Coalition for Responsible Lending, then Rent-A-Center wanted its donation to be redirected to the other 49 states “where fighting hunger was their sole purpose.”

Rent-A-Center, like any other contributor to a charitable organization, wants its donation be used for its intended purpose, not to support a group completely unrelated to the charity’s mission. According to Gus Whitcomb, VP of public affairs for Rent-A-Center, “We made a commitment to help put food on people’s tables. We don’t want our money spent on anything else.” A reasonable request.

Good for Rent-A-Center to respond so quickly and so toughly.   Wall Street Journal reporters, like most journalists, love to listen to anti-business advocacy groups and do their dirty work for them.