Mary Hulburt from Consumer Credit Counseling Services–an organization which charges consumers to renegotiate their debt for them–has an oped in the Cincinnati Enquirer today where she mentions, among other things, payday loan debt.

She could have just directed the individual back to the free extended payment plan at payday loan stores, but then I guess the CCCS wouldn’t have gotten its cut.  Looking out for consumers’ best interests indeed.

Well, according to this article, they’re in a state of flux:

Payday lenders say the rate limit enacted by the Legislature, signed into law by the governor and approved by voters as Issue 5 is too low for many of them to continue operating in Ohio. The new rate caps the interest for a two-week loan for $100 at about $1.08.

Their customary charge of $15 amounted to an annualized rate of about 391 percent.

Kenwood-based Check ‘n Go said it isn’t sure what lies ahead.

“We will continue to explore opportunities permitted under Ohio law to support our customers with financial products and to provide jobs for our associates,” spokesman Jeff Kursman said. The company has 71 stores across the state, including 12 in Greater Cincinnati. “Operating under the restrictions set forth in House Bill 545 is not an option.”

It’s pretty ugly:

An effort to repeal caps on so-called “payday loan” interest rates in Ohio appeared headed to a resounding defeat statewide.

In early returns, the payday loan issue, Issue 5, showed 69 percent of voters in favor of keeping limits on how much the industry can charge and only 31 percent against it, a rare “yes” vote for a statewide initiative.

The Enquirer, opponents of the industry from day one, only wrote one editoral.  A misleading screed that takes the talking points right from radical advocacy groups.

Great letter today in the Cincinnati Community newspaper.

I work at ACE, a payday lending store, and I am proud to say I have helped countless people secure payday loans during financial emergencies.

However, we will no longer be able to provide these services unless Ohioans vote no on Issue 5 in November.

As taxpayers and citizens, it should be our right to spend – and lend – money as we see fit, without excessive interference from the state government.

In addition, closing down the payday lending industry will eliminate 6,000 jobs in our state.

Is that really what we want or need?

When you go to the ballot box this November, please vote no on Issue 5.

Joeli Edmonson

Airymeadows Drive

Maineville

Ohio House Speaker Jon Husted today explained why he thinks eliminating jobs and limiting financial choice is a positive path forward for the people of Ohio:

“We capped the [payday loan] interest rate at a level that created a reasonable expectation that the borrower could pay it back, that they wouldn’t be trapped in a cycle of debt,” Husted said. “We didn’t ban small loans, we banned a defective product.”

Right — they didn’t ban small loans, they effectively banned small loans.  Details, details.  Why is it that not one Ohio politician who voted for this atrocious legislation will step forward and say what they’re dying to say: “You know what?  I think the people of Ohio are irresponsible and have proven that they can’t handle their finances.  I voted to effectively ban payday lenders because I trust my judgment more than that of the people who elected me.”

These self-appointed nannies love to put the payday loan industry on the hook for “cycles of debt” that they have no quantifiable evidence to back up, but refuse to be held accountable for the possibility of 6,000 lost jobs:

Strickland, Harris and Husted said there is no evidence that 6,000 jobs will be lost as a result of the new law.

Evidence is a funny thing.  The Payday Pundit thinks Strickland, Harris, and Husted will have all the evidence they’ll ever need about Ohioans’ views on payday loans if the repeal initiative gets on the ballot.

The winner is Carolyn L. Dessin, a law professor at Akron School of Law.  In a column today on the Cincinnati Enquirer  she essentially repeats every half-baked opinion of the Center for Responsible Lending.  

Here are just a few of the  ”facts” that make Professor Dessin the “winner.”  Payday Pundit’s points are in CAPS. 

She says: “The people who seek payday loans are generally in extremely bad financial shape.”  THERE IS NO EVIDENCE OF THIS.  PLEASE CITE A STUDY, PROFESSOR.

She says: “No responsible lender would lend to many of these borrowers.”   WHAT? ALL PAYDAY CUSTOMERS ARE BANKED, MOST HAVE CREDIT CARDS, A LARGE PERCENTAGE HAVE MORTGAGES.  

She says:  “The Center for Responsible Lending notes that minority and female borrowers take out a disproportionately high number of payday loans, as do members of the military.”     MEMBERS OF THE MILITARY DO NOT HAVE ACCESS TO PAYDAY LOANS.  AS FOR WOMEN AND MINORITIES, THE PROFESSOR SEEMS TO BE IMPLYING THAT THEY ARE NOT CAPABLE OF MAKING GOOD FINANICAL CHOICES.   CLASSIC ELITIST CONDESCENSION. 

Professor Dessin, you need to learn to think for yourself, not take talking points from the Center for Responsible Lending.  

 

This Cincinnati Enquirer editorial demonstrates the shallowness and bias of some media.   The editoral writers just take their talking points from advocacy groups.   The Payday Pundit takes them to task:

The Enquirer:  The Senate should pass a strong reform, but it should also make sure the market can offer options for well-regulated, low-cost, short-term loans.

The Payday Pundit:  “The market,” in the form of banks, credit unions and other finanical institutions, have been trying to develop alternatives to payday loans for years.  The Enquirer believes the Ohio State Senate can wave a magic wand and come up with a short-term loan product that’s better? 

The Enquirer:  There’s a legitimate need for these loans, but not when the loan terms outstrip borrowers’ ability to repay.

The Payday Pundit:  How does an industry stay in business loaning money to people who can’t repay?

The Enquirer goes on the cite a bogus North Carolina study that purports to prove that consumers weren’t hurt when payday lenders left the state.  At least that’s what the news release on the study said, but when you examine the study itself, it tells horror stories of people not buying medications and missing other important payments.

The Cincinnati Enquirer editorial writers live in the same elitist bubble as the payday lending industry’s critics.  They are condescending, self-righteous, and philosophical (as opposed to knowledgeable). 

There’s probably more wisdom in the National Enquirer than the Cincinnati Enquirer. 

Let the Enquirer know your thoughts at .

Here is a complete text of a letter to the editor in today’s Cincinnati Enquirer:

PAYDAY LENDERS PROVIDE NEEDED SERVICE

The front-page headline “Bill would crimp payday lenders” (May 1) was wrong; it should have read “Bill would kill any option for payday loans for people who need them.” Our government representatives are again protecting us from us, by mandating how much interest can be charged for a payday loan.

As quoted in The Enquirer, “a lobbyist for Ohio Financial Service Centers Association said the 28 percent cap will put payday lenders out of business, eliminating 6,000 jobs.”

There are many people out there who need these services; people who have no other option for credit, but obviously need a loan. They are a higher risk simply because of their condition. Traditional credit facilities often won’t touch them. If the service is driven out of the state by this legislation, where will these people go when they need that help?

This legislation is a bad idea.

Chris McCormick, Amelia

In this Cincinnati Enquirer story, James Frauenberg of CheckSmart puts it in perspective:

“The profit margins in this industry are already thin,” said James Frauenberg, senior vice president of Dublin-based CheckSmart, during a meeting with the Enquirer’s editorial board. “I don’t see our landlords charging us less rent, the electric company charging us less for the lights and our employee health benefits are not going down.”

Also from the article:

Jamie Fulmer, a spokesman for Advance America, said payday lenders fill a void for tight households that need money for an unexpected expense.

“Banks used to offer customers a few hundred bucks to tide people over to the next paycheck, but they don’t do that anymore because they make more money in fee businesses,” he said.

The Payday Pundit will be posting more developments from Ohio later in the day.