Customers say that they appreciate having access to short-term loans and the flexibility those loans afford them to manage debt in a way that works best for them. Denise, a customer from Dayton, attested to this recently, saying: “I can borrow the money I need, which keeps me current on my bills, and because of [short-term loans], I have never been late on payments of bills, which also keeps my credit in good standing. We are all adults, and we know what we’re doing.”

Glenda, a customer from Columbus, added, “I use it rarely, but I appreciate the fact that it is available when I do need it for something that comes up unexpectedly.”

The industry is fighting to preserve financial choice for its customers.   The whole thing is a great read.

The payday issue lingers because, although the legislature created a lending license with a 28 percent cap, the rate was more restrictive than on other licenses already in law. That all but guaranteed that no payday lender would use the new license; they switched to other licenses that allow for origination fees.

Some lenders also turned out to be more creative than lawmakers expected, issuing checks instead of cash, and then charging fees to cash those checks.

Yea, you wouldn’t want business to be creative, inventing new services, meeting the needs of consumers.   It’s not  like we’re living in America.  Oh, wait, Ohio IS still part of America.

Rep. Matt Lundy, D-Elyria, said he hopes to introduce a bill next week that would limit any loan of $1,000 or less with a term of less than 90 days to a maximum 28 percent annual interest rate.

That means no origination fees, credit-check fees, or check-cashing fees — just a straight 28-percent rate, Lundy said.

“We want to make sure all the doors are closed and all the windows are locked shut, and it’s taken a lot of time,” Lundy said. “It’s unfortunate that you have to play cat and mouse, but that’s the position they’ve put us in.”

If his bill is passed, Ohioans should call Matt Lundy when they need access to short-term credit.

If legislators want to stop the practice, “it’s probably something that needs to be done legislatively, due to the fact that they are operating under licenses set in statute,” Ernie Davis, the commerce department’s legislative director, told the House Consumer Affairs Committee.

Operating under licenses set in statute.   How evil!

Some state lawmakers plan another run at payday lenders because stores are operating much the same as they did before the legislature approved tough regulations last year.

 

After weeks of legislative debate on what became the new law and a failed attempt in November by the payday industry to overturn the measure, payday lenders continue making loans, often at virtually the same rates as under the old law.

The new law limits short-term loans to 28 percent interest and a maximum 31-day term. But payday lenders skirt the law by offering loans and charging fees under a different section of law known as the Small Loan Act.

The demand for short-term credit is greater than ever.  Why would legislators consider curtailing this credit in this economy?

“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.

….The Dispatch recommends a yes vote on State Issue 5 to allow Section 3 of Substitute House Bill 545 to go into effect. A yes vote will set a $500 maximum on loans provided by short-term lenders, including payday lenders; will cap the annual interest rate on such loans at 28 percent; and will require lenders to allow borrowers at least 31 days to repay a loan.

It’s hardly worth commenting on.  Once a paper takes and editorial position, it’s nearly impossible to get them to change.  In any case, this is going to be a close vote.

Strickland said this week that someone brought him a voters guide that was passed out in churches over the weekend. The card, produced by the Christian Alliance, urges a “no” vote on Issue 5, the position advocated by Ohio payday lenders.

“Quite frankly, I think the fact that the Christian Alliance has taken the positions it’s taken with these payday lenders is reprehensible,” Strickland said. “I don’t know what that issue has to do with the Christian faith except I believe those who are fighting the payday lenders are trying to protect vulnerable people.”

Oh, Jesus.   Is Strickland so sanctimonious that he can’t simply debate the issue without disparaging the character and morals of people on the other side?