“While there are some people who wanted to see us ban this industry or regulate it out of existence, clearly there is a demand from consumers for this particular service.”

Ah, such rationality and respect–it’s a breath of fresh air.

These former CSA’s allege that they were told to push people to take out more credit than they needed and rushed through the details.

CFSA member companies are required to post in large print and explain to customers the terms of each loan they make.  Why aren’t credit card companies held to more stringent measures?  Afterall, credit history is becoming more and more important in the US.

If your credit is poor and you can’t get a credit card and you rely on debit you can quickly get into trouble

Today, most banks will approve even the smallest debit card purchase — then hit you with a fee of $35 or more.

Yet we don’t hear howling about that kind of predatory lending….

There are no fees to participate in the BankPlus program, but a credit check is required, and the credit score affects the loan amount for which a customer is approved. Customers also must complete a financial literacy program before they receive the loan and they receive credit counseling once they are approved

One reason people take out payday loans is because there is no credit check required.  Imagine if you’re a busy person and need money today, something tells me you won’t have time to receive credit counseling before you need the money.

Allred said potential borrowers are told twice the interest rate that they will pay, even when it’s 521 percent.

Payday lenders are extremely clear about what taking out a loan will cost.  They have to be, in many states what they tell borrowers is regulated and must be extremely clear.  For CFSA member companies, according to CFSA’s Best Practices lenders need to show borrowers in writing and on big posters in their stores exactly what the terms are.  Matter of fact, studies CFSA has conducted tells us that consumers choose payday loans because it is very clear.

To recap:

Lenders are up front about the terms of the loan.

Borrowers understand what the loan will cost them.

Borrowers still choose to take out the loan.

Anti-payday lending groups are confused, demand that payday loans be banned because borrowers don’t understand the terms of the loan.

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.

Ohioans For Financial Freedom

To Keep Jobs and Consumer Choice

COLUMBUS, OH – The Board of Directors of the Ohio Chamber of Commerce has given its support to Ohioans For Financial Freedom saying imposing overbroad government regulations is not the way to revitalize Ohio’s economy.

“The Ohio Chamber champions free enterprise and economic competitiveness and we believe HB 545, as passed by the Ohio General Assembly, runs counter to our mission”, said Andrew E. Doehrel, president and CEO of the Ohio Chamber of Commerce.  “This new law, if not reined in by Ohio voters, will drive an entire industry and 6,000 good-paying jobs out of our state.”

If HB 545 goes into effect it means the loss of nearly $300 million to Ohio’s economy including $172.6 million in annual employee payroll, benefits and payroll taxes, $76.8 million lost in rent revenue to landlords across the state, and $23 million lost in advertising vendors. In response to this legislation, most of the major payday lending companies have announced they will close stores in Ohio putting as many as 6,000 jobs with benefits in jeopardy.

“As we strive to turn around our economy we must allow the free market to meet consumer demands and facilitate the creation of much needed jobs”, said Doehrel.

With 1,600 stores in the state, consumer demand for short-term credit is clear. Payday advance fills a need not met by traditional financial institutions and is a convenient, less costly option for short-term, unsecured credit.  Removing access to reasonably-regulated storefront payday lending will force consumers into more expensive, and possibly even less-desirable, alternatives. 

Ohioans For Financial Freedom is working to repeal section (3) of HB 545 offering consumers more lending options.

Founded in 1893, the Ohio Chamber of Commerce is Ohio’s largest statewide business advocacy group. The Chamber works to promote and protect the interests of its members – large and small – while building a more favorable Ohio business climate.