Payday lenders in Ohio are facing a bleak future.  Tax paying businesses shuttered, leases broken, employees laid off.  It’s scary how quickly the government can take one’s livelyhood away.

Payday lenders employ more than 6,000 in Ohio in 1,600 storefront locations. Two major national payday lending companies are headquartered in Ohio, including Dublin-based Checksmart and Mason-based Check ‘n Go. 

• Close 1600 storefront locations
• Eliminate more than 6,000 jobs 
• Lose $172.6 million annually in employee payroll, benefits & payroll taxes 
• Vacate 4.8 million square feet of office space  
• Lose $76.8 million annually in rent revenue to landlords across the state
• Lose $23 million annually in revenue to advertising vendors

The report from staff researchers at the Federal Reserve Bank of New York is continuing to pick up steam. 

As states look at consumer credit issues it’s important that they look at the facts and carefully examine the real impacts of legislation.    The Federal Reserve staff study does just that and finds that one of the unintended effects of such legislation, which we see in states like Georgia and North Carolina, are increased credit problems for consumers.

To ignore what is already happening to individuals in states without payday lending and to continue on an assault on an industry which provides a better option for many in a short-term credit crunch is foolish and damaging to consumers.  Legislating payday loans into fee structures which are impossible to operate under extinguishes consumer choice.  We already see that individuals are forced to turn to more costly credit options when payday loans aren’t available.

The Open Markets Blog of the Competitive Enterprise Institute took note of this and posts on the report.  Kudos for highlighting this important piece of research.