We have a lot of customers that are going to have nowhere to go to get short-term loans,” she said. “If our legislature will look at other states that have (capped lending rates) … the people in that state are worse afterwards than they are before.”

The article also has comments from Ms. Lutz’s employee who is worried about her job and health benefits.  Are Ohio state senators listening?

“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.  

Some Ohioans might think the loss of the payday loan industry would be a good thing. But for residents who use the service, payday loans are the only way to, for example, pay for car repairs before their next paycheck arrives.

Legislators should protect consumers, but be wary of eliminating a crucial service — unless that is their goal.

Payday loans are intended to be repaid in a matter of a couple weeks. Maybe the bill could be amended to acknowledge that — and enable and encourage borrowers to retire the debt on time.

The Payday Pundit agrees.

“Our national debt is outrageous – $124,000 for a family of four – and consumer debt is at an all-time high – $8,300 per person,” said House Speaker Jon Husted, R-Kettering. “The bill we passed today helps to end the cycle of entrapment that has found Ohioans in circumstances they simply cannot escape.”

Payday loans are responsible for the national debt?  And the $8,300 debt per person he cites is about the amount of credit card debt every American has.  

After months of debate over bills that were backed by either the payday industry or consumer advocates, the proposal that passed the House 69-26 is a victory for the Ohio Coalition for Responsible Lending, which pushed to lower the current 391-percent annual interest rate on two-week payday loans.

The group got a bill even more restrictive than it requested. It sought a maximum 36 percent interest rate and got 28 percent. The coalition wanted to limit borrowers to six loans per year, but the bill imposes an even tougher four-loan limit.

A victory for an advocacy group, but a defeat for consumers, and a defeat for more than 6,000 workers who will lose their jobs if this bill becomes law.  

 He writes about it in his latest post

For years, I’ve lived by a couple rules. For instance, I never eat yellow snow, and I never step foot inside one of those payday lending establishments.

Like many Americans, I’ve never had a high opinion of payday lending loan establishments, but earlier this year, utterly broke, I finally broke down.

And what did he learn from his experience?

What I do know is that as lousy as the payday lending industry’s reputation is and as distasteful as their interest rates are, I was glad to have the option of going to a payday lending store when I needed one.

That, however, may not be the case much longer. Payday lending establishments are being put under the microscope by a lot of state governments lately, and there’s a lot of talk of trying to regulate them out of existence.

Once upon a time, I would have said, “Good riddance, get rid of them, all of them.”

And yet — I’m finding myself rethinking all of this and wondering if perhaps the credit card industry and banking industry should be examined more thoroughly first, since those are generally the first places where Americans tend to get into financial trouble. After all, a lot of people use payday loan stores, and it’s likely happening now more than ever. Nationwide, in fact, Americans pay about $5 billion a year to borrow more than $40 billion from payday lenders. So if payday lenders are run out of town, what will happen to people who feel like these places are their last options?