This Columbus Dispatch story has more information than the Cleveland Plain Dealer story below.  Key passage:

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.  

The jobs of more than 6,000 Ohioans are on the line as the Ohio House passed a bill imposing a 28% annual rate cap on loans, essentially a $1.08 fee per $100 loaned.   Here is the Cleveland Plain Dealer story.  The bill now goes to the Senate where half the Senators are in support of a 36% rate cap.

As the idiom goes, don’t judge until you’ve walked in someone else’s shoes. The Wallet Pop blogger found himself walking in the shoes of a payday lending customer and, not surprisingly, his opinion of the business changed.

 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?

Watch Greg Fay and Charlie Drain, co-owners of Hometown Cash Advance, explain their business, their customers and their service. 

Wallet Pop’s newest post details the state of the industry today.

He notes that in Oregon, a 36% annual cap was put on the payday lending industry, and 80% of the stores closed up and went out of business.

Payday Pundit especially likes the first comment posted in response, “I enjoy seeing states tighten credit in the middle of a credit crisis – it reinforces my view that politicians have no clue what they’re doing.”

Update: thanks to a reader for pointing out that “In Oregon it’s a 36% annual rate cap plus a $10-per-$100-borrowed loan origination fee. If it was just a 36% annual cap, like they’re proposing in Ohio, 100% of the payday loan stores would have closed.”

In a new post, Payday Lending, Part I: if you have to do it, how to do it, Wallet Pop (a personal finance blog) discusses his experience in visting a payday lender and provides readers with information in case they find themselves in a similar situation.

Because this is titled “Part 1″, we’ll be sure to post “Part 2″ when we see it.

What’s All This Fussing About? has an interesting (if lengthy) diatribe against increasingly pervasive and arbitrary fees from banks and credit cards.  A taste:

Examing banks further; the fees we’re paying for accounts have nearly tripled in the past decade. Beyond the familiar maintenance fees and minimum balance fees, a NSF (nonsufficient funds) charge has reached $45, and bounced check fees now average $30.  ATM fees can be massive, and can be incurred from your own bank AND the ATM’s host bank.  Some ATM arrangements may charge you as much as a $10 fee for using an ATM more than three times a month. Fees for check “stop payment” are typically $25, and returned-deposit fees of up to $10 might accompany the many resulting bounced-check fees.  We have seen the institution of fees to talk to bank tellers face-to-face.  Cashier’s checks and money orders can now cost $10.  Payments by phone and copies of old checks can now incur significant fees. You may also see fees with some banks for the privilege of enjoying online banking services. And while you will probably be able to select a rush payment option for Bill paying, it can come at a price from $5-$15. Paying for retail purchases with a PIN card may incur additional fees.  Customers may be charged a $6 monthly fee for not having direct deposit. Wow. Be glad too, because there appears to be no cap for these fees, so maybe we should consider them low.

In addition to your significant overdraft fee (should you accidentally top your balance), you could see a cascade of these charges where you did not expect it.  That’s because banks are allowed to change the order in which the checks clear.  Read that sentence again, if you didn’t fully absorb it.  This could cause you to bounce numerous checks as opposed to one, in certain routine situations.

According to a new poll by Center for Consumer Freedom, only 10% of Ohioans say they would make loans at the 36% or 28% rate cap proposed by Ohio legislators.      From the news release:

When asked how much they would charge a complete stranger who wanted to borrow $100 for two weeks, just nine percent of respondents said $1.50 or less. Over 80% of respondents would still be unwilling to make the loan at $15 or less, the common rate for a payday loan of that size in Ohio.

Anyone wanting to learn more about the survey should contact Tim Miller,  Center for Consumer Freedom, at 202-463-7112 or .

According to this article, people are selling their possessions on Internet sites such as Craigslist just to make ends meet.  From the piece: 

At Craigslist, which has become a kind of online flea market for the world, the number of for-sale listings has soared 70 percent since last July. In March, the number of listings more than doubled to almost 15 million from the year-ago period.

Craigslist CEO Jeff Buckmaster acknowledged the increasing popularity of selling all sort of items on the Web, but said the rate of growth is “moving above the usual trend line.” He said he was amazed at the desperate tone in some ads.

I wonder if critics of the payday lending industry think this is a good idea.  

This is a big development.  As this article describes, the Fed is going to bar companies from raising interest rates on card holdings barring a default from the cardholder. 

Banks are also fending off federal legislation to crack down on credit card abuses.