“We are the nobody specials, yet we are the backbone of this so-called great county”
May 29, 2008 | employees | Comments (6)This letter, published today in Ohio’s Marion Star, speaks for itself.
Dear Editor:
I am nobody special, just a small voice in a world of many. I travel 40 miles a day to and from work because the economy in my town is very repressed. I, among thousands of others, have had to choose between food and gas for work, while our elderly choose between medicine and food. Our bills need paid also: housing, utilities and transportation. There are times in our lives when disaster strikes. It could be the death of a partner, getting sick when you don’t have healthcare, car repairs, getting hurt at work. I was one that got hurt at work 4 years ago and I have been paying for it ever since. I worked at a youth prison and went to the aid of one of my fellow officers. I received 13 stitches above my left eye and a brain concussion. That was nothing compared to the fear, anxiety, nightmares and helplessness that I have suffered since that dreadful day.
The worst part of it – my finances. The two credit cards that I could not pay quadrupled. My credit went down the tubes and I cannot even get a loan for a candy bar. Why are there not any regulations safeguarding us against the banks who give us the credit cards? Why are their rates and collection costs not being capped or regulated? Could it possibly be that the government makes money off of these banks and nothing off of the payday loan companies? Well, my customers and I have thought of it, but who are we? We are the middle class. The go-to-work-and-live week-by-week people. We do not have stock in the oil companies or the banks. Our jobs are going overseas, our monies are being taxed and retaxed, the freedoms are fewer and fewer. The hope is low and it seems the end is near.
We are the nobody specials, yet we are the backbone of this so-called great county. Our fathers, brothers and grandfathers have died for our freedoms that our forefathers said we would always have. Living as extended families once again is now a necessity.
Who am I? I am the one that now has to turn people away. Whether they need me once a year or twice a month, they are grateful that I am there for them. Now we cry together and console each other. When will the government start helping us instead of hurting us? Where have all our freedoms gone? I am the payday loan company. I am the voice of many. Is anyone out there listening?
Karen Miller
Marion
Voices from Utah
May 29, 2008 | industry | Comments (0)This letter to the editor appeared in the Deseret News over the weekend.
Every year millions of Americans responsibly use payday loans to help solve short-term credit needs. Customers look at their options and make a reasonable choice. They tell us that they use payday loans to avoid other fees. They choose between bouncing a check or overdraft protection, incurring late fees on routine bill payments, borrowing from friends, family or church, taking out a cash advance on a credit card or taking out a payday loan. All of these products have a cost associated with them. Payday loans can be a less costly, desirable option.
Restricting access to payday loans and other financial products through licensing laws or zoning laws stifles competition. Consumers benefit most when they can easily choose from many different financial products.
Payday loans do serve a need, the ability for someone to obtain quick cash should an emergency arise such as an auto breakdown. The problem is, of course, the high interest rate.
Loans of this nature should be available, however government-controlled, to prevent excessive interest charges and abuse by both parties.
Ed Forbes
Hendersonville 37075
The Payday Pundit wholeheartedly agrees with Mr. Forbe’s sentiments.
Simon Barrett taking a look at South Carolina
May 29, 2008 | Uncategorized | Comments (0)Simon Barrett of the Blogger News Network is taking at look at legislative wrangling on payday loans in South Carolina. Barrett has been covering the issue in Ohio.
As a writer I occasionally have the (dis)pleasure to have to enter into their sleazy world. The latest ‘toe-dip’ involves the subject of Payday Loans, a subject that our elected ‘experts’ have deemed a wicked industry in Ohio. It mattered not that some 30,000 letters were sent to them from consumers, nor that 6,000 jobs would be lost. Our elected ‘intelligentsia’ decided to ignore the voters, and just do what they wanted. Of course there will be a come back, and that likely will happen in the next election. (here is a hint to anyone running in Ohio, tell the people you will bring back Payday Loans and you will be a shoe in!)
The battleground has now moved into South Carolina. Last weekend I contacted South Carolina Senator Joel Lourie asking if he would be interested in an interview. “Sure Thing” the senator told me. Of course it was not as easy as that, the following day I received an email from Senator Lourie’s chief flunky asking me who I was and what I wanted. Being the nice guy that I am, I explained that I wished to interview the esteemed senator. No doubt the chief flunky Googled me and didn’t care for the articles that I had written.
Gov Strickland appears on radio program
May 29, 2008 | Uncategorized | Comments (5)Thanks to reader Johnny for the heads up…
Gov Strickland appeared on a radio program yesterday and said that he was waiting for the payday lending ban bill to come to him, then he would sign it. He then said that he “heard” that the industry was unwilling to work with the state on resolving this.
This is not true. In fact, payday lenders tried to work with not only Ohio’s House and Senate, but also the Governor’s office to come up with a regulatory framework that would both protect consumers and allow the industry to stay in business. All of the requests were ignored. Instead of working on legislation that would actually help consumers, Ohio’s legislators chose to ban an entire industry.
In a letter to Gov Strickland dated May 19, CFSA president D. Lynn DeVault again requested the industry’s participation in true lending reform.
We implore you to veto HB 545 and allow CFSA to work with the legislature in designing and implementing real, effective solutions regarding payday loans. We are asking for a regulatory framework that allows reputable lenders to stay in the market and offer a state-regulated service to consumers who have exhibited a compelling demand for this credit product.
If given the chance, CFSA will be steadfast in our commitment to work with Ohio policymakers and stakeholders to achieve state regulation that reforms the status quo and benefits consumers.
Unfortunatly, Governor Strickland, payday lenders were not given the chance.
What has an APR of 20,000% and is now being attacked by CRL?
May 29, 2008 | alternatives, industry critics | Comments (1)The Center for Responsible Lending is taking aim at a foe that is not payday loans. This one has a purported APR of 20,000 percent. Can you guess?
A: Bank fees.
From the Southern Illinoisan:
Banks have changed their tactics. Whereas they used to disallow checks to clear when account funds were insufficient, they now allow debit card charges, but add a “courtesy overdraft” fee for the service. You get your Snickers or Big Mac when your account is empty; but it will cost you.This overdraft is a type of short-term loan that often figures to 20,000 percent APR.
According to a recent survey, consumers would prefer to be declined when using their debit card rather than be hit with an overdraft fee. This preference occurs regardless of the purchase price.The results of the survey, conducted by The Center for Responsible Lending, were released in mid-April.
Banks often tout their overdraft protection services as protecting consumers from an embarrassing decline of credit. I would much rather be embarrassed than hit with a huge fee. The majority of survey respondents agree. Review your bank account’s overdraft protection features to find the best option for your situation.
The Arizona Daily Star misses the point
May 29, 2008 | media coverage | Comments (0)In an editorial opposing the Arizona initiative, the Arizona Daily Star fails to understand the entire point…consumers want (and deserve) to have a variety of choices when it comes to credit. If asked, consumers will tell you that they are best off if they have all of the information about different credit products and left to make the decision about what’s best for them. It does not help anyone to limit choices.
Arizonians do have alternatives when they face unexpected or unbudgeted expenses between paychecks. They can take out cash advances on credit cards, they can see what products are offered by their bank or credit union (all payday lending customers have checking accounts), they can pawn a personal item, borrow from friends/family/church. Or they can bounce a check, pay a bill late or not pay a bill at all. Or they can take out a payday advance.
If the Arizona Daily Star is really looking out for the hard-working people of Arizona, they would be encouraging more lenders to enter the market or providing financial education to their readers. Advocating for taking away credit options helps no one.
Their point that the money spent on fees “would have benefited the state more had it been spent on clothing, food and household items instead of going to payday lenders,” just proves they have not taken the time to speak to the hundreds of thousands of customers who have used payday advances in Arizona to gain any understand of why they use payday advances.
Banks better at hiding fees
May 29, 2008 | industry | Comments (0)This letter to the editor comes from the Deseret News (Utah) in response to local coverage of payday lending regulation. It highlights how payday loans can be the best option for consumers who find themselves in an unexpected financial crunch.
I am not a patron of payday lenders and hope I never have to use their services. However, I think that banks and credit unions often charge the same or worse for similar services, except they have a better way of hiding the fees. I was late on a car payment several times to a credit union. I had been a faithful and loyal customer for many years. Yet, I came home one day to find my car had been towed. After paying the fines, towing fees and interest charges, I was out over $1,000. It seems like a payday loan would have been cheaper for me than what the credit union charged to finally release my car. I have also paid outrageous fees on overdraft charges to my bank several times.
What do Ohioans think about payday loans?
May 29, 2008 | Uncategorized | Comments (0)The Forest Hills Journal posted these reader responses on payday loan legislation in Ohio:
Pay day loans are a really stupid idea, but so is smoking, drinking, gambling, etc. If people want that service and are willing to pay for it, I don’t know why government needs to get involved. There are always unintended consequences to laws like this. Will some of these desperate people turn to shoplifting, burglary, or robbery? I’m certain that some will. With the difficult times we are going through right now, I can’t think of a worse time to do this. The new rates are not high enough to compensate the companies for their risk and most will probably close. The bottom line? Thousands of more people will be out of work and tens of thousands of people with nowhere to turn when ‘their money runs out before then month does.’
Yes. Regulations are needed, as the interest rates charged by these companies quickly add up to crushing debt. Desperate people go there, as they have no alternative source for a loan, but unless they can pay off the loan within the week, find they have just added to their financial woes. But – it is important to note that these companies do provide a service that traditional lending institutions do not, and for some people a brief ‘bridge loan’ is a lifesaver, and even with the higher fee, still less costly than borrowing against a credit card or being overdrawn on a checking account. Ideally, some middle ground can be found, where payday lenders can still offer their services, but at a more reasonable rate that won’t financially cripple the people they purport to serve.
Chicago Daily Observer: Bashing Business 101
May 28, 2008 | industry | Comments (0)Interesting piece by John Tillman of the Illinois Policy Institute on vilifying business…
With oil topping $130 a barrel, pump prices over $4.00 a gallon a nd the media promoting—er, reporting on—the slowing economy, oil companies aren’t the only ones taking abuse from pundits, policymakers and politicians. Businesses all over America are really taking it on the chin.
This must stop. Vilifying business is a terrible trend in American cultural and political discourse. And while I have come to expect it from the Democrats, the Republicans aren’t immune either, including the putative presidential nominee.
Payday Loans: The Racist Rhetoric of Thomas Suddes
May 28, 2008 | industry critics | Comments (0)Writes Matthew Mayer:
We won’t rehash the payday loan argument here. Intelligent people understand there is a place for them when provided, and used, responsibly. Yet one of most vile tactics used by opponents of payday lending, as well as the newspaper editorialists who conspire with them, are bogus claims that the African-American community believes payday loans exploit them.
Mayer concludes:
The Plain-Dealer and Ohio University should immediately review Mr. Suddes’ qualifications as reporter and instructor and act accordingly – fire him.
