Gov Strickland hears from “activist community”
May 28, 2008 | Uncategorized | Comments (3)Progress Ohio (the organization who lobbyied to ban payday lending in Ohio) is ”compiling comments from the activist community to share with Governor Strickland before the signing ceremony.”
We think Governor Strickland needs to hear from more than the “activist community” before the signing ceremony. He needs to hear from the hard-working people of Ohio who will be negatively impacted by the flawed legislation to ban payday lending.
Go to http://www.progressohio.org/page/s/StricklandSigns to send your comments.
Mises Economics Blog: Have the whims of the legislature trumped property rights?
May 28, 2008 | Uncategorized | Comments (0)
…The state legislature — a bunch of nanny do-gooders — recognized the seen: the closing of 1,600 payday stores and the loss of some 6,000 jobs. But these same folks missed the unseen: the tens or hundreds of millions of dollars invested in these businesses; with investment losses to be suffered by many unknown Ohioans.
Of course, these losses are bound to ripple through Ohio’s rust belt economy, creating unpredictable effects.
These types of state interventions in the market reduce future investment in capital. An investor has to consider the consumer, the market, and the state. Of those three, the state has become the most volatile, the greatest unkown.
Payday lending is gone in Ohio. Current and future Investors in the state will have to wonder if the whims of the legislature have finally trumped property rights in the Buckeye State, with the state willing and able to alter ownership and control of property with the stroke of a pen.
Is Ohio any different from the troubled countries to our south? I am no longer certain that it isn’t.
If you’ve got a few minutes, read the discussion below the post. Intellectual, thought-provoking.
What’s going on in Ohio?
May 28, 2008 | Uncategorized | Comments (1)Payday Pundit is receiving lots of questions from readers on the situation in Ohio. We know that Governor Strickland has the payday lending ban bill on his desk. And we know that his staff has publicly said he plans to sign it this week.
In case the Governor has realized the negative impact the legislation will have on the state or taken to heart the tens of thousands of pleas from customers and is second guessing the legislation…here are his options.
According to the Buckeye State Blog:
Neither the Ohio Constitution of 1802 or 1851 originally allowed the veto for the Governor. However, with a popular push in 1902 the power was adopted (and subsequently modified in 1912). There is no “pocket veto” similar to that of the federal executive powers. In Ohio, a governor can take a variation of one of three steps after being presented with a bill:
1. Sign the bill and file it with the Secretary of State turning the bill into State law.
2. Do nothing. Ten days after the bill has been presented to him, it becomes law as if he had signed it.
3. Veto the bill and return it to the legislative house it originated in with his written objections (if 3/5′s of the house of origin vote on the bill once again and approve it, it is sent to the other house where another 3/5′s approval overrides the Governor’s veto).
Carolina Politics on payday lending in SC
May 28, 2008 | Uncategorized | Comments (0)From the blog post:
The free market regulators tried to bring this back from the dead, but it sounds like Harrell has effectively killed it for good this time, as it should be. Payday lending is a legitimate service and is needed by people when they are in a financial bind. Sure, there are people who use it inappropriately and get caught up in debt because of it, but people do that with credit cards, loans, and every other kind of borrowing. Payday lending services are no different. Sure the interest rates are high, but people know what they are signing up for. Legislators need to stop demonizing these legitimate services and start promoting self responsibility.
The State’s Warren Bolton, Associate Editor and Lobbyist?
May 28, 2008 | industry critics, media coverage | Comments (0)Payday Pundit’s favorite payday lending foe has now written his 4,375th column on payday lending.
In this column, ”House members need to hear from payday lending opponents”, Mr. Bolton is straight-up lobbying. Is it appropriate for Mr. Bolton to use his position as Associate Editor to lobby South Carolina’s statehouse?
And what about the millions of people who are payday lending customers? Don’t House members need to hear from them? Shouldn’t their opinions actually matter the most since they are the ones who use the service?
Bolton’s statement that payday lending customers “don’t make good decisions or haven’t been taught to balance a budget” is utterly offensive.
You can reach Mr. Bolton at (803) 771-8631 or .
Reminder: The State Newspaper was recently accused of “unethical” behavior in aggressively soliciting payday lending ads.
SC Hotline has discovered that while The State’s newsroom and editorial board were both busy bashing the payday lending industry, the newspaper’s marketing department was using these attacks to try and convince the industry to advertise in the paper in an effort to counter its “distorted” information.
CNN Money on credit card fees
May 28, 2008 | alternatives | Comments (0)A few numbers from the article:
- Americans hold $850 billion in credit card debt.
- Average balance per card-holding household is $8,568
- Missing a payment (or paying the bill late) can result in a hefty late fee, ranging from $15 to $39.
- Going above your credit limit will result in an over-the-limit fee (up to $39).
Ohio’s “Center for Moral Clarity” on payday lending
May 27, 2008 | industry critics | Comments (1)On one hand, they encouraged the banning of payday lending in Ohio. On the other, they say, “It’s inarguable that there are consumers who can use the payday lending industry’s services responsibly, just are there are people who can take a drink now and then without descending into alcoholism.”
Using that logic, wouldn’t it make more sense to help those who use the product irresponsibly instead of banning it for all?
If you have a comment for the Center for Moral Clarity (headquartered in Columbus, OH), you can email them at .
“Web loans are becoming more widespread as local governments restrict payday loans”
May 27, 2008 | alternatives | Comments (2)…reports Washington DC’s NBC 4:
Now with tough economic times, many consumers are getting trapped by online web loans that can charge up to 2-thousand percent interest rates. The Consumer Federation of America reports that a typical internet web loan often costs $30-dollars for each $100 borrowed.
It cites an internet payday loan for $183, that carried a 573-percent interest rate, leaving the consumer with a $557 debt one-month later. What’s more, payment is electronically drafted from the borrower’s checking account which is usually drained dry. Consumer advocates say web loans are becoming more widespread as local governments restrict payday and car title loan storefronts.
As the industry has always said, eliminating storefront lending does nothing to address the demand for short-term credit (nobody denies the demand exists). Wouldn’t these customers be better off visiting a regulated, brick and mortar payday lender? What is the DC City Council (who voted to ban regulated, storefront payday lending last fall) going to do about this? Payday Pundit wishes them luck in trying to regulate offshore internet lenders who tend to be headquarterd in places like Costa Rica.
Reads the site of one offshore lender:
All aspects and transactions on this site, will be deemed to have taken place in our office in costa rica, regardless of where you may be viewing or accessing this site.
Payday Pundit wants to shout from the rooftops…
May 27, 2008 | alternatives | Comments (1)
Even credit unions and charities could not offer payday loans under annual percentage rate caps of 24%, 28% or 36%!!!!
Take, for example, the model, award-winning payday loan alternative being offered by GoodWill in partnership with Prospera Credit Union. From Michelle Singletary’s recent column:
For example, in Appleton, Wis., the Prospera Credit Union has teamed up with Goodwill Industries of North Central Wisconsin to create GoodMoney, where consumers can get short-term loans much cheaper than they can get from a payday lender.
GoodWill/Prospera charge $9.90 per $100 for the two-week loan. That’s a 252% APR. Yes, it is a few dollars cheaper than a traditional payday loan ($15 per $100), but they don’t have to pay taxes or make a profit. Makes sense they can charge a few dollars less. That said…an annual rate cap bans this “alternative” as well.
State legislative updates
May 27, 2008 | Uncategorized | Comments (0)Illinois- Lawmakers look at plan to fill payday loan loophole
South Carolina- House speaker prevents debate on payday lending
Ohio- Nothing new to report…just waiting to see if Gov Strickland vetos or signs the payday loan ban.
