The Pundit will leave the overall subject of John Hughes point in this op-ed up to debate.  What I’m sure of is that his inclusion of payday loans is misguided and his understanding of them is minimal.  Payday loans aren’t offered to live beyond one’s means; payday loan customers use them to meet unexpected needs and in emergency situations.

Hughes also characterizes the rates as “impossible” ($15 on $100 for 2 weeks on an unsecured loan is “impossible?”) and the customers as “unsophisticated.”  Once again we see the paternalistic lack of respect towards and stereotyping of people whose choices the writer doesn’t understand.  I wonder how often Mr. Hughes pays over 1000% APR on an overdraft fee.

From an AP story…Too bad policymakers in Ohio didn’t listen to the folks who use payday loans…

Michael Evans, 61, of Cincinnati, hopes the lenders won’t pack up and leave.

Evans, who voted against the rate cap, said payday loans have helped him through some tough times.

“These loans have let me keep some money in my pocket between paychecks when I’m running low,” said Evans. “I would be hurting if they close.”

Where were they the last few weeks?  

A woman looking for money to cover her prescription drug costs. Another man desperate for help to keep up with some medical bills. These are the stories that came to mind when the employees of the Massillon payday loan companies learned about legislation that was passed Wednesday by the Ohio Senate.

Read more from this story in the Massilon Independent.

That would be Martha Linton, who has a terrific guest opinion piece today in the State Newspaper of South Carolina.  From the piece:

Several years ago, unforeseen family responsibilities sometimes required me to spend more money than I had at that moment. The banks would not tailor a small loan to meet my immediate need. I found out the hard way that credit cards and other “easy loan” offers are rip-offs with high interest rates and extra fees.

So I started doing business with payday lenders, by borrowing what I needed to get me to the next payday, a situation I never dreamed I would face.

I did not borrow more than I needed, and I always paid back the money. The transaction was simple and the terms understandable.

Thankfully, the responsibilities that required me to get short-term loans have passed, and I no longer am a regular customer, though I recently had to take out another loan, and I reserve the right to do so again if I choose.

The Payday Pundit doesn’t understand why lawmakers listen to out-of-touch fringe groups instead of hardworking, smart citizens like Martha Linton.  

This letter in the Zanesville Time Recorder sums up the situation in Ohio nicely. (Note how the paper put a snarky headline on this letter.  They just can’t help showing their bias, we guess) From the letter:

People trust us to help them. What will they do when they have no one to turn to? Just bounce check after check?

Ohio payday lending employees are not just fighting for their jobs; they’re fighing for their customers’ rights.

The story by Brian Duffy of 19 Action News, includes an interview with a Check n Go employee and an  appreciative customer. The visuals include close ups of the large poster-size displays of fees that are found in all CFSA member-company stores as well as images of the 3,000 employees that rallied for their jobs in Columbus on Tuesday. Job well done by WOIO.

Watch the coverage 

It’s great to see payday lending workers fighting for their jobs and discussing the people they help.  This article captures this great quote.

There are people we help if they use it responsibly,” said Mary Myers, of Heartland Cash Advance. “I’ve had people come in needing $100 for medicine and walk out the door praising us saying they don’t know what they would have done without us.”

The bloggers network has been having a debate about payday lending.  This post by an Ohioan blogger, Simon Barrett, is a must read.  Here is the conclusion:

There are also arguments that without this avenue of emergency lending people will be forced to seek more riskier methods to obtain money. The vast majority of the Payday loan customers to not have other avenues of credit to pursue. Much is written about the plight of the working poor and the tightrope they walk, one paycheck away from homelessness, this legislation could well be the straw that breaks the camels back for some low income families.

The Payday Pundit received this email tonight.

I have worked for a payday loan company for 5 years, and we are definitely a help to our community. Our customers are from varied walks of life: retired, some on social security income, unemployed, people who make over$50,000 a year, people who live paycheck to paycheck (who doesn’t?). There are some who depend on us regularly and some who come in just when something unexpected comes up. Our customers will be in a bad situation if we close our doors. They sign the contract and agree to their (usually 2 week, not a YEAR) FEE. Everything is upfront and they are aware of exactly what they are signing. They are not helped by their banks or have gotten in trouble with their banks and high interest credit cards. They don’t want to ask their families for help.

We need to charge the appropriate fee in order to pay for our labor, rent, utilities, etc. as any business does. We also provide many other services besides payday loans although this is our main service.

Payday lending is a service that is very needed, if not, why would there be so many of us and so many customers?

We also support many good causes such as the Susan G Koman Breast Cancer Foundation, Juvenile Diabetes Research Fund (JDRF) and currently the Big Brother/ Big Sister Foundation.