Monday, August 18, 2008

The Raw Story: Ohio battles over payday loan interest rate cap

by Nick Langewis

Ohio, having dealt a blow to its payday loan industry by enacting a usury law, is teeming with charges of deceit in a petition drive to reverse the law.

HB 545 was signed in June by Governor Ted Strickland, and will go into effect in early September. Under the law, the APR for a payday loan will be capped at 28%, and an Ohioan would be limited to four loans per year.


Interesting, it seems that petition gatherers are using some of the same tactics that PCE used last year during last year's voucher battle.

"Petitions to reverse HB 545 are currently circulating. An Ohio Public Radio program airing August 12 exposed signature collectors who were incorrectly representing the petition as one that would lower the interest rate cap further. Residents of a Butler County homeless shelter also alleged that they were offered money for their signatures.

Payday loans are a debt trap, charges advocacy organization END 391, which notes that 90% of revenues from payday loans are from repeat borrowers, and about 50% of repeat loans are initiated on the same day a previous loan is paid off. Americans spend $4.2 billion in payday lending fees per year."

Birds of a feather flock together!


VOTE YES ON ISSUE 5! said...

This is part of a larger pattern on behalf of the payday lobby to dupe Ohio voters into accepting 391% interest. They are spending millions on misleading advertisements and millions misleading voters when collecting signature petitions.

We need to stop predatory payday lending in Ohio! Vote yes on Issue 5!!!

Anonymous said...

You guys shouldn't waste your breath. This is just a new industry that Democrats can demonize in order to score some cheap votes.

They don't seem to care about jobs and economy, as long as they get votes. Who cares if this is an industry that saved hard working people tons of money, and then pays tax and employs citizens. It means nothing to them if they can achieve power.

Rob said...

Let's get something straight.

Nobody wants to get rid of Payday lenders absolutely, and this really isn't a partisan issue(except maybe here in Utah).

In Ohio it was a Republican legislator that went after Payday lenders.

Funny, mess with a companies ability to commit usury and it's just a bunch of Democrats demonizing those poor Payday lenders.

I go after issues because I believe in them. I became involved in Utah politics because I saw some problems and I wanted to help find the answers.

It has never been about cheap votes (which don't seem to be too cheap if you look at home much Payday lenders have spent on elections here in Utah). For me, it has always been about standing up for others and doing what was right.

BTW, anyone who leaves fake Payday lender stories that link to websites will find their comment deleted. Advertise your 500%
interest traps somewhere else.

John said...

Good post, Rob! The payday lending legislation in Ohio was developed in a truly bipartisan fashion and is good for Ohio consumers. However, the payday lobby isn't going down without a fight! Here's some more evidence of payday lenders misleading Ohio voters:

We need to end predatory payday lending in Ohio and stop the payday lobby from hijacking the November election! Vote Yes on Issue 5!

PaydayLendingRep said...

Capping payday lending at 28 or 36% would drive lenders out of the state. If a stranger walked up to you on the street and asked to borrow $100 for two weeks, what do you think would be fair compensation for that service? $1.36? $15? $17? Most payday lenders charge $15-$17 per $100 loaned to absolute strangers. With a 28 -36% rate cap payday lenders would not be able to stay in business, they would not be able to pay their rent, employees, health insurance or taxes. Ohio is beginning to see what a trickle down effect putting some 6,000 people out of well paying jobs has done and breaking leases of hundreds of payday lending stores.

Payday lending is a necessary service and consumers will move to more dangerous internet and title lenders if they are unable to secure a safe payday loan from a reputable store.