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Voters to consider payday loan industry with Issue 5
Bob Carroll
Issue date: 10/31/08 Section: Front Page
"Payday lending is simply a pattern of predatory lending that hurts so many Ohioans," said Ohio Treasurer Richard Cordray. "It involves so many negatives that build up on a lender and makes it more difficult to leave the cycle. Issue 5 cleans up a mistake that was made in 1995."
Cordray is referring to Ohio legislation passed in 1995, which said that because two-week payday loans are used for the occasional emergency, they should be exempted from any Ohio loan laws.
According to www.yesonissue5.com, lenders have traditionally argued that rates needed to be higher because it was just a two-week loan. With the state-granted exemption the APR was able to rise to the current 391 percentage rate.
However, those asking Ohio voters to vote "no" point out on their Web site, www.rejecthb545.org, that if Issue 5 is passed, the payday loan industry in Ohio will come to an end. According to the Web site, 6,000 jobs would be lost and the Ohio economy would lose $272.2 million from the small loan industry.
Acker was quick to point out what she believes to be another side of the issue.
"It's an industry-driven referendum with our $220,000 in advertising versus their $20 million," Acker said. "However, our early polling shows voters have said "yes" on issue 5 by a ratio of almost 2 to 1."
Rep. Brinkman, an opponent to issue 5, firmly believed Ohio voters will vote down the issue.
"All of us should be against it," Brinkman said. "Ohioans need to know what this bill will do, and I predict the vote is going to be no."
Cordray is referring to Ohio legislation passed in 1995, which said that because two-week payday loans are used for the occasional emergency, they should be exempted from any Ohio loan laws.
According to www.yesonissue5.com, lenders have traditionally argued that rates needed to be higher because it was just a two-week loan. With the state-granted exemption the APR was able to rise to the current 391 percentage rate.
However, those asking Ohio voters to vote "no" point out on their Web site, www.rejecthb545.org, that if Issue 5 is passed, the payday loan industry in Ohio will come to an end. According to the Web site, 6,000 jobs would be lost and the Ohio economy would lose $272.2 million from the small loan industry.
Acker was quick to point out what she believes to be another side of the issue.
"It's an industry-driven referendum with our $220,000 in advertising versus their $20 million," Acker said. "However, our early polling shows voters have said "yes" on issue 5 by a ratio of almost 2 to 1."
Rep. Brinkman, an opponent to issue 5, firmly believed Ohio voters will vote down the issue.
"All of us should be against it," Brinkman said. "Ohioans need to know what this bill will do, and I predict the vote is going to be no."
Viewing Comments 1 - 9 of 10
Casey
posted 10/31/08 @ 9:32 AM EST
Forget if you agree with pday loans or not- FOCUS on the fact that the Ohio General Assembly thinks they have the right to control what financial products are available to the citizens of Ohio. (Continued…)
Craig Johnson
posted 10/31/08 @ 11:25 AM EST
Mr. Carroll incorrectly states that "a $300 loan would have a two-week charge of around $18." An annual interest charge of 28% is only $84. Thus a two-week loan (during any of the 26 pay periods in a year) would be only $3. (Continued…)
7000
Martin
posted 10/31/08 @ 11:36 AM EST
Casey, I guess you were a big proponent of deregulation on bank lending? Look how that turned out. All of your tax dollars went to bail out a bunch of reckless companies that speculated and got greedy in the Real Estate market. (Continued…)
Payday Loan
posted 10/31/08 @ 12:25 PM EST
I understand that there are some payday lenders that take advantage of people. I also understand that some people take too much advantage of the payday lender. (Continued…)
Tara-VOTE NO ON ISSUE 5
posted 10/31/08 @ 3:39 PM EST
Martin,
There are laws on APR about credit cards but not on the APR charged on fees, for instance
What is the APR if I was charged a late fee of $34 bucks on a $15 dollar payment for a balance of $50 bucks? HMMM-its OUTRAGEOUS. (Continued…)
Bobby
posted 11/01/08 @ 11:37 PM EST
COAST is an "organization" with only 6 members. An "astro-turf" group set up to advocate on behalf of corporate entities like the predatory payday lending industry. (Continued…)
Stu
posted 11/02/08 @ 12:26 PM EST
You Have to have an enormous interest rate when your dealing with deadbeats...and i would be...the majority of these folks are or they wouldn't pay the enormous rates if they had any alternative,that they didn'r already burn and stiff. (Continued…)
cash advance
posted 11/04/08 @ 10:40 PM EST
I don't know what the big deal is about getting a payday loan. I got one last year, paid it off in two weeks and the fees were less than if I had missed my credit card payment. (Continued…)
Patrick
posted 11/06/08 @ 1:07 PM EST
Great Article Bob!
Sincerely,
Your cousin
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