Ohio House Bill 545 « Idea Treks…The Journey of a Thought

Posted by: Craig | May 1, 2008

Ohio House Bill 545

I laughed when I saw this sign on North Reynolds Rd. in Toledo this evening. An article in the Dayton Business Journal states that Ohio House Bill 545:

would cap annual percentage rates on payday loans at 28 percent, extend the repayment period to 31 days from 14 days and cut the maximum loan amount to $500 from $800. Representatives of the state’s 1,638 payday lending shops have said the House measures would kill the industry, particularly with the percentage rate caps. Payday lenders can charge up to $15 per $100 loaned over a 14-day period, which converts to an annualized 391 percent. Instituting a rate ceiling at a fraction of the current maximum, as H.B. 545 and two other bills have proposed, would cap fees at a few dollars per $100.

I wasn’t surprised to see this Cashland branch is opposed to House Bill 545 because they stand to lose significant profits. However, just who are they attempting to appeal to with this sign? I hope it’s not regular people that use these payday loan businesses. It would be pretty difficult to find a consumer that would side with the payday loan business if the benefits of the bill were fully explained to them.

The objections of the payday loan industry basically state that this bill will cause many of these businesses to close thereby putting 6,000-7,000 Ohioans out of work. That and:

“It does nothing but drive an already regulated business out of business,” Lisa Ferguson, spokeswoman for CheckSmart Financial Co., which has 90 payday lending shops in the state said. “This choice for thousands of Ohioans will be gone and it will push consumers to unregulated means of borrowing.”

Umm, sure, I guess that’s true, but it seems that the pros outweigh the cons in this instance. The biggest pitfall of doing business with one of these payday loan places, besides the exorbitant interest rates charged, is that if the person doesn’t have the money now, are they really going to have it in 14 days when the loan is due? Usually the consumer isn’t in any better monetary position at that point and what starts is a viscious cycle of going to another payday loan place to get money to pay off the first loan they took out.

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Responses

This was just too funny, not more than a half hour ago I was driving down the road and saw the same sign! Now not knowing what the bill was all about I came home and Googled it…low and behold there was your blog with a photo of the same sign.

After being on the Internet since before ther were browsers..yes back in the days of ARCHIE, GOES, and WAIS, I still am amazed at the speed of the Internet in getting information out.

Personally I am voting to harpoon the loan sharks, and voting yes on bill 545.

Thanks, Mike - Toledo, Ohio

BTW, nice WordPress Theme

By: Mike Maxson on May 3, 2008
at 9:06 pm

Im sorry but the cons of this bill surely out weigh the pros. The unemployment rate will go up. These employes will have to look to the government for assistance in the form of wages and insurance. I understand how these places look evil but where are other people suppose to turn? If it comes down to not being able to eat, pay to keep your lights on, or buy medication i would surely be there. If you want to look to an evil money robber you should look to credit cards. That is a trap that is nearly impossbile to get out of. Miss one payment and they will hound you for the rest of your life. Plus you accrue late fees and interest on top of this. Fifteen dollars for a one hundred dollar loan isn’t that bad. Its short term and it surely beats getting into huge credit card debt or not being able to provide for your family.

By: jessica miller on May 5, 2008
at 11:59 am

Jessica, to quote you:
“Fifteen dollars for a one hundred dollar loan isn’t that bad. Its short term and it surely beats getting into huge credit card debt or not being able to provide for your family.”

I agree that it “sounds” good. But, why do you suppose those offices opened up faster than a Starbucks in NYC all over Toledo quite suddenly in the last couple years? It’s because it’s great profits, these places are making money hand over fist.

SOME of those people who need the hundred bucks will indeed pay it back within the 2 weeks, but many others don’t have the hundred bucks after 14 days and will need to take out another loan to cover the first. Do you disagree?

As far as your other point…
“The unemployment rate will go up. These employes will have to look to the government for assistance in the form of wages and insurance.”

In that statement you are basically telling me that of the businesses that actually DO shut down because of this house bill that they are unable to find another job? Are they totally unskilled? Are there no jobs left in the state of Ohio? Give me a break.

Oh, and not everyone can get a credit card but everyone can get a payday loan, there’s something evil about that scenario.

By: Craig on May 5, 2008
at 4:11 pm

Not everyone can get a payday loan. Don’t know where you got your information but I do work for one. For some it is probably easier to get a credit card then a payday loan.

Skills are needed in my job. in fact I have a degree in accounting and business management. As for getting another job sure we can maybe except there are very few jobs out there right now and there’s probably a line a mile long already standing in line to get them. Is there enough to get a newly unemployed 6000 to 7000 people back into the work force.?

By: tekia on May 5, 2008
at 4:47 pm

Please vote no on Bill 545. Do you think the economy is bad now do away with payday lending, and over 6,000 jobs are lost 6,000. Not to mention these people using the lending compaines have poor credit and cannot get a credit card for help what will they do I don’t think you upper class people get it. For some this is the only way we can make it

By: Tricia on May 5, 2008
at 6:29 pm

I’d like to know where this “6,000 jobs lost” number comes from, can any of you offer credible evidence that 6,000 jobs are at risk? Is that a number generated by simple math, let’s say, 600 stores in Ohio X 10 employees each = 6,000? If it’s math like that then you are assuming that ALL the payday loan stores will close. That’s not going to happen. What’s more likely to happen is that these stores will stop being profitable for the corporations that run them and they will downsize. There will be a reduction in the number of these places I have to drive by every day that I drive to work in Toledo…but I will still have to drive past some.

Show me where your “6,000″ number comes from, and don’t just show me a quote in an article. Find the source they got that number from.

Tricia…
“Please vote no on Bill 545″ ? Who are you talking to? Who can vote no? Not me, not you, as far as I know, that sign I took a picture of speaks to no one in the Toledo area. This is a state legislative issue, not something that’s coming up in a general election.

By: Craig on May 5, 2008
at 7:08 pm

My wife managed a couple of these stores a few year ago in two different areas in OH. It’s ridiculous how these business keep consumers in “the cycle”. The industry is crying their eyes out because the potential to lose profit. I say vote yes on this HB and put an end to these “loan sharks” raping the public.

By: William R. Barnett on May 5, 2008
at 8:36 pm

I forgot to make a comment on Craig’s response. It looks like the Dayton Business Journal cited 1638 lending shops. By taking what I know about the staffing at some of these places, there are about 2-5 people running a store through the week. Some of the smaller locations have just a manager and 1 or 2 CSRs and some have more people. So, I would say the estimate of 6-7K jobs being affected isn’t too far off.

P.S. I have some spelling mistakes in my 1st post.

By: William R. Barnett on May 5, 2008
at 8:43 pm

Maybe you wouldn’t be laughing if you were someone who could potentially lose your job of five years like I am!! I’ve managed a Cashland store in Ohio for a few years now and not everyone is laughing like you…. because not everyone is ignorant to the industry like you are! My customers are outraged that the government wants to take this credit option from them! Why can’t the consumers make their own financial choices? Do they seriously need the government to make these decisions for them?
Maybe you wouldn’t laugh if you were a payday lending customer who depends on this service to avoid bank NSF fees (noone is complaining about those fees, I see), late fees from credit card, mortgage and auto financing companies. Or if your children needed food or clothing or school fees and you had nowhere else to go. Just because you’ve never required this service does NOT mean that it should be eliminated. Maybe you’re a little more fortunate than some. Maybe you never have hard times. Well, thousands and thousands of people do and they come to my store for much needed help. They are treated with the utmost respect and kindness, they are given different options if they have difficulty paying us back on time, they are happy to see us, and they always leave with a smile! They know the fees but are more than happy to pay the price of business.
Maybe you wouldn’t laugh if you were one of my three children that I support with my job. I make an honest living, I make great money, and I am very scared to lose my job, along with 7500+ other people in the state when the job market is already bleak.
As I said, you are ignorant and unfamiliar with what we do. The only laughing I am doing right now is at YOU!

By: Kelly Johnson on May 5, 2008
at 11:02 pm

Oh, and Craig, the “6000 jobs” that you previously referenced is actually a little low. There are 1638 payday lending stores in Ohio (don’t you research this stuff before you shoot off?) with an average of 2-5 employees. Then you need to account for corporate offices with accounting, marketing, Human Resource, MIS, development, and collection departments. Just so ya know. By the way, do you have a job?

By: Kelly Johnson on May 5, 2008
at 11:15 pm

Wow, Kelly, you’re feeling a little hostile, eh? But I’ll approve your comments anyway.

My “research” involved reading a couple articles in publications that stated 6000 jobs lost. I also heard that figure from some of the previous comments to my post. I simply ASKED someone to provide me with a source for this number. You stated that there are 1638 of these payday loan centers in the state. Answer me honestly, are all 1638 stores going to close? Really?

I have had hard times in my life with money. When I was in college I got myself into some pretty good debt and I needed to buckle down and ask for help from an agency that would help me LEARN about credit and how to use it responsibly. They also helped me communicate with my creditors and adapt my payment plans.

Does your office do that? Or would your bosses rather keep them in a cycle of debt by letting them borrow more and more money.

…and my LAUGHTER at the top line of my post was for the wording on the sign. If you read it again you’ll see that I found it silly and ridiculous that the sign says vote NO on this bill. NONE OF US CAN VOTE NO OR YES. This is a state legislative matter. Maybe you and your commenting cronies should do YOUR research.

By: Craig on May 6, 2008
at 4:11 pm

A good old flame war!?!

I bet your customers are outraged. This bill would be like cutting them off from their “crack supply” as these stores pop up more than crackhouses in OH. I love the legalized loan sharks hoping on their soapboxes and acting as cheerleaders for this industry. By the way…are any of your employees able to use the cash advance services while employed at your store? Also, what is your attrition rate within the company?

To comment on the loss of jobs at the upper management level. Many of their companies are diversified. For example, Advanced America/Cash Advance owns a chain of hotels among other things. So I would imagine the corporate level would be OK.

I love the little jab in about “do you have a job?”

By: William R. Barnett on May 6, 2008
at 6:05 pm

Here are some tidbits from my wife, who was a former manager at Advanced America:

1. If the loan is not repaid by the end of the contract, then the held check must be deposited according to the Ohio lending laws. If there is not sufficient funds to cover the check, the bank charges fees on the customer, which adds to the cycle of debt.

2. After a customer’s check is returned from their lending institution that is usually when the payday companies can “work on a payment plan”, but not before they are in further debt.

3. The is a push from the payday lender for the customer to take out the maximum amount they qualify for, even if they wanted a lesser amount.

4. Advertising of services in areas that “lower income” people might populate such as laundromats, apartments buildings that accept Section 8, carryouts that do bill payments and/or check cashing, and pawn shops.

These are the underhanded and devious tactics used at Advanced America in the Toledo, OH.

By: William R. Barnett on May 6, 2008
at 6:21 pm

More food for thought:

http://discuss.epluribusmedia.net/node/1128

Please read the report entitled “The Continued Growth of Payday Lending in Ohio”.

By: William R. Barnett on May 6, 2008
at 7:06 pm

The signs ALL say that. By corporate instruction. Senators have been out in the state visiting payday lending places to get a better understanding of how we work. So these signs were for them… not your amusement.
And yes, I’m feeling hostile. I don’t like facing the possibility of unemployment. I doubt you would either.

By: Kelly Johnson on May 6, 2008
at 7:46 pm

So the senators were out looking at these signs?

By: William R. Barnett on May 6, 2008
at 8:02 pm

No, they were visiting the stores. Actually doing loans and then telling us they couldn’t pay back to see how they were treated. As I said earlier, we’re not “underhanded or devious” and we have a couple of different ways to extend payments and put them on plans. They wanted to understand the industry that everyone is attacking. Most people only hear what the media has to say. But it’s one-sided. I’m sure you’ve seen that at work before. How often is the media fair? Has the media mentioned the millions of dollars that payday lending companies raise and/or donate to very worthy causes, such as Susan G Komen Cancer Research, Big Brothers Big Sisters, or JDRS? Believe it or not, these 6000-7000 people losing their jobs are not wealthy, evil loan sharks doing their best to make people drown in debt. We’re hard-working single moms, college students, mothers, and fathers. Our customers are not the poor and oppressed as the media would have you believe. I have nurses, college professors, law enforcement officers, state employees, and any other profession you can imagine as loan customers. They are home-owners who live in sub-divisions. They are young couples starting out in their first apartment. They are just plain people. They’re not being taken advantage of. They are being provided a service THEY ASKED FOR in a heavily regulated environment, with all fees and charges disclosed very clearly, no surprises.

By: Kelly Johnson on May 6, 2008
at 8:15 pm

As I stated before, my sources in your industry worked at a few stores in the Toledo area in different demographic regions. Not only my wife, but one of her close friends. Also, several others are either past or current employees at Advance America. My family still keeps in touch with them, so I hear some of the stories. The simple observation was this: the stores in upper-class areas, such as Perrysburg were not as profitable as the ones areas, such as South Toledo. The clientele for the most part were polar opposites. The trend was and will continue to be short-term lenders preying on lower-income families, as it’s just good business for payday loan companies.

So my points are vaild, at least with this particular lender. These are company polices that middle-management forces the CSRs to adopt when working at this particular payday advance organization. Advance America used some very questionable tactics, but the botton line is turning a profit. Does “held checks high” and “NSF checks low” make any sense to being profitable?

Perhaps your location and company are different, but there are many other lenders that are not working above the board. Face it, your industry has been under the microscope before and other states had adopted similar regulations. You chose to ignore the research that has been done for years, which negatively impacts payday lenders.

By: William R. Barnett on May 6, 2008
at 8:39 pm

Another point I forgot to mention was regarding the employees. Don’t get me wrong. I’m not painting the individual employees as the bad guys. I am simply stating the corporations as being the greedy ones. You are correct the employee are going to suffer, not the CEO and his junior execs. They’ve been living high off the hog for years.

Most short-term lenders charge the max. interest rate by law. They do this by choice. Let’s gouge the consumer even though we could survive charging less. An 800 loan is better than a 500 loan, so let’s push that because the customer is qualified for more. More “held checks” and this mean more profit. Let’s keep those “NSF checks” down by suggesting taking out another loan at a different lender to cover ours. Get that loan paid off ASAP and you can qualify for another one!

As a manger at Cashland, what “numbers” are you held accountable for every month?

By: William R. Barnett on May 6, 2008
at 9:01 pm

It’s upsetting to see people who do not understand and know all of the facts to bash payday lenders. Without the support from banks, friends or family, short term cash advances are the ideal way to acommadate those unexpected expenses, and the only way our customers can keep from drowning in debt. Is anyone aware of the extended payment plan at no extra cost? I personally have helped many customers break the cycle and helped them to financial freedom. Its also sad to see people judge the borrowers. They are just like everyone else….you’d be surprised the kind of people that actually need a little extra help!

By: Tara on May 6, 2008
at 9:43 pm

Short-term lending is the last outlet for people after they have exhausted all other possibilities. For others, it’s just quick cash. Either way, the systems keeps people debt more often than not.

I really don’t have much to say about an “extended payment plan”. When is this miraculous service offered? After the customer has bounced the held check after the contract expires? Now they have NSF fees stacking up and you are there (insert inspirational trumpet sound) to the rescue.

It’s comforting to see this short-term lending industry so concerned about saving people from drowning in debt. The research shows this is further from the truth. Sorry, I’m not that naive.

To comment on the “people judging the borrowers”. I read more people on the pro-payday advance side shifting the blame to the customer for using the service. The industry is just playing innocent by saying: “We offer the service and it’s their choice”. All the while overlooking the damage done to the consumer in the interest of profit.

I wouldn’t worry too much about losing your job. After the Senate passes this bill, I am sure there will be some job openings in “predatory lending” giving high-interest rates and fees on mortgages to desperate individuals. You’ll fit right in with your background.

By: William R. Barnett on May 6, 2008
at 10:37 pm

Our extended payment plan is offered to customers before their original due dates. When a customer is unable to pay their loan back, they have the option of extending it out. Their loan is divided into 4 equal payments due on their pay dates - many times this is paid over the course of 4 months. and, there is no extra fee to opt into this plan….its a simple do or dont. this has helped many customers break the cycle.

would you suggest a bill with lower rates to customers that would allow payday lenders to remain in business? or, you just want that option to be depleated (sp) completely?

By: Tara on May 6, 2008
at 10:46 pm

Is the extended payment plan offered before the contract expires? If so, do you void the original contract and write up a new one with this plan? To me it seems you would have to do that in order to circumvent the Ohio lending laws.

By: William R. Barnett on May 6, 2008
at 10:56 pm

thats right! the plan can only be offered before the loan is due to ensure it wont go to their bank if they can not pay back!! there is a new contract written with their payments and their payment dates - and like i said - there is no extra fee for this! we have many customers on the plan now and it is helping!!!

By: Tara on May 6, 2008
at 10:59 pm

It’s all an attempt to keep the “held checks” high and the “NSF checks” low. It sure does make the numbers look good for corporate!

While it a ray of sunshine in some darkness, it still doesn’t shift the payday lending service in a better light. Too many of the lenders are holding consumers to single balloon payments (repayment of the entire loan), loan flipping (extensions, rollovers, and back-to-back transactions), mandatory arbitration clauses (read the fine print on the contract)

By: William R. Barnett on May 6, 2008
at 11:09 pm

Oops—hit submit by accident.

Anyways. There is more harm done than good. A few bad apples spoiled the whole bunch. Ohio will hopefully just be another state with stiffer regulations.

By: William R. Barnett on May 6, 2008
at 11:12 pm

well, congrats to you for never needing a service like that. not all of us are that fortunate. id rather pay 15 dollars for a quick 100 than the overdraft fees my bank charges. Its obvious that no matter what anyone opposed to the bill will say, you’re not willing to listen or understand. Let me know if you have any instant messengers and we can chat more easy. I would like to understand your side more and perhaps tell you some more stories from mine…interested?

By: Tara on May 6, 2008
at 11:18 pm

The argument from the opposing side seems to be “walk a mile in my shoes” and then you’ll think differently. It’s a weak argument to suggest unless you have used the service, then you wouldn’t understand the need. I recognize the need, which is the reason why payday loan centers pop up on every corner. People need money and payday lenders offer the service. Also, I understand the system well enough even through other parties. Payday loan companies are a very profitable business. It’s not rocket science.

The question that I keeps going through my head is: At what cost? It seems the consumer gets the short end of the stick most of the time. Yet, on a rare occassion someones does break the cycle.

It’s not that I never was strapped for cash at any point in my life. I chose and continue not to use that method. My logic is simple. A paycheck has enough coming out of it without another creditor trying to take out more.

You are correct. I will continue to support more regulations in the payday loan service. This is my stance and I will continue to state my position on the matter. There is really not much more to understand. The beauty of the legislative system is we can lobby for our respective side. One of the members of the Finance and Financial Institutions Senate Standing Committee is from my district. I am sure you have heard the phrase “Write your Congressman. In this case…Write your State Senator.

By: William R. Barnett on May 6, 2008
at 11:48 pm

I normally don’t get involved in such heated discussions, but there were a couple of points I wanted to make here.
I am of the firm belief that more government control is not something we want to strive toward. Whether it be the smoking ban or closing payday loan establishments. Anytime the government can dictate how a business is run, hits too close to home for me.
It seems that no one is forcing people to use these high interest loans. After all, the government is the last “people” to point their finger at an institution for “charging too much”. Ever look at how much they are taking out of your paycheck (even before you can hit the nearest Cashland!)?
I read an article in the paper once, (sorry I can’t reference it) where the government was going to step into the tanning salon business and say that no one can tan unless they are over 18 or have parental approval. SO, am I against people needing to use payday loans? YES! I think people should live within their means and sometimes there are ways they can cut back in other areas. But I don’t think we need the government to step in. Am I against smoking in public places? YES! I can’t stand to smell smoke when I’m eating, but I don’t think the government should control it. Do I think it’s a bad idea for teens to go to a tanning salon until they look like a leather purse? YES, but…..see the common thread??

By: Missi on May 7, 2008
at 9:07 am

Why is it that you are so adamant on this issue, William? Are you currently stuck in the “cycle” you like to mention? Are you losing your home because of those horrible cash advance companies? Are you struggling to feed your family because of your ridiculous loan fees? I have to assume the answer is NO. And if so, then why is it you care so much? If you don’t need short-term loans, that is GREAT. But lots and lots of people do. I don’t go to strip clubs. I don’t go to casinos or buy scratch-offs. I don’t get home furnishings from rent-to-own companies. I don’t agree with any of the above mention industries. So you know what? I don’t frequent them. I just don’t go there. So why is it you feel you have to lobby against this so passionately? Just don’t use the services, and leave them to people that value them.

By: Kelly Johnson on May 7, 2008
at 5:17 pm

I sent an e-mail to a Senator today and I told him that if he’d never seen the look of relief on a customer’s face when I handed over money they needed to buy groceries for their kids, repair the car they rely on to get to work, or keep a roof over their head, then you just don’t understand what I do and why I’ve done it for 5 years. I came from a banking background of 5 years before Cashland. I too viewed them in a bad light, because I didn’t know anything about it. Yes, there are bad companies with bad practices. There are bad doctors, lawyers and preachers but we can’t stereotype them all by that. I treat my customers with empathy and patience. I give them options and suggest ways to get out of the “cycle”. I cheer for them when they say it’s the last loan they need. I don’t need to keep them borrowing. I’ll have other customers that need help. And I’ll be there giving them the money they need to walk out with a means to handle their financial situation.

By: Kelly Johnson on May 7, 2008
at 5:23 pm

The Consumers Side:
The Statement: “OUTRAGEOUS APR% is Predatory Usurious and strips wealth from the working middle class….”

The Truth: The PayDay loan APR reflected is not truly accurate. The way that it is calculated is as if you borrowed the $100 and were charged the $15 fee every two weeks for a year (but keep in mind they dont raise the amount you borrowed from $100!). Lets get real. you pay back a PORTION of what you borrow, which is fifteen percent.

Payday lenders aren’t allowed to extend credit for an entire year, so why is it fair to act as if the fees you pay back are multiplied into a yearly credit? If that were the case, take your $100 2 week loan, multiply it by 26(52 wks in a yr, biweekly loan=26 wks) $2600 is what you received in this calculated 1 year loan, then multiply the $15 fee times 26 $390 is what you paid to borrow the $2600, you are STILL only paying back 15% of what you borrowed.

It is an unfair, deceptive misrepresentation of APR if you are not taking into consideration BOTH the amount borrowed and the interest.

As for the housing market—let’s talk about fairness–and PREDATORY LENDING. I am paying back 2.5 times the worth of my house, yet my APR is 6%–it seems just a tad backwards?

A rather cliché question raised is “what happens when you give a loan to people who “cannot afford pay them back? You have the mortgage crisis that Ohio is currently in” Um–big difference between a $300 two week loan and a $200,000 mortgage that you repay $450,000 back with interest….I think I can handle the $300 bucks (and the $45 fee).

Predatory –DEFINED —How about $4 a gallon for gas–I HAVE to purchase gas–I have no choice there, How about the increase in price of food–I HAVE to eat to live…To raise prices on things we cannot CHOOSE to survive without is Predatory. No–Im not being “lent” money when I purchase these items, but I am spending a lot of money without choice.

But HB 545 DOES give the banks a choice—if you read it, CREDIT UNIONS ARE ALLOWED TO CONTINUE TO GIVE PAYDAY LOANS OF 30 DAYS OR LESS at 10$ per Hundred….which is $5 less than Payday lenders, but get this—they can loan up to ONE THOUSAND DOLLARS! $200 MORE THAN PAYDAY LENDERS! Oh, the kicker is…they can still charge you fees for return checks, or late payments—you think that the bill is siding with the banking industry that has since seen a HUGE loss on NSF fees and OVERDRAFT FEES? Yes, Payday lenders will take credit for that, because they are HELPING the middle class worker avoid 60$ in fees for a bounced $10 check.—By the way—whats the APR on that one?

The real issues are below this superficial stage that is being set for the elections, Create your platform–take the focus off the REAL problems–we have surpassed recession (the taboo word NO ONE will use) we are headed for depression, to eliminate the choice of financial assistance further empowers our downward spiraling economy. HB 545 Cripples and devastates Ohio’s economy.
I say Thank You for free will and the ability to have choices…VOTE NO ON HB 545–its another right to choose we are having “chosen” for us.

Strickland’s Hypocrisy:
Add the Amendment of the STATE FUNDED KENO ELECTRONIC GAMBLING GAMES in the VERY BARS AND SOCIAL CLUBS THAT HE DROVE OFF A FEW MONTHS AGO??—he is feeling the pressure of his poorly and publicly humiliating budget shortfall. So He added this amendment and “backed” the HB 545? NOPE, he was just finding a way to slip his “easy fix” into a much debated bill, and as soon as he “blessed” it, a majority of the parties fell in like robots, persuaded by his new found Protection of the Little guy…Not really-Try more like a way to take more money from them.
The expanded gambling is projected to cover a $73 million shortfall in education funding.
Governor, If you are looking to protect the “Prey” of predatory lending…why are you looking to put “state funded Keno machine” in bars and social clubs? Do you think alcohol may persuade the poor middle class workers that cannot decide to obtain a short term loan for themselves, to make decisions they shouldn’t…—do you think THAT’S a little predatory? But the consumer is not benefiting from feeding these machines…HE IS.
Wow, the truth can be so ugly.

The Employee side:
FACT :Only 10% of Payday loaning customers do not pay on their scheduled due date….

Approximately 7,500 jobs are at stake, with the rising foreclosures the passing of HB 545 will only ADD to the foreclosures.
Payday lending profits BENEFIT the state— salaries and benefits are paid to employees.
What will the unemployed do for healthcare?
What will the unemployed do to pay for the gas that is on a swift upward climb, kissing $4 a gallon?
Where will the families who foreclose due to unemployment live? Will you vote YES to add bodies to the homeless shelters?
What will the children of the unemployed do for school supplies and lunch money?
Will you vote yes to add to welfare claims?
Will you vote yes to increase food stamp pay out?
Many companies are laying off employees and shutting down plants due to the state of our economy. We’ve seen the devastating effect a layoff of 600 people can have on an economy, will you vote Yes to multiplying that effect by TWELVE?
Research shows desperate times in suffering economies lead to crime, will you vote YES to lessen safety and increase crime rates?

The Resolution:
AMEND:
Lower the loan limit to $500
Introduce the statewide database to track loans and ensure compliance with CURRENT laws governing payday lending.
Introduce a financial education program to the 10% of customers that cannot pay back their loan
Allow Payday lending at the same rate of Credit Unions 10% of Principal (a 5% decrease)
VOTE NO on House Bill 545. And Vote yes on a compromise that allows CHOICE, HELP, and SECURITY.

By: we the people on May 7, 2008
at 8:55 pm

Wow, thank you “We The People”! It seems that many just want to sit around and discuss something that will not affect them at all. People that will neither gain nor lose anything if this bill passes. The media has cast the industry in such a bad light that weaker-minded people grab onto their misrepresentation and run with it. They swallow every twisted word and depend on hear-say (my wife says this or my neighbor mentioned that) to form their opinions of something they aren’t familiar with. The payday lending industry has openly accepted the proposal of lower limits and a statewide database. But the reality is, if this bill passes and you break down that 28% APR to a two-week loan, we’ll make about $1.30 per hundred. So on the maximum $500 loan we can make a whopping $6.50! Not enough to pay my salary for an hour.

By: Kelly Johnson on May 7, 2008
at 10:04 pm

And I’d like to mention this to William B about his continued usage of the terms “held checks high” and “NSF checks low”. Tell me, isn’t every business in America trying to profit? Are you going to tell me that cash advance companies are the only selfish ones “looking out for their interests”? Come on, that’s a no-brainer. Any where you go, companies are trying to boost their profits to the max. Suggestive selling products you may or may not need. Why would we want bad loans to collect? When my store NSF numbers are high, my supervisors look at me and say that I need to be sure to make smart, collectable loans and retain current contact information. When they see my “held checks” decreasing, they want to examine the customer service that we are providing and the marketing approaches that we are using. Of course we want to be profitable. Isn’t even Goodwill profitable to some degree? We have brand new stores popping up in our area all over the place. You think Walmart isn’t looking for profits? You want to throw jabs about our held checks and NSF’s, but it’s just good business sense to make profit. How else will a company grow and create jobs? How else could it survive and provide benefits for current employees?

By: Kelly Johnson on May 7, 2008
at 10:16 pm

I can’t help but jump in here with a few simple questions?

1) If payday lending is so bad, why is HB 545 helping to set the banks and credit unions up to do these loans in the place of companies like Cashland, CheckSmart and Advance America?

2) When all the people who work in the payday loan industry in Ohio suddenly find themselves unemployed, how much is the total unemployment compensation cost going to add to Ohio’s budget shortfall?

3) Where is Ohio going to find the businesses to take over the 1600+ empty storefronts vacated by these companies or are these vacant buildings just going to add to the urban blight in Ohio’s cities?

4) Does anyone have recommendations for the 6000+ men and women left unemployed as far as jobs in Ohio that will both pay something close to the good pay they are currently getting and provide the benefits these companies give their employees? Or will they be moving out of state to find work, taking their taxes dollars and spending power with them?

I await getting the answers here, because I doubt that Governor Strickland and the Legislators have them.

By: Tom on May 7, 2008
at 10:29 pm

when our nsfs are high, we have to look each customer up to find out what happend…why they returned. we are constantly reevaluating our loaning procedures to prevent customers from borrowing more than they can reasonably pay back in 2 weeks.
my region consists of 6 stores and last week only, we had 50 new customers. people need pay day lenders more than ever right now.

cashland has made many proposals to better the lending for consumers. they are currently working on a system that will no longer allow the store to make decisions concerning how much a consumer can borrow….the borrower will actually be making the decisions themselves based on multiple credit checks, advance history and their status with other companies all with a swipe of their own id card.
why people think this choice should no longer be made available, even with these improvements, i will never understand!

By: tara on May 7, 2008
at 10:39 pm

Craig,
As you have heard from Kelly I don’t think you realize how devasting this bill is going to be to families in the state of Ohio as if you did not notice only 4000 of us showed up in Columbus on Tuesday to show ignorant people like you how many people will be effected by this. Not only are there over 1,000 payday lending companies but I happen to work at the corp. office that Kelly is referring to and over 200 people in my building alone stand to lose our jobs. So while you have a nice life and have all the time in the world to post blogs and argue with people about an issue you are obviously not informed on I am back to work and informing people such as yourself how bad this really is next you will be complaining of all the people on welfare because we all lost our jobs because of ignorant people such as yourself.

By: Tricia on May 8, 2008
at 10:36 am

Well this is just great! Im poor, Im black and Im a single mother. The only place in this town that dont treat me like crap is the payday loan place I go to. When i need cash to cover the rent they help me out. They treat me with respect which is something i dont get none of at my own bank. I always pay off my payday loan.
In my opinion this is just another way for the goverment to keep me and my people down and poor. Where are we supposed to get help now? And wheres all the black employees losing their jobs supposed to get work now?
Yeah, I see it as a race issue because where i live its mostly my people working at the loan store and my people gettin loans. Its hard enough for poor African Americans to get credit and find a good job as it is.
I guess I supposed to play that keno game and try to win rent money. Maybe my boss will give me a raise to help. I dont think so he says the 6.25 he pay me now hurts him.
I guess when I end up back on welfare the goverment will be happy. We wont have no freedom, we wont have no money, but look on the bright side We can gamble and help line their pockets some more!!!

By: Latoya on May 8, 2008
at 1:19 pm

I have to ask, where’s Craig? Still laughing about those silly roadside signs? Still cheering on HB 545 all the way? Still hoping that this bill passes and those greedy cash advance companies crumble to the ground? Still crossing his fingers but still not seeing the negative consequences that will touch all of Ohio? Maybe now you see a bigger picture, hearing from employees that need their jobs and customers that need the loans? Why don’t the supporters of this bill expend their time and energy rallying about the bigger issues at hand? How about the prescription drug companies that charge obsene prices for medications that people need to live healthily? What about the elderly on fixed incomes that spend $200, $300 or even more a month just for their prescriptions? Now there’s poor and oppressed!! How about we focus on gas prices? Let’s talk about welfare reform! Let’s talk about American citizens that cannot afford health insurance. Let’s talk about a war that has been ongoing for (get this) over seven years. My God, it seems that if we want to talk about something worthwhile, we could find something better than payday lending. I say the government needs to stop interfering where they have no business and give their attention to real problems. Maybe those issues are a little to big for them to handle so they’re just distracting you with payday lending companies.

By: Kelly Johnson on May 8, 2008
at 4:31 pm

Wow…

I’m glad to see all the attention this topic is generating.

No, I’m not caught in the cycle of debt. I have never used a payday loan before. I think the business is crooked and it’s about time something is done about it. Personally, I am tired of companies “price-gouging” the consumers. There is a fine line between capitalism and flat-out greediness. Furthermore, my usage of “held-checks” and “NSF checks” is for others to know I understand your business’ vernacular. It has very little to do with making a case for you on profit. My point is this: the main driver on your business is more loans without too many write-offs due to NSF checks. Your main priority is handing out loans and the more the better. The higher amount the better, regardless of the customer’s actual need.

I might be on a “crusade” against payday lenders, but whether or not it “affects” me is irrelevant. I have never been shot in a drive-by, but it doesn’t stop me from speaking out against crime and gun reform.

Regarding Kelly’s comment on Goodwill being profitable to some degree: Goodwill is a non-profit organization, which means at the end of the month their books show zero profit of the services they provided.

Also, I would like to know how many of these payday loan companies offer other services than just short-term loans? How about check cashing utility payments, Visa check cards, money orders, etc.?

The opponents to the upcoming Senate bill are belly-aching over this as it’s there only source of business. The payday loan industry is trying to paint a picture that is loosely based on conjecture. The truth is the short-term lenders are scared to lose their most profitable service and even with the proposed reform, they could continue to do business. So here is the big question for all the proponents of payday loans: Is the service provided by payday lenders the reason you are against the potential regulations?

A big golf-clap for the protesters in Columbus. This isn’t the first time a segment of the Ohio workforce might lose their jobs. You don’t have to look further than the auto industry, steel workers, public school educators, or healthcare professionals to see other people being stuck in the same rut.

I think Cashland needs to change their signs. The HB passed last week and was introduced to the Senate on 5/1. It looks it it was assigned to a committee this week.

By: William R. Barnett on May 8, 2008
at 4:32 pm

By the way, did anyone else attend the rally in Columbus? I see you were there Tricia….. wasn’t it awesome!! The senators kept asking us to be quiet, so I know they couldn’t ignore us. I thought it was really funny because who ever heard of a quiet rally? For those that weren’t there, it was an amazing experience to look at the faces of the people who will so personally be impacted should this bill pass. It was such high-energy because we weren’t just fighting for an idea we believe in, we were fighting for our livelyhooods and our families!

By: Kelly Johnson on May 8, 2008
at 4:35 pm

We’ll advise corporate immediately on those signs. They obviously offend you.

By: Kelly Johnson on May 8, 2008
at 4:38 pm

And I stand firm. If you don’t need a loan, don’t get one. You need a cheap money order, need to send a Western Union, need to cash a paycheck, need to prepare your taxes, need to purchase a pre-paid Visa, or just wanna send a fax, come see us! We do lots of other things, but the income from those products is minimal and will not keep our doors open.

By: Kelly Johnson on May 8, 2008
at 4:40 pm

Do you crusade against rent-to-own companies? Ever gone in to purchase a $500 sofa and paid $1500 by the time you owned it? Ouch, just talking about it makes me feel ripped off. But they can stay open. It won’t bother me.

By: Kelly Johnson on May 8, 2008
at 4:42 pm

I don’t like “rent-a-heap-cheap” stores and they should fold up too. I wouldn’t be surprised they don’t bother you. Like they say: “Birds of a feather flock together”

By: William R. Barnett on May 8, 2008
at 4:55 pm

Mr Barnett,
I donot need you or any other freedom hating zealots to protect me and my financial issues. I donot need the goverment to protect me from payday loans or what you all are really inplying, my self.
If you really wanna help us out, us being those who are poor, not as educated as you, not as well off as you, then please get your friends in the state house to do something about the high cost of food and gas and the low wages that people have to work for!
I cant afford to buy no new car that gets better milage so gas is killin me, but I got to have it to get to work. No there aint no bus to take, my town aint got nothing but a cab service and to go to my job and back costs 24.00
Even the cheap food isnt cheap no more.
Yes, Sir, its my choice to do payday loans Did you hear that? Mine. Since this goverment doesnt give me any other alternatives Ill be using them.
Im wondering if you hate them so much becuase your wife lost her job there? Why did she go work for them in the first place if they are so offensive to your delicate sensibilities. If she managed stores then she was there long enough to work her way up. Did ya bash them then, when she was bringin home her paycheck? Or did you wait til she didnt have it no more.
You seem to wanna be all up in my business as a loan customer so I guess I have the right to be all up in your business now right?

By: Latoya on May 8, 2008
at 5:03 pm

Didn’t I tell ya earlier that the consumers do not want to be “protected”? They don’t feel comforted by the government’s “interest” in their finances! They’re enraged!! How dare these officials take something away because they don’t need it? How dare they step in and tell customers they don’t have a right to pay those fees? After all, strippers and porn stars will still be employed when I’m standing in the enemployment line. And I agree completely with Latoya. If these companies are so wicked and crooked, how did you stand by and watch your wife take advantage of those poor defenseless customers everyday? How did you even have the heart to pay the cable bill with the paycheck she earned by predatory lending?

By: Kelly Johnson on May 8, 2008
at 5:14 pm

I see what Mr Barnett wants,
a world that doesnt include those who he thinks are “inferior” to him.
a world that only has businesses that cater to the “superior” people like himself.
a world that doesnt have any thing that makes him uncomfortble, like poor people, anything or anybody that helps poor people.

By: Latoya on May 8, 2008
at 5:16 pm

I would like to comment on the government sticking their nose in where it doesn’t belong aka another argument for payday lending:

At times the government has to step in when behavior is morally and unethically wrong. Historically, the government enacted anti-trust laws against several corporations, such as Standard Oil. In 1970, the government enacted the EPA to regulate industries and protect the environment, which continues to regulate many industries. More recently, the federal case against Microsoft’s cornering of the software market is another example of the “government stepping in”.

In Ohio, the smoking ban was passed, which effects roughly affected 15-20% of the population. I’ll be the first person to speak out against the freedom of choice, but in this case smoking had to be regulated in public places.

I would imagine some of the payday lenders and their clients are glad the government stepped in to “protect them” and continue to enforce regulations. To comment on my wife’s experience at Advance America. She was hired in as management and worked there while I attended graduate school. When I returned to the workforce, I suggested she quit because of the unethical business practices. Aside from what I have stated here, this company also violated federal laws for overtime and was required to pay several year of backpay.

Any other questions?

By: William R. Barnett on May 8, 2008
at 5:24 pm

I want to correct my comment on freedom. I am FOR personal choice and freedoms. It just didn’t get worded that way in my last post.

By: William R. Barnett on May 8, 2008
at 5:29 pm

So her working for them was ok, while you needed the income while you were going to school, is how i am understanding you.
OK, so how about it be ok for me to be able to take my payday loan while I work on getting myself a better paying job.
That company she worked for allowed you to get your schooling and pay the bills by paying her a decent pay. Maybe thats what the payday workers are upset about on here, you benefited from those good wages but you dont want them to.

By: Latoya on May 8, 2008
at 5:32 pm

So the money she made doing all these unethical business practices was ok for you to withstand while she put you through graduate school. But it just couldn’t be handled any longer once you actually got a job.

By: Lori on May 8, 2008
at 5:32 pm

I think you are for personal choice and freedoms as long as those choices meet YOUR approval, thats basically what you been saying all along

By: Latoya on May 8, 2008
at 5:39 pm

For to be free is not merely to cast off one’s chains, but to live in a way that respects and enhances the freedom of others.
Nelson Mandela

By: Latoya on May 8, 2008
at 5:46 pm

I’m starting to see that Advance America may have unethical practices in lending and other areas. And I’m sorry that she had such a negative experience with the company. But the reality, I work for a great company. I took the job 5 years ago, recently divorced and a single mom with $0 child support. I was skeptical of these companies also, you may remember that I spent several years in banking. But my desparate need for income drove me to take the job and see what it was all about. I found myself working for a GREAT company that took great care of its employees and had the highest regard for the customers. We treat them fairly.
I’ve heard of doctors that have by their negligence allowed patients to die on the operating table. I’ve heard of cut-throat attorneys with little or no ethics or morals. There are priests that have molested little boys. There are banks and credit card companies with very unfair practices. There are car companies that produce faulty automobile parts that result in serious crashes. There are airline pilots that fly under the influence of alcohol. Do you stereotype doctors, lawyers, priests, banks, automobile makers and airlines by these unfortunate incidents? That would be silly, right? Well you get my point.
Are you aware of how heavily regulated cash advances are? My company is a member of the CFSA, which requires us to follow very strict guidelines in lending, fees, collections and other areas. We’re not asking to be unregulated. We just don’t want to be regulated out of business.
Lastly, let’s fast-forward to 2012. Let’s just say for fun that cash advances are still around and still a popular credit option for Ohioans. Can you tell me how this will affect you? Will it hurt you? Will your life be in ruins? Will you still be able to pay your bills and live comfortably? I got a feeling that this issue doesn’t involve you in the slightest.

By: Kelly Johnson on May 8, 2008
at 5:47 pm

Maybe you don’t understand the “whistleblower” concept, so let me try to explain. A former tobacco executive went to the news program, 60 Mins., to tell them about all the underhanded acts of “Big Tobacco”. He worked there for many years, but something in his gut told him what he was doing was wrong. Just because my wife worked there doesn’t mean I should keep my mouth shut. Don’t get confused about the situation.

You are correct. I am entitled to my opinion and I continue to fight for or against whatever I choose. You may be of the opinion that the government shouldn’t be making the decision for you, but you cannot cast your vote on this bill. You are going to have to convince the senators on the Ohio Senate that are voting on this bill. Good luck!

By: William R. Barnett on May 8, 2008
at 5:47 pm

I like your comment on stereotyping. I don’t know about many negative doctor and lawyers jokes I can write down at the moment. How has the medical community been hurt by stories of malpractice or trying to push medications on patients? Some people chose not to undergo annual physicals, simple procedures, or follow a doctor’s orders because of some misguided ideas. It happens all the time and people choose to do things for silly reasons. Get used to it.

I understand the regulations and know the Ohio lending laws. It’s up to the State of Ohio to make those regulations, just as they are doing now. Every state is different with regards to payday lenders. Some are even banned and other companies work around the laws.

At this point, the evidence against payday lending has been negative, but well researched across the country. There is more harm than good done to the consumer. Ohio is just going to follow suit with other states.

By: William R. Barnett on May 8, 2008
at 5:59 pm

William,

I think you need to get more informed about ALL payday advance places before you cast your vote against them. Not all of US (yes I said us, because I do work at one) are like Advance America. All your information and stats that you are throwing out come from them…..not all of US. Maybe they were unethical and pushed their customers to borrow more than they actually wanted, but I can assure you that does NOT happen within my company. If anything we try to keep people at a minimum and yes we do try to help them out of the “vicious cycle”. We are not predatory, we do NOT force them to come here, as one comment I read on another site stated, “we don’t force you to come borrow money, then lock the doors so you can’t get back in for two weeks to pay us back”. People come in on their own free will, we explain everything to them up front, we even have a very large poster that discloses all fees and qualifications hanging in our lobby for all to read. There are no surprises, there is no deceit, people are fully conscience of what they are doing, and are greatful for our services.

By: Lori on May 8, 2008
at 6:09 pm

There you go, once again talking down to those who are not as educated as you are. I DO understand the whistleblower concept, but i do so appreciate you taking time to *educate* us.
i understand alot more of what YOU are all about.

I too, am entitled to my opinons and will keep fighting for what I believe in too. And that is freedom for all citizens, regardless of how “special and pampered” they are, freedom for all, whether they have a phd or whether they have a high school diploma. Freedom for all whether rich or poor.

Freedoms for just wealthy educated caucasions does not make this a free country.

Now, just down the street from my home is a store that sells alcohol and further down is a gentlemans club where well to do men go and pay money for lap dances from half naked women. Mr Barnett, I would be mighty pleased if you could do something about those two businesses for me. They offend me terribly and they are not a good example for our children. I have spoken to politicians before on this but they dont care what this poor black woman has to say, but I bet they would listen to you, beings you have the education and background that is so familiar to them.
Thanks! I knew i could count on you!

By: Latoya on May 8, 2008
at 6:10 pm

Latoya, I am pretty hard to offend, but I have to admit that your race comments are starting to get to me. Here’s why, until you started to post, race has not been an issue on this post, now you can’t say anything without bringing up the fact that you are poor and black. I want you to know that the ONLY reason my hubby and I have accomplished anything is by the grace of God and for that I will be eternally grateful. Not because, or inspite of the color of our skin. Please stop using that as an excuse. If you need to use the pay day loan places, because your expenses outweigh your income, it’s because of that, not because of your race.

By: Missi on May 8, 2008
at 6:20 pm

Are making an assumption that I am a Caucasian and I am only for freedom for that demographic group. Let me explain a few things.

I am a minority and everything I have a earned and fought for in my life. Furthermore, I have dedicated my professional career to working with underserved populations and groups of people that society often forgets about everyday.

You would be the first to agree that life isn’t fair. I will back you up on that as I see if everyday. The decision to regulate all payday lenders is up to the State of Ohio. They put the rules on the fees, loan amounts, and terms, which ALL payday lenders must follow. The current laws need to be reformed and this is what is taking place at the moment.

By: William R. Barnett on May 8, 2008
at 6:26 pm

Im sorry if I offended you Missi, you posted some good comments that I enjoyed reading.
Its just that I get so tired of certain people trying to dictate how i should live, or be, or think. I try to rally for all poor people.
Yes, I should have kept race out of it and for that I will apologize to you. I need the loans because I am poor.
This whole thing is about rights for all, freedom of choice for all. I stand by that

By: Latoya on May 8, 2008
at 6:31 pm

Another point is if you think you have freedom in the country, then you are sadly mistaken. The government tells you at what age you can legally drink, smoke, vote, own a gun, and join the military. They also tell you that you must pay taxes and help you by taking it out of your paycheck for you. How nice!

We can keep making this an issue of freedom of choice, but it’s a moot point. It’s not up to us to make the decision, it’s the Ohio Senate.

By: William R. Barnett on May 8, 2008
at 6:36 pm

I’m just curious William…What is it that you do?

By: Lori on May 8, 2008
at 6:37 pm

If payday lenders close down, then people like me will be more underserved than ever before. There will be no alternatives but nobody really cares.

By: Latoya on May 8, 2008
at 6:38 pm

The payday advance stores closing down is the choice of the individual companies. The short-term lenders want you to believe it’s the government that is forcing them to close. The proposed reform of the lending laws would still mean you can get payday loans.

You fail to understand it’s the payday lenders that don’t want any more regulations. They say they are already heavily regulated. The truth is they want to keep their profit margins as high as possible. The payday lenders want to use the argument that they are so concerned for their clients. Some may generally believe that, but it’s all dollars and cents in the end. Payday lending is a business and a very profitable one at that!

By: William R. Barnett on May 8, 2008
at 6:45 pm

Latoya, I understand your frustration and I’m sorry that you need to pay huge fees in order to pay your rent. Obviously the reason there are so many of these places is because the demand is present. So people can shut them down, by not needed and using them. This can be accomplished by decreasing the demand and living within our means, cutting back on the things that aren’t neccessary (like smoking, drinking, pets, cable). By doing this many wonderful things have happened. People have gained control of their finances, and in the big picture, these places will shut down because people don’t need their services, not because we have allowed the government to dictate how we handle our personal business. Which benefits the consumer AND the business owner.

**Craig, great job on bringing up such an interesting topic!

By: Missi on May 8, 2008
at 6:50 pm

I would like some of you to look at the Ohio House Bill as it was introduced:

http://www.lbo.state.oh.us/fiscal/fiscalnotes/127ga/HB0545IN.htm

The decision to chance the current law WAS NOT an attempt to “screw over” the payday lending industry. There was time and thought put into this with well-documented research to support the decision to go ahead with the bill.

By: William R. Barnett on May 8, 2008
at 6:56 pm

I dont have anything to cut back on. I dont smoke, I dont drink. Im not allowed pets where i live. I havent had cable tv in years. I dont have no cell phone. I use a 10.00 a month dial up account on a 9 year old computer. Thats my only luxery in this world.
My problem is I only make 6.25 an hour I work all the overtime i can get but my entire paycheck is gone for just rent, gas and food. i buy food, then im short for rent. I pay rent, then i go hungry.
I take out the 50 dollar loans that i only have to pay back 57.50 for. This allows me to eat and pay the rent during the months i cant get no overtime. Thats not high to me. 7.50 is the cost of a meal out at a cheap restaurant. I know people who eat out everyday and spend way more than 750 for a meal. I dont eat out. I just spend the 7.50 so i can get food for 2 whole weeks.

By: Latoya on May 8, 2008
at 7:02 pm

I have been reading William’s posts and he is correct. I have worked in the corporate office for almost 10 years for one of the largest lenders in the state. Corrupt, leading and opening stores in poor areas is our calling card to say the least. You have no idea how greedy these owners are! CSR’s that work behind the glass don’t have a clue what the execs are up to and how the numbers add up.

By: Tom on May 8, 2008
at 7:04 pm

the pay day lenders are not trying to “make” people believe they will be shut down by the government. the truth is, with a 28% apr rate, they will have no other choice than to shut down. Does anyone realize the effects of what can happen? Not just 6000 plus people will be out jobs. What about rent managers that will lose hundreds of thousands due to lenders closing their doors. what about advertising agents that count on the lenders business and so on. Cashland has been making several attempts to tweak the bill to support consumers financial succsess yet still remain in business and no one seems interested

tell me william…how does a lending company survive on a 28% apr?

By: tara on May 8, 2008
at 7:22 pm

The problem with many Ohioans is this: They need a payday loan. They go to XYZ company and fill-out a risk-assessment (if they company still uses these anymore). They qualify for some amount up to $800. Let’s say the person qualifies for $500, but they only need $100. The payday lender may push the customer to take out the whole amount. In this case, they took out 300$, just to be safe against anymore unexpected expenses. So, they write out the contract and give the post-dated check, etc.

Now after this customer gets the money, regardless of reason for needed it, a few things can happen. The person can pay off the loan plus fees before the end of the contract or the payday lender can deposit the check and hope it clear. Let’s say it does clear. Everyone is happy and the customer can get another loan. But let’s talk worse case so I can illustrate my point.

If it doesn’t clear either to NSF or the client closing the account, then the customer gets some additional monetary problems. The fees start adding up from the bank and they customer is even in a worse place than before. So the client can hope that money falls from the sky, but it doesn’t. The client is may be forced to “do without” for a few weeks or maybe they need to go to another payday loan store to pay off the first loan. As you can see, this client is getting deeper and deeper into debt.

I am only talking about one creditor. What about this customers other bills and responsibilities? The customer begins to see the need for the payday loans and continues to borrow and borrow. Even with paychecks being stretched far already, people can have multiple loans on one paycheck. This cycle of debt is one reason (not the ONLY reason) why Ohioans are hitting hard times.

The payday loans companies thrive on the customer that keeps paying off their loan and coming back to get another one. They want the consumer to be in financial situation that depends on their payday service.

By: William R. Barnett on May 8, 2008
at 7:24 pm

Tara, not every store. 20 or more out of 100 stores will stay open. Also, title loans are coming to Ohio which will screw people out of their cars if people use this to get money. Yes, vendors will suffer but not that much.

By: Tom on May 8, 2008
at 7:31 pm

To answer your question, Tara, many companies survive on less than an APR of 28% with respect to loans. Auto loans and home equity loans are just a few to name.

Look at credits cards that offer 0% APR for a limited time and get you with fees. They hope you fail to pay your bill and time and then can charge you interest on the balance.

Let’s look at the payday lenders with an APR of 391%.

By: William R. Barnett on May 8, 2008
at 7:35 pm

william, you are basing all of your points on what your wife did while employed with advance America. you seem a bit nieve and close minded when make these points. lenders have come a long way and not all companies are as dirty as the one you seem to know so well. We try to tell you of improvements and regulations, even extended payment plans that HELP customers in need and yet you still throw around your lender lingo trying to sway people to be for the bill with mostly false information. you seem to be dodging main points and facts.

By: tara on May 8, 2008
at 7:39 pm

391% is annually - our loans are not.

By: tara on May 8, 2008
at 7:40 pm

Let me tell ya, I have never been pushed to take more than the 50 bucks I ask for. I was asked how much I needed to borrow and I told them. Nothing more was said about the amount.
I have never bounced no checks because i believe in paying my bills so none of that other stuff applies to me.
As far as me coming back, well, unless Im mistaken, isnt that how most places stay in busineess? Repeat business? I mean, if everyone goes to mcdonalds just once and never again…would they still be around? Even where I work, we depend on repeat business day in and day out.
I dont think most people go back every two weeks for a loan. Like me, most people i know who take payday loans get like one a month or every other month.
Even if i could afford it, i still wouldnt eat mcdonalds every week.

By: Latoya on May 8, 2008
at 7:44 pm

No, I’m basing my points on what I have been told by past and current employees in the industry. Even some of them work for other lenders than Advance America. I have reached my conclusion by reading the peer-reviewed research done by neutral parties on payday lenders as well. Lastly, I have been listening to some of the individuals that have been caught up in the cycle of debt thanks to payday loans.

I have cited several examples to this effect and provided links to other sources. You have defended your point from the mind of a scared employee in the industry afraid to lose their job. Your comments are heavily biased because you work in payday lending. Of course, this is what would be expected of a loyal employee.

By: William R. Barnett on May 8, 2008
at 7:48 pm

i was just as passionate about my company 1 year ago. I see customers on a daily basis, i know their troubles and i hear their relief when i can help them out. the past three years have been a fighting battle for me when it comes to people like you. because you dont need the services, you dont see the need for them or understand the people that do.

By: tara on May 8, 2008
at 7:53 pm

It’s obvious you haven’t read any of my posts. Clearly, you don’t have any concept of what I understand or see the need for in the community. I wouldn’t continue making speculations about “people like me”.

You can keep babbling on about how in your experience the payday industry is so great. If so, then why the proposed regulation? Why have other states enacted similar regulations? Why have other states banned the practice of short-term loans?

If the government is thinking the APR is way too high in OH, then look at some states with 400% plus or no cap. Pure price-gouging. Plain and simple. The regulation of payday lenders is just not an OH issue, but across the country.

By the way, I just saw a commericial on TV sponsored by CFSA. This is a hot topic in OH at the moment and is getting more attention.

By: William R. Barnett on May 8, 2008
at 8:35 pm

Here is an article from the Toledo Blade in 2005, around the time the loan cap was raised to $800:

http://www.toledoblade.com/apps/pbcs.dll/article?Date=20050509&Category=NEWS08&ArtNo=505090302&SectionCat=&Template=printart

By: William R. Barnett on May 8, 2008
at 8:44 pm

Im still allowed to vote yes? And Im allowed to vote for who I want still yes?
ok, if the bill makes it all the way through and the payday lenders have to shut down then all of us customers who didnt get a say in it and all our friends and family, and all the employees and their friends and family need to use our last remaining right to vote,…the next time those people are up for election or re-election, lets vote them out.
No, it wont change nothing for us but maybe a couple of them will have to find new jobs too?

By: Latoya on May 8, 2008
at 8:58 pm

Well it seems to me that Mr. Bennet is ill-informed and certainly not a business owner. I can tell you that all these businesses will close under such socialistic restrictions. What’s startling is that this legislation is being railroaded through the legislative process by the Republicans! I am a republican and I thought Republicans believed in free enterprise, free choice, and individual responsibility. I think what’s going on is just partisan politics. The Republican party is trying to look good to the average Ohio Citizen who doesn’t understand how the payday loan industry works and most of who don’t care. I’s easy to say “We’ve (the republicans) got rid of those preditory lenders”, because on the surface most people, other than the people who use payday loans, don’t understand that the fees are fair for both the borrower and the lender. The borrower gets to use the money for 14 to 30 days to solve financial shortages. The lenders gets to make a fair porfit of, on average, 8 to 9 percent.
The Republicans who voted on this need to be ousted and replaced with sincere republicans who will stand up for republican principles (free enterprise, free choice, and individual responsibility). We don’t need a nanny state. We need to get a Governor in Ohio who does’t talk out of both sides of his mouth. Strickland, a Democrat, wants to get rid of payday lenders. I can understand that, it’s typical of bleeding heart liberals. But at the same time he wants to expand the gambling in Ohio by having keno offered to the citizens. Now more low income folks can get trapped in a “cycle of gambling losses” since they’ve been saved from the “cycle of debt” that the governor claims they were in because of the payday loan lenders. Nice going Govenor! You have no moral principals guiding your thinking. What do you do? Simply try to get legislation passed on things that will please the most people and get you the most votes? I say you need to be ousted too.

By: Hugh Utterback on May 8, 2008
at 8:59 pm

So you’re suggesting getting even with the lawmakers by voting them out of office, if the bill is passed by the Ohio Senate? All because of payday lending regulations? Do you think it’s a good thing to dismiss all their other efforts in serving the public?

Vindictive much?

If you think the passing of the law is going to impact you that much, then you should contemplate the “hold” the lending industry has on you right at this moment. Maybe the real villans are the payday lenders because it sounds like you’re an addict needing a fix after your dealer got pinched.

By: William R. Barnett on May 8, 2008
at 9:19 pm

Here’s the list of the representatives (republican and democrat) that need ousted. They voted on HB 545. Latoya’s right - vote against them in the next election. I am tired of providing these folks with fat pensions and feathering their own nest. If they want to do away with 6500 jobs and take more than $200,000,000 out of our economy each year, because a small number of borrowers don’t understand that if you borrow money for two weeks that you are expected to pay it back on time! That’s right legislators, punish everybody because of the mistakes of a few.

Bacon
Batchelder
Beatty
Blessing
Bolon
Book
Boyd
Brady
Brown
Budish
Carmichael
Celeste
DeBose
DeGeeter
DeWine
Dodd
Dolan
Driehaus
Dyer
Evans
Fende
Flowers
Foley
Gardner
Garrison
Gerberry
Goyal
Hagan R.
Harwood
Heard
Hottinger
Hughes
Jones
Koziura
Letson
Luckie
Lundy
Mallory
McGregor J.
Newcomb
Oelslager
Okey
Otterman J.
Patton
Peterson
Raussen
Redfern
Sayre
Schindel
Schlichter
Schneider
Sears
Skindell
Slesnick
Stebelton
Stewart D.
Stewart J.
Sykes
Szollosi
Ujvagi
Wagner
Webster
Widener
Widowfield
Williams B.
Williams S.
Wolpert
Yates
Husted

By: Hugh Utterback on May 8, 2008
at 9:35 pm

Mr. Bennet,

No one has a hold on me unless I let them. I take responsibility for myself. You are obviously a bleeding heart liberal that expects the govenment to make choices for you and protect you from yourself. That’s all this state needs is another person that we have to nanny. Hum, let me see - where’s the diapers.

By: Hugh Utterback on May 8, 2008
at 9:46 pm

Please, if you’re going to call me out here, then at least spell my name correctly. It’s Barnett, not Bennet. If you wish to know my political affiliation, then I am a Democrat. I prefer to have a government that tries to protect its citizens and not harm them.

Let me guess. Another Ohio loan shark living in fear of closing shop?

By: William R. Barnett on May 8, 2008
at 10:12 pm

There’s been a LOT of lively discussion in this comment section in the week since I posted that picture to my blog.

I just wanted to take a moment to thank everyone for not putting anything in a comment that I’ve felt I needed to delete. Everyone is doing great at keeping the discussion civilized.

It’s been one week and there have been 725 views to this post alone in my blog and 87 comments left about this topic.

I, personally, ran out of things to say a while ago but I’m glad people are coming here to voice their opinions.

By: Craig on May 8, 2008
at 10:38 pm

Oh, I seem like an addict needing a fix because my dealer got pinched.
and Hugh Utterback is in your guess another loan shark living in fear of closing shop.

AS I STATED BEFORE…..i understand alot more of what you are all about. And it appears that iwas right.

And i didnt have to go to graduate school to read and feel your contempt between your lines.

By: Latoya on May 8, 2008
at 10:43 pm

Thank you Mr Hugh for the list of names, its much appreciated.

By: Latoya on May 8, 2008
at 10:45 pm

Latoya: You know very little about me. Don’t presume you understand anything about from this discussion.

By: William R. Barnett on May 8, 2008
at 10:59 pm

I know that you called Mr Hugh a loan shark and referenced me and or others as possible addicts needing a fix.
and thats all I need to know about you

By: Latoya on May 8, 2008
at 11:04 pm

Mr. Barnett, is your job secure?? Can you honestly tell me that if your company moved to Mexico, down-sized you right out of a job, or was bought out by another company uninterested in retaining current employees, that you wouldn’t be “scared”? Wouldn’t you try to defend your job fiercely? Wouldn’t you maybe post signs, rally at the state capitol or call whoever you needed to in order to save your job? I like my job! I like what I do! I like my company! And when I talk to my loan customers, they are so upset and it bothers me. Maybe you don’t know what it feels like. You want to talk about folks in other industries that have faced job-loss, but does that make it any less tragic, just because it’s happened before? Are you just callous to it because unemployment is so prominent in our state? You’ve avoided my previous mentions, but do you seriously think it’s okay that strippers, porn stars, casino owners and those in other seedy businesses will still be employed? You think payday lending should be rallied against above all others? Is this the biggest problem you see in our great state? I work in a very professional environment, I do my job well and I have some of the best customer service skills you’ll find anywhere. I’m comfortable in saying that. My customers are pampered!! Don’t you think that if someone should be complaining about these horrible companies, it should be them and not someone who’s on the outside peering in?

By: Kelly Johnson on May 8, 2008
at 11:33 pm

Latoya, I appreciate your willingness to apologize about the racial comments. That takes a big woman. I too enjoy your posts. I don’t feel this is about race. We have black supporters of this bill, black employees that will lose jobs and black people that will lose a credit option they need and want. But there will be many caucasians and other races in all of the above categories too.

By: Kelly Johnson on May 8, 2008
at 11:36 pm

Mr Barnett,

Voting for or against a Representative (the very title meaning they are supposed to represent the public) is part of Democracy. It is not vindictive to support those who will act in accordance to your views. Should this be the only thing to consider next election, probably not, but when Government regulations cause you to be put in the unemployment line, maybe you’d feel the same as employees of the payday loan companies feel now.
And by the way, you may want to read the information contained in the fiscal notes attached to the bill. They project an ANNUAL shortfall of 1,600,000 dollars in lost license fees, which should really help the budget deficit in Ohio. And yes, I know that total is if EVERY Payday loan store in Ohio closes, which they probably will.
It also says that the average pre-tax income for a Payday Loan store is $4.95 per 100 advanced. So, if you cut the fees from $15 per 100 to $1.07 per 100, the stores average pre-tax income become approximately a negative $10 per 100. Gee, wonder how long any business could stay open losing $10 for every $100 of product they sell. If Wal-mart, Target or McD