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.
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 McDonald’s had stores doing that kind of business, those stores would be closed immediately.
Here’s the link to that information and remember, this isn’t the industry’s numbers, it what the Government found:
http://www.lbo.state.oh.us/fiscal/fiscalnotes/127ga/HB0545HR.htm
By: Tom on May 9, 2008
at 12:36 am
Tom, I’m pretty sure that Mr B will not acknowlege any truth you put in front of him as long as it doesn’t coincide with his personal opinion. He’s not concerned with job losses or any other negative impact this bill will have. Because it will not impact him. Seriously I’ve spent time over the past three days defending my employer because soon I may not have one. What is he arguing for?
By: Kelly Johnson on May 9, 2008
at 1:12 am
And I agree. Vindictive is an incredibly poor word as applied to one’s political vote. It’s our right to vote for whoever we choose. It’s not a personal matter, as the word “vindictive” would imply. As Americans we have the right to excercise our vote, for or against the candidate of our choice. At the end of the day, they won’t go home with hurt feelings that you didn’t vote for them.
By: Kelly Johnson on May 9, 2008
at 1:15 am
I call it as I see it. I think vindictive is a good word to use. If the voters don’t get what they want, then there only course of action is try and remove them from office. They will do this out of spite and revenge because the senators didn’t vote the way the wanted on this issue. We have one poster that already put together a list. I am not saying it’s not their right to do so, but questioning the motivation behind it. It seems a little unfair many of you question the motivation behind my views. Yet, when someone argues in favor of your side, you rally to the cause. My opinions are just as valid as anyone else. It’s the same on the other side of the coin. For the people that have been hurt, whether directly or indirectly, by the payday loan industry, then this is there chance to “get even”.
I have read the notes on the bill and understand the pros and the cons. I understand what one faces when looking at unemployment, as I have been there in both the public and private sector. These are hard decisions to make for the senators. Both sides need to do their research very carefully on this one. Personally, I am choosing the lesser of two evils by supporting the proposed regulations on payday loans:
http://ohiocoalitionforresponsiblelending.org/
By: William R. Barnett on May 9, 2008
at 8:21 am
Here are some quotes gathered by the Ohio Coalition for Responsible Lending from the payday lending industry:
“And the theory in the business is you’ve got to get that customer in, work to turn him into a repetitive customer, long-term customer, because that’s really where the profitability is.”
Dan Feehan, CEO of Cash America, remarks made at the Jefferies Financial Services Conference (6.20.07)
“The secret to the success of the payday loan is its deceptive design. Specifically, we made the process very simple and easy at the front end to get people into the loan. But at the back end, we made it very difficult for customers to get out of the loan. It became a situation where our borrowers were like indentured servants, but with indefinite terms of servitude.”
– Cameron Blakely, former Check ‘n Go Store Manager at a Washington D.C. press
conference on Payday Lending. September 12, 2007
“We train our sales staff to keep customers dependent, to make sure they keep reborrowing, whether in the form of a renewal, or a back-to-back transaction, forever, if possible. We virtually guarantee customer retention by encouraging customers to borrow up to 85% of their gross income – that is, more money then they actually receive in their take-home pay. In Virginia, our policy is to loan 100% of gross income.”
– Micheal Donovan, former district director of operations for Check ‘n Go, at a
Washington D.C. press conference on Payday Lending. September 12, 2007
“We were trained to access customer’s bank accounts to see if there was money in them
to pay us by using their account numbers and Social Security numbers, dialing into the automated line and essentially usurping their identities. We could track their purchases, see where they shopped. We would use this information to collect on our debts, making
customers think that we knew where they were all the time and that they couldn’t escape
us. I believe that payday lending is a corrupt and corrupting business.”
– William Harrod, former Check ‘n Go Store Manager at a Washington D.C. press
conference on Payday Lending. September 12, 2007
By: William R. Barnett on May 9, 2008
at 9:03 am
Mr Barnett,
I am not and have not said your views are not valid. You are an American, with the right to form your own opinions and make your own choices. I just wish that the customers of these places had that right as well. There must be some middle ground on this issue instead of the all or nothing approach now in the Ohio Senate. Something that would still enable these companies to offer the payday loan service, yet with needed reforms and protections.
Also, keep in mind the customers may have a thing or two to say to their representatives when this option is gone and they start feeling the pinch and find no place to turn to for help. That’s why I think this issue needs to be placed on the Ballot at the next General Election so that ALL Ohio can make their choice.
By: Tom on May 9, 2008
at 9:38 am
You hit the nail right on the head. Customers and payday lenders are frustrated they cannot vote on this issue. Yet, it’s not up to “Ohio” to make the decision. The State is responsible to set the regulations, as they have have done in the past. Payday lending is OH never existed before 1995 and now it’s time to reform the laws.
Also, if you don’t think Ohio has spoken on this issue, then you forget the senators representing your district were voted on “by the people”. These are the individuals that were elected to carry out this decision (among many others). I encourage ALL of you to express your views with your respective senator.
By: William R. Barnett on May 9, 2008
at 9:49 am
My point with some people not validating my views was this: Just because I am have not either taken a payday loan or worked in the industry, then I don’t have a right to speak out against it. Many of you want to make the argument that I need to be an “active participant” and not a third party to post. Many of you are using your personal experiences to support your claims. I am doing the same and backing it up with the testimony of others that have worked first hand in the industry.
By: William R. Barnett on May 9, 2008
at 9:57 am
just a question…i was at the rally on tuesday and supported the company in which i work for…ive been off, did the bill go up for another vote? and if so what was the result? thanks!
By: manda on May 9, 2008
at 10:05 am
Here is a link to some of the testimony that the State heard on payday lenders and two statements from former Check N’ Go employees in the DC area. There is also a You Tube video from another former employee in VA. By the way, Check N’ Go is headquartered in Mason, OH:
http://ohiocoalitionforresponsiblelending.org/needorgreed.htm
Many of the stories from former payday lenders mirror my own personal experiences here in the Toledo, OH area. If it’s happening in other regions in OH and the US, then it’s probably more widespread that most are willing to admit.
Now before some of you start throwing a fit. I realize that your store may not operate like these examples. That is the exception to the rule in my opinion. Do you really know what your middle-managers and corporate execs discuss behind closed doors?
By: William R. Barnett on May 9, 2008
at 10:23 am
House Bill 545 was passed by the Ohio House last week and was introduced to the Ohio Senate. I believe the Senate Bill is 319.
By: William R. Barnett on May 9, 2008
at 10:33 am
Kelly:
According to the people in support of this bill, you are a loan shark (and other nasty things they say) and I as a customer is a preyed upon person who isnt capable of making my own decisions. They say i need protecting and i need financial classes so I can learn how to budget my money.
These are the things that really makes my hair stand up on end! How can i take what they say seriously when they call you names and try to paint customers as nimwits who cant take care of ourselves.
Voting against people who dont support the voters opinions is not vindictive. Its one of those American freedoms each of us are given. Just like the supporters of the payday bill have the right to vote for the people who support their own views.
I wont be voting for Obama because he doesnt support things i believe in. Someone else does though. Does that make me vindictive? I think not.
By: Latoya on May 9, 2008
at 12:03 pm
How can you dismiss the testimony of former payday lenders and not take it seriously? These are people that for whatever reason feel a sense of duty to report he wrong-doings of their former employers. I don’t think they are saying ALL or EVERY SINGLE payday lender is a crook, but the evidence has been stacking up for years against the industry. City councils in some area of OH have adopted law to limit the number of payday lenders in their community.
If I am correct. Some of the current payday lenders are painting their customers as “nimwits”. Their argument is “we didn’t pressure them into it and it’s their own fault for using the service”. Or other statements to the effect of, “it’s the clients fault if they cannot manage their money”. These short-term lenders feel no sense of guilt and continue to exploit their customers in favor of profit.
Your situation may be different, but don’t forget the typical client in OH that takes out 12.6 loans per year with an average loan of $328 . More than 300,000 Ohioans are trapped in the debt cycle.
By: William R. Barnett on May 9, 2008
at 12:34 pm
I really cant think of one company that doesnt exploit customers to some degree or another.
And yes, it IS my fault if i cant manage my money.
Utility companies exploit us.
Credit card companies exploit us
Car dealerships exploit us
Every business will do what it has to do to maximize their profits, regardless of who gets exploited. Some are worse than others.
I hate the makers of alcohol. People become alcoholics on the product. The companies know this, yet they keep on making it and keep on trying to sell it to you. People drive drunk and kill other people. Why doesnt the state protect us from that by doing something to shut down the sale of it?
After all, the alcohol has a (hold) on you far worse than your payday lender does if you become a alcoholic.
Your situation may be different but dont forget the typical alcoholic buys a bottle each and every day. Thats 365 days a year times however much a bottle cost. And some of those drinkers wreck and kill people. Those alcohol makers know this but continue to exploit the drinkers and feel no sense of guilt about the people killed.
Same goes for tobacco companies. But they are still allowed to sell tobacco so the state gets its taxes and such from them.
I may not be the brightest crayon in the box, but Im bright enough to see that the state makes allowances for companies they get alot of money from.
Maybe the payday companies didnt put enough revenue in the states accounts?
By: Latoya on May 9, 2008
at 12:54 pm
Well William Barnett I am for any legislative action that would put the company you own\work out of bussniess because they’re raping the public.
FYI if you get a hundred dollar loan for two weeks and get another loan from another company to pay it off that would cost you $30 on that original 100 loan. Thats 30% of original amount loaned. Some credit card companies high interest rate is 32%. And APR(ANNUAL percentage rate) doesn’t really translate because credit card companies charge interest on interest for the whole year. Where as at a short term loan place there is no interest charged for missing a payment.
(and no the different payday loan companies aren’t in it together thats like saying all car manufactors are in it together because your car broke down)
By: A_Blind_Eye on May 9, 2008
at 1:19 pm
So basically you’re saying it’s OK to be exploited by companies because you were just a pawn for maximizing their profits? So, you would be OK with a company dumping toxic waste in your neighborhood because it’s just cost effect business for them?
The state stands to lose 1.6 million is license fees, if this bill passes. I don’t know, but that seems like a hefty loss.
Food for thought: In 2006, the State of NC closed down payday lenders. In a report by the Univ. of NC, the found that:
* The absence of storefront payday lending has had no significant impact on the availability of credit for households in North Carolina. The vast majority of households surveyed reported being unaffected by the end of payday lending.
Households reported using an array of options to manage financial shortfalls, and few are impacted by the absence of a single option – in the case, payday lending.
* More than twice as many former payday borrowers reported that the absence of payday lending has had a positive rather than negative impact on their household. The ban on payday lending has made no difference to most, and helped more households than it has harmed.
* Payday borrowers gave first-hand accounts of how payday loans are easy to get into but a struggle to get out of. These borrowers universally agreed that the cost of payday loans was excessive.
* Nearly nine out of ten households surveyed think that payday lending is a bad thing. This overwhelmingly negative view of the product did not vary significantly for households that had experiences a financial shortfall.
I think I’ll sit back and let you ponder that with a nice glass of wine. Oh wait, I might get hooked…
By: William R. Barnett on May 9, 2008
at 1:21 pm
Drinking this early in the day???
Thats right, you might get hooked, so I reckon Im going to have to start a group to help save you from yourself and the spirits you drink.
Check this out….
I could post tons of articles from thousands of sources about why alcohol is bad for you and why you shouldnt drink and why Ohio should become a dry state. Are there any dry states?
But Im not, because you are an adult. Its your decision if you drink. NOT MINE. And im not going to lobby my reps to abolish alcohol and your right to drink. No matter that alchol destroys lives, destroys marriages, destroys livers and kills innocent people.
I dont care if you want to be a pawn for the liquor makers and help the wine makers make a good profit.
Cause your a big boy and you have the right to make that decision for yourself.
Cant you see the parallels on all these issues?
you have rights we have rights
you have the right to drink your wine. I should have the right to have a payday loan.
Would you respect me more if i never used payday loans but drank everyday?
By: Latoya on May 9, 2008
at 1:37 pm
Keep on topic. Your campaign to abolish alcohol probably needs to be discussed in another forum. The government tried Prohibition once and it failed miserably. I just find it odd that you are so adamant against liquor, yet you wouldn’t lobby against it. Whoa! Payday loans. That’s something to tell your senator about!
This has nothing to do with respect. You want to make this freedom of choice, but in the name of that, many payday lenders are exploiting their clients everyday. Their underhanded tactics are preying on the financially weak. How many more committees need to be assembled and people testify to at those hearings?
I supposed I should tell Davis-Besse to drop those spend radioactive rods in your garbage can tonight? Exploit for profit…
By: William R. Barnett on May 9, 2008
at 1:47 pm
the author of this page has no idea what he is talking about. Will the next target be Rent to Own stores? Or how about your local bank charging $30 bounce fees and clearing larger checks first to produce more fees. Let the ohio consumer decide if they want to use payday loan stores. If you dont want to stay the hell out of my shop, but if you do I open the door to welocme you in. I pay my taxes, licence fees, intangible taxes, Ohio CAt tax which many that have posted her have do idea what these are. If there is no need the stores will go out fo business, supply and demand.
By: Bob on May 9, 2008
at 1:59 pm
Latoya You should check out http://www.cohhio.org/advocacy_responsible_lending.php
Which the Ohio coalition for homlessness and housing in ohio who I am assuming set up the ohio coalition for responsible lending since it’s on their site. Well on the site it has the NEW site for OCRL wich is called OHIODEBTTRAP.ORG. This site lists its backers too. Well ohio has some of the biggest forclosure rates in th nation and state donates a loty o money to rehab, and first time home owners and the such. A LOT of the organizations that support the OCRL are government funded organizations that are in housing industry. If you read the bill in it’s entireity there are admendments for the banks and non-profit organizations do short term lending under the new law. The banks can do this now but don’t. Well this admendment for the banks is listed under a section that allows banks to make short term loans\payment arrangments to stay out of foreclosure which they usually don’t. This bill would effective force you to get a loan from a government backed organization because of the change no private company could stay in bussiness. AND the sentate just released their anaylsis saying that people could go to “other” short term lenders and this would make no impact on revenue license fees for the state. Oh yea this new bill would give more money to government back organizations. It’s called uncle some wants a peice of the pie. Look at alcohol tobacco etc. I’m not surprised, just feel jaded.
By: A_Blind_Eye on May 9, 2008
at 2:00 pm
I wont lobby against it because as I said before, over and over again….its your right to drink if you want.
If you wish to live where the goverment tells you how to live, how to think, what your choices are, thats your business.
I dont buy into all this social engineering crap that keeps being flung around.
I work for my money, I will decide how its spent.
Put the information out there and let the people decide if its right for them or not.
No different than me deciding not to drink or smoke. My choice to partake or not.
Do you need me to help protect you from the ill effects of alcohol?
I didnt think so.
I dont need you to protect me from the ill effects of payday loans.
The bottom line isnt about your drinking or my using payday loans.
Its about our freedom to choose what we partake in.
By: Latoya on May 9, 2008
at 2:05 pm
You know, people are going to start thinkin that we is married Mr Barnett, the way we argue and all.
But thats ok, Ive grown kind of fond of you
By: Latoya on May 9, 2008
at 2:07 pm
You assume that profit is exploit and then try to reverse it to exploit is profit. They are not the same thing. Do you agree with gas prices? If you don’t buy a Honda. Oil companies only make 4% profit.
By: A_Blind_Eye on May 9, 2008
at 2:12 pm
So, if I follow your thinking it’s OK to for any company to do anything they want because it’s their choice to do so. The government doesn’t need to protect us. So let’s just all give up and do what we want…
If your employer fired you today based on your race, then would you be OK with that decision? After all, your employer made a choice and saves money by not having to pay your wage anymore. You probably wouldn’t want the government to help you exercise your rights under anti-discrimination laws. Would you just go about your business and shrug it off?
The information is out there and it is not up to “the people to decide”. It is up to the State of OH to make the laws and in this case, reform the current practices. Yes, it is different than making the decision to not drink or smoke. In regards to that, the government sets the legal age to do both. The only thing you can do is talk to the senator in your district. The quicker you understand that it’s neither you or I that can vote on this issue, the better off.
By: William R. Barnett on May 9, 2008
at 2:20 pm
This is a forum to voice our opinions. This probably won’t be heard by the people that matter in the issue. Nonetheless, it’s been civil other than the occassional labeling of others. Most of us must “agree that we disagree” and nothing more or less.
By: William R. Barnett on May 9, 2008
at 2:23 pm
There is a big difference in telling me i cant work somewhere because of my race and telling me i cannot have a payday loan.
I get that. Most fifth graders could get that.
Why cant you?
By: Latoya on May 9, 2008
at 2:38 pm
Race is NOT a choice. And if my employer decided not to pay me I WOULD get another job. If Walmarts wages and practices don’t suit you don’t work\shop there. It’s called capitolism. Democracy is not the same thing. It’s called being responsible for your actions. That means you take action and not tell others to take it for you. I don’t feel Dr. Martin Luther King would have agreed with you and the peoples voices not being heard. Most of us would agree that we disagree but there is nothing regulating you from an opinion. You neither have to be educated nor logical nor have morals to form an opinion. So does majority mean it’s right? At one time it was a fact that the world was flat. Do you give up a fight because you can’t win? I know of people who fail 65% of the time and are considered heros to some. Yes democracy is good but not perfect.
By: A_Blind_Eye on May 9, 2008
at 2:41 pm
You should read the review from the senate finacial commitee. The bill would enable the state treasurer to give out short term loans.
By: A_Blind_Eye on May 9, 2008
at 2:46 pm
Why is it that different? You don’t want the government making decisions for you. You want personal freedom. Maybe your employer wants that too and will fire you and say, “Hey, personal freedom!”
How about we don’t have a cap in the state and the payday lenders can charge what they want. So your $50 now has a fee of $15.00 or more. You might argue, “Well, no one would us that service”. Ah, but if it’s the only game in town and either way you really need the money. So, you’ll probably continue to use the service.
I might provide examples that are on the extreme, but you want to discuss freedom of choice. If the government doesn’t step in at times, then the above scenario might happen. Maybe next times it’s worse. Maybe instead of 300,000 Ohioans in debt due to payday loans, it’s 500,000. Maybe this is the time to start end it.
By: William R. Barnett on May 9, 2008
at 3:03 pm
I am tired of having a battle of the wits with an unarmed person.
I sincerely hope that someday the goverment doesnt try to ban or limit something that you wish to keep.
By: Latoya on May 9, 2008
at 3:18 pm
I have provided more than enough evidence to support my views. You provided very little to back your side up. Good luck in your endeavors!
By: William R. Barnett on May 9, 2008
at 3:22 pm
If I got fired I would find another job. I said that previously. This is a matter of principle. You said your self they are all over did you not? You even talked of credit cards. So no they are not “the only game in town”. You are not providing examples you are providing IFs. Let’s not play IFs cause what IF this is the matrix.
When you owe someone money it’s considered debt (according to Webster). So I would guestimate that 95% of Ohioans are in “debt”.
Discussing freedom of choice doesn’t mean you need to make up extreme scenarios. If we think we should let the government make extreme choices maybe they should have taken my drivers license away last year when I got a speeding ticket doing 10mph over the speed limit because next time I might be doing 100mph over the speed limit and lose conttrol and crash through a playground and kill 20 kids. Have you ever had a speeding ticket? Do you want the government to go to extremes? What if what if.
I think the government should take away your job and turn around and open up shop. (And just to prevent any comments on that if you do currently work for them that would still be a plausable)
By: A_Blind_Eye on May 9, 2008
at 3:32 pm
huh?!? IFs are not the same as examples. Apples are not oranges. Computers are not elephants etc. Besides you need NO evidence to have a view. I’m talking about law and democracy. I will not call you names though, because in America you have the right to an opinion. For example: I don’t like the name William R. Barnett so in my opinion I think the government should make you change your name. See it’s that easy to have an opinion.
By: A_Blind_Eye on May 9, 2008
at 3:43 pm
I just want to clear this up with anyone who reads this ever. A ONE time FEE of 15 dollars on a 100 dollar loan IS a one time FEE of 15 dollars on a 100 dollar loan NOT 391% APR interest. APR means ANNUAL percentage rate. If anything a 15 dollar FEE on a 100 dollar loan would be 15%. What if you went to the store and bought a gallon of milk and they said the price would be $1100 dollars for the year?
By: A_Blind_Eye on May 9, 2008
at 3:55 pm
The Buckeye Institute
PAYDAY LENDING DEBATE
Consumer Choice vs. Over-Regulation
By Marc Kilmer
(614) 224-4422 88 East Broad Street, Suite 1120, Columbus, Ohio
Policy Brief
January 28, 2008
http://www.buckeyeinstitute.org/docs/Payday_Lending_Study.pdf
You all need to go read this study
The conclusion of this study was….
It is undeniable that payday lending has a
bad reputation. It is also undeniable that it
is popular among borrowers. Those who
oppose payday lending try to reconcile
their inability to understand its popularity
by portraying borrowers as too financially
ignorant to realize the evil of these loans
and lenders as purposefully preying on this
ignorance to trap borrowers in a cycle of
debt.
As the facts show, neither portrayal is
accurate. Most borrowers make a rational
choice to take out a payday loan. For
many, they are willing to pay the fees in
exchange for the convenience of the
service. For others, it is the best
alternative to obtain the financial help
they need. Whatever their reason, though,
these borrowers know their situations
better than either advocates or politicians
who oppose their right to take such loans.
In a free market, people should have the
right to make financial decisions for
themselves. Unless a businessman is
engaged in fraud or is coercing people to
use his product, there is little reason to
ban him from entering into a voluntary
transaction with a customer. Someone who
offers payday loans is not forcing anyone to
obtain a loan from him. He is merely
offering a service that is voluntarily chosen
by his customers. Politicians and selfappointed
advocates should not presume
that they know better what is good for
these two individuals.
Marc Kilmer is a policy analyst with the
Buckeye Institute.
By: Latoya on May 9, 2008
at 4:49 pm
a couple of excerpts from the above website
Looking at this debate without the rhetoric
about “predatory lending,” “distasteful”
loans, and other overheated charges, one
can see that it is essentially a debate about
how much credit should cost. When one
surveys the credit market, it is clear that
there are different
types of credit for
different needs. There
are also different types
of credit for different
socio-economic groups.
People in the upper
and middle class
generally use credit in
the form of mortgages,
student loans, car
loans, and other longterm
loans with low
interest rates.
People in a lower socio-economic class,
however, may need different types of credit
or may, because of their circumstances,
have only certain credit available. For
instance, if you own a home and default on
your mortgage, the lender gets the house.
The low interest rate on a mortgage
reflects that fact. But if you have few or no
assets to secure a loan, your interest rate
for that loan will be higher as a result.
Credit differs by the type of loan requested
as well as the person requesting it.
Because of the variety of variables
involved, there is no standard one can use
to determine what constitutes a “fair” loan.
Both borrower and lender are taking a risk
in such a transaction. If the borrower and
Policy Brief
People in a lower
socio-economic class
may need different
types of credit or may,
because of their
circumstances, have
only certain credit
available.
Payday Fees in Perspective
Payday loans fees often help
borrowers avoid higher fees.
Payday Loan Fee* $15
Utility Reconnection $20
Bounced Check Fee $30
Telephone Reconnection $50
Cable Reconnection $100
Source: Ohio Consumers Counsel, Buckeye Cable System and
the Consumer Credit Research Foundation.
*Payday loan fee based on $100 borrowed.
By: Latoya on May 9, 2008
at 4:53 pm
another excerpt:
What will happen if these businesses are
shut down? Both North Carolina and
Georgia recently banned payday lending. A
staff report from the Federal Reserve Bank
of New York indicates that this ban, far
from helping people who would have
otherwise used payday lending, actually
hurt them:
In sum, what we saw in Georgia
after the ban was more bounced
checks, more problems with
lenders debt collectors (informal
bankruptcy), more bankruptcy
under chapter 7, but lower
bankruptcy under chapter 13. Here
is how we interpret those facts.
The contraction in payday credit
supply caused former borrowers to
bounce more checks, thus
aggravating their already marginal
circumstances. To stave off
bankruptcy, distressed borrowers
pawned or sold assets. For those
who ultimately succumbed to their
financial problems, the loss of
assets made chapter
7 the natural choice.
Others slipped into
informal bankruptcy
(defaulted without
filing). Though sad to
say, that slipping
down, with less
rescheduling of debts,
but more “deadbeats”
and “no asset”
bankruptcies, seems
to fit the picture a marginal
payday customer pushed over the
edge.
Overall, the results for North
Carolina are mostly consistent
with the results for Georgia, and
mostly inconsistent with the debt
trap hypothesis.32
By: Latoya on May 9, 2008
at 5:00 pm
From Business Week
http://www.businessweek.com/magazine/content/07_51/c4063finance749937.htm?chan=magazine+channel_what%27s+next
December 17, 2007 Issue
A Second Look at Payday Loans
Payday lenders get a bad rap for charging exorbitant rates on short-term loans. But according to Donald Morgan at the Federal Reserve Bank of New York, they may be better lifelines for cash-strapped consumers than other options.
He studied households in Georgia and North Carolina, states that banned payday lenders in 2004 and 2005, respectively. Since then, consumers in those states are bouncing more checks, lodging more complaints about debt collectors, and filing for bankruptcy more frequently. In Atlanta the Federal Reserve reported an additional 1.2 million bounced checks.
Payday advances may not be ideal, the author argues, but the alternatives are worse. Without that option, consumers may be resorting to banks’ overdraft protection or loans from pawnshops, which usually charge higher interest. Or even worse, they just don’t pay their bills.
—By Jessica Silver-Greenberg
By: Latoya on May 9, 2008
at 5:09 pm
from Business Week
December 17, 2007 Issue
A Second Look at Payday Loans
Payday lenders get a bad rap for charging exorbitant rates on short-term loans. But according to Donald Morgan at the Federal Reserve Bank of New York, they may be better lifelines for cash-strapped consumers than other options.
He studied households in Georgia and North Carolina, states that banned payday lenders in 2004 and 2005, respectively. Since then, consumers in those states are bouncing more checks, lodging more complaints about debt collectors, and filing for bankruptcy more frequently. In Atlanta the Federal Reserve reported an additional 1.2 million bounced checks.
Payday advances may not be ideal, the author argues, but the alternatives are worse. Without that option, consumers may be resorting to banks’ overdraft protection or loans from pawnshops, which usually charge higher interest. Or even worse, they just don’t pay their bills.
—By Jessica Silver-Greenberg
By: Latoya on May 9, 2008
at 5:12 pm
Taxpayers’ Union Opposes Loan Prohibitions
The national union of American taxpayers has spoken out against a proposed cash advance lending prohibition in the state of Ohio. Representative William Batchelder’s plan to cap payday loan interest rates at just thirty-six percent annually has gathered no small amount of critical support, but it also has its detractors. Among those is the National Taxpayers Union of Washington, D.C. The union opposes the fast cash loan interest rate cap, which would constitute a de facto restriction against the industry by forcing lenders to go out of business, on the principle that it limits the free market and marginalizes consumers.
The union sent an open letter to Ohio state lawmakers denouncing House Bill 333, and posted a copy of the pro-payday loan missive on its web site. The letter calls upon Buckeye State legislators to “put their trust” in the common sense and personal responsibility of fast cash loan consumers, and to show their faith in the all-important free market. The union wants lawmakers to understand their belief that cash advance personal loans represent a “sound financial option” for cash-strapped consumers, who might otherwise fall prey to the much-more-expensive trap of bounced check fees and/or high-interest credit card rates.
The union believes that, at the core of the cash advance lending debate is the question of whether consumers ought to be allowed complete autonomy over their financial choices. Lawmakers should commit fully to the American ideals of self-determination and preserve constituent’s right to credit options. Fast cash loans, regardless of their expense, represent such an option to Ohioans, and ought not to be removed.
By: Latoya on May 9, 2008
at 5:24 pm
I guess it’s just a big conspiracy against payday lenders. None of the testimony was accurate. Every former employee lied about the unethical and immoral acts against the consumer. If you believe that, then we can pass out the foil hats.
The same old argument from payday lenders. “We’re just providing a service”. While behind closed doors they’re thinking how they want to keep you in their web of lies. More freedom of choice babble with the added “unless they are engaging in fraud” The problem is there is very little recourse for a client that has been exploited.
I like the statement “people in upper and middle classes…” Isn’t this a direct contradiction that they don’t just focus on the lower socio-economic class? Give me a break.
By: William R. Barnett on May 9, 2008
at 5:24 pm
The payday lending industry’s lobbying message is clear, “Payday advances should be used for short-term financial needs only, not as a long-term financial solution.” But their goal, in fact their very survival, requires that they pull their occasional customers into a cycle of repeated loans over the long term. Never mind that the customer’s original intent was only to borrow a reasonable sum and only until their next payday.
The reports from publicly owned payday lenders reveal the dimensions of Ohio’s payday lending industry and the extent to which customers become ensnared in repetitious loan transactions. These repeat payday borrowers drive the payday loan business model and finance the alarming expansion of payday storefronts across the state.
In this report we find that:
* Ohio payday borrowers pay over $318 million in payday loan fees annually
* The average payday loan is $328 with an average APR of 391%
* The average Ohio payday borrower takes out 12.6 loans per year;
* Over 300,000 Ohio payday borrowers are ensnared in a payday debt trap1
* The payday lending industry actively encourages repeat borrowing and is dependent upon its ability to lure most of its customers into this devastating debt trap.
The payday lending industry’s survival requires that it lead most of its customers into a wave of successive two-week loans. This is a particularly oppressive form of highinterest lending, and damages all of Ohio’s residents.
Ohio’s usury laws were amended in 1995 to specifically enable payday lending to Ohio’s citizens at triple-digit interest rates. A decade later, it is clear that the exemption for payday lenders was a mistake.
By: William R. Barnett on May 9, 2008
at 5:27 pm
Hey, you said i presented no evidence to support my views so i found things that support my views and you still got to rip on me and everything i present here.
You, Sir, are a (insert bad word here)
By: Latoya on May 9, 2008
at 5:34 pm
I can refute your claims anytime I wish. I am sure people will be trying to so the same to the evidence I presented today. I don’t agree with you and you don’t agree with me. That is the bottom line.
By: William R. Barnett on May 9, 2008
at 5:40 pm
I have read with much interest the back and forth banter between the Pro and Con sides of this debate. It strikes me as very odd that the employees of the lenders would continually comment about their customers in a very familiar way. Wasn’t the term of the loan only two weeks? If that is the case, and company policy holds, then this customer will never be in again. Hardly enough time to know someone by their name. If one is familiar enough to know a customer by name and sight, then it stands to reason that the customer is a continual REPEAT customer. If so, then the “predatory” APR argument begins to take merit. Early in my career, I was told that if it quacks like a duck, and walks like a duck, then it probably IS a duck! By most of the employee’s own posts here, the customers are not a single transaction, rather they are continual customers on a bi-weekly or monthly basis. Notwithstanding the potential for unemployment, employee’s would be able to most probably secure employment in another “heavily regulated” industry…..banking. Last time I checked (and I DO CHECK), financial services companies such as banks are CRYING for trained employees. Check Craigslist, Monster, Hotjobs, Careerbuilder, and your local newspaper…….there are MORE than 6000 positions open for the qualifications you have. Regarding treating customers with respect, once one is “out”of the cycle and in collections, in many cases all bets are off. I have legally recorded telephone conversations from the “courteous” collectors of the industry. Threats of arrest, physical violence, and a PROFOUND disregard for applicable law are unfortunately more common than not. Perhaps your company was the exception to the rule. If you disagree with this, I can provide copies of the recordings….make up your own mind. In general, I have a very “libertarian” philosophy….the less government intervention the better. However, the purpose of government is to promote the common good, and Payday Lending is not it.
By: Rod Farthing on May 9, 2008
at 6:32 pm
Well said, Rod.
By: William R. Barnett on May 9, 2008
at 7:05 pm
WELL ,CRAIG I THINK YOU STIRED UP A HORNETS NEST. THIS WILL KEEP YOU BUSY.
MAKA
By: DIANNE RENEGER on May 9, 2008
at 8:06 pm
Mr. Barnett, consider the following please:
I am about to overdraw my checking acct. by $15. I can either let my acct. overdraw and accrue overdraft fees($38.00 each check, $6.00 a day) or I can go to Cashland and borrow $50.00 for $7.50. If I am a smart consumer I only borrow what I can pay back. A responsible lender only loans what they can get back. The minimum wage in the state of Ohio is around $6.85 or something like that. I currently make $9.75 as a teller at a payday loan company. Who will pay me $9.75 as a starting wage with a cashiers experience? This is all I have done for the last 5 years.
By: Joy on May 9, 2008
at 8:10 pm
Why do you think that payday lenders are sharks? My company does strive to keep NSF’s low, but that benefits the customer in many cases. Social security customers may only get $300(if they qualify for it) They are always due a few days after they get their check. They are guarenteed up to 30 days. My company offers, in addition to the Extended Payment Plan, a free extention on a loan. The customer may call and add an extra week or two to their 14 day loan. We really dont want people to go NSF because it messes them up more than the loan itself does. I have used this service personally and I endorse it fully.
By: Joy on May 9, 2008
at 8:20 pm
Are you taking this too personally, Rod? Sounds like a wrath with a vengence. But werent you grateful when you needed the place, when you got the cash you needed and damn the expense. I see now.
By: Joy on May 9, 2008
at 8:27 pm
here is a question then. without pay day lenders, where will people in need receive help?
By: tara on May 9, 2008
at 8:46 pm
I’m not sure if this is still valid, but this was on HB 545 when it was introduced:
Authorizes state chartered banks, savings and loans, and credit unions to make loans per the terms and conditions of the Short-Term Lender Law.
Provides special conditions for nonprofit corporations to obtain a license under the Short-Term Lender Law.
By: William R. Barnett on May 9, 2008
at 8:55 pm
as stated earlier…
“But HB 545 DOES give the banks a choice—if you read it, CREDIT UNIONS ARE ALLOWED TO CONTINUE TO GIVE PAYDAY LOANS OF 30 DAYS OR LESS at 10$ 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?”
By: tara on May 9, 2008
at 8:59 pm
I thought payday lenders are never concerned with the APR? Pfft. 391% on your loans. Oh, don’t worry about that. It’s just $15 on $100. and you can get another loan. In matter of fact, I am going to keep lending you the same $100 every two weeks and charge you the max. rate I can according to law.
The argument from the short-term lenders is that they MUST have a rate of 391% to be profitable. Please…
By: William R. Barnett on May 9, 2008
at 9:06 pm
thats not true at all. ive state before that cashland has been working on a compromise. they have stores in indiana with very different laws and percentages. having a 391% apr isnt what everyone is whinning about (because that doesnt even count. it would be fair to make statements about 391% apr if these loans were annual loans, which they at not. they can not be extended out that long.) its the 28% apr that is disturbing! the senators know that this rate will shut down all lenders in ohio and seem not willing to compromise.
For many people, payday loans are the right option for borrowing money. Consider the alternatives. Fees for bouncing a $100 check can cost more than 4 times a payday loan. The cost of getting a $100 cash advance on a credit card can be more than 2 times the cost of a payday loan.
* $100 bounced check with $54 NSF/merchant fees = 1,409% APR
* $100 credit card balance with a $37 late fee = 965% APR
* $100 utility bill with $46 late/reconnect fees = 1,203% APR
of course there are regulars in the business. but do you honestly believe the option should be completely eliminated for anyone needing a little extra cash – even if they only did it once? should no one have that option?
By: tara on May 9, 2008
at 9:13 pm
Another point is $15 on $100 seems to be an intriguing offer. This would be fine if a client only comes in once. The sad thing is the average client in OH is coming in almost 13 times a year. It may not be to your store every time. Your clients may have multiple loans out at other your competition. Sometimes they take out another loan to pay off yours. I will say it again: 300,000 Ohioans are trapped in the cycle of debt BECAUSE of payday lenders.
Do you honestly think that the payday lending industry doesn’t profit off the repeat customer. Do you think taking out a loan on people that are already financially strapped is ethical? You know these people are desperate or they wouldn’t be in your store looking for some quick cash.
By: William R. Barnett on May 9, 2008
at 9:19 pm
what do you suggest then? people come to us for a reason. what if the bank wont give them a loan – what then?
By: tara on May 9, 2008
at 9:23 pm
so i will be able to get 1000 for 10 bucks on the hundred from a bank????
whats that apr work out to be, can someone tell me?
By: Latoya on May 9, 2008
at 9:24 pm
You can continue to use the argument that Cashland is doing so much good for the community. That might be true, I don’t know. What you fail to realize is many in the industry have ruined it for you. Instead of pointing the finger at the government and saying, “shame on you”, you need to point it at your own industry. The blame lies with the corrupt corporations operating short-term lending stores. I believe it when most of you say there is nothing unethical about your business. It’s usually the CSRs and the local managers that are unaware of the wrong-doings of the higher-ups.
My many quotes of the day:
“And the theory in the business is you’ve got to get that customer in, work to turn him into a repetitive customer, long-term customer, because that’s really where the profitability is.”
Dan Feehan, CEO of Cash America, remarks made at the Jefferies Financial Services Conference (6.20.07)
By: William R. Barnett on May 9, 2008
at 9:31 pm
and it goes unanswered…
By: tara on May 9, 2008
at 9:33 pm
Why are people more likely to get credit cards after a bankruptcy? The credit card companies have repeat customers also. Some of our repeat customers use payday loans to supplement their incomes, which are not sufficient. I have seen customers who bring in only $540 a month in social security benefits and payday loans are their only means of survival. Why is it hard for you to believe that most people who use this service are satisfied with it?
By: Joy on May 9, 2008
at 9:33 pm
Tara, who owes Cashland?
By: William R. Barnett on May 9, 2008
at 9:36 pm
Owns…sorry.
By: William R. Barnett on May 9, 2008
at 9:36 pm
im asking you your opinion? what are people to do when they cant get a bank loan?
By: tara on May 9, 2008
at 9:37 pm
To avoid payday lenders like they were the plague. I will answer my own question then. Cashland is owned by (drum roll) Cash America. They are own the largest pawn lending in the US and payroll (check cashing) company. The CEO is Dan Feehan, who said:
“And the theory in the business is you’ve got to get that customer in, work to turn him into a repetitive customer, long-term customer, because that’s really where the profitability is.”
By: William R. Barnett on May 9, 2008
at 9:41 pm
i get it. i wasnt avoiding your question, just didnt feel the need to state the obvious. you offerer no alternative solutions. you only care that the places no longer exist.
By: tara on May 9, 2008
at 9:44 pm
Dan Freehan is the Cheif Executive Officer. Cash America owns Cashland.
So about banks again…..
The GAO found that banks last year imposed $36 billion in fees to consumers, up about 33% from 2000.
“If you look at the composition of earnings at banks and other financial institutions, there’s increased reliance on noninterest income,” says Greg McBride, senior financial analyst at Bankrate.com.(smartmoney.com)
Banks rely on repeat offenders just like cash places do.
By: Joy on May 9, 2008
at 9:48 pm
We’re not talking about banks. We’re talking about corrupt payday lenders preying on the customer in the interest of a dollar. If you want to make a case against banks, then write your Congressman.
By: William R. Barnett on May 9, 2008
at 10:00 pm
every point anyone tires to make, you ignore.
By: tara on May 9, 2008
at 10:03 pm
Tara: thats why i quit debating with him, he’s going to be right no matter what anyone else says.
By: Latoya on May 9, 2008
at 10:07 pm
This comment from the Cashland employee that operates under her CEO’s philosophy to keep the customer in debt to keep raking in the cash. No wonder it’s called Cashland.
By: William R. Barnett on May 9, 2008
at 10:07 pm
You are correct. I am right and you feel that you are right. Like I said, we agree that we disagree. You are not here to sway my vote and I doubt I can sway yours. It really doesn’t matter because the decision isn’t ours to make on this issue.
By: William R. Barnett on May 9, 2008
at 10:09 pm
ive told you about extended payment plans that help customers out of the cycle numerous times and you continue to ignore it.
By: tara on May 9, 2008
at 10:10 pm
I am not ignoring it. In my book, it’s too little, too late. Do I need to post the quote again? This is YOUR company’s philosophy like many other payday lenders standard operating procedure.
By: William R. Barnett on May 9, 2008
at 10:17 pm
The difference between you and me is, i am able to read both sides of this argument and i can say that both sides present valid points.
Just like anything else in this world, there are pros and cons. There will always be pros and cons in anything you do in this world.
I accept both the pros and cons and will continue to make my decisions based on looking at all the facts, not just the facts that suit me.
You refuse to look at any of the benefits of payday loan. And for me, that fact is I would much rather pay 7.50 for my loan to avoid paying 45.00 for a bounced check. i dont care who owns the darned company, its just good sense for me to pay 7.50 instead of 45.00
By: Latoya on May 9, 2008
at 10:20 pm
Let’s talk about “payment plans” (this might not not be relevant to Cashland)
Payment Plans Have No Impact on the Debt Trap
Variations of the payment plans have already been incorporated into law in several states and
have had extremely low take-up rates, even though the vast majority of borrowers cannot pay off their payday loans and instead must flip them every two weeks.
Payment plan use is low because they are often unaffordable for the trapped borrower. Most
borrowers have to pay more to enter into the payment plan than they would to simply flip their
loan (which can be accomplished through a back-to-back transaction if rollovers are prohibited).
For example, a borrower that took out a $300 payday loan carrying an interest rate of 390 percent would have to come up with $45 to renew the loan in full or pay their first installment of a
payment plan of $86. This $40 difference could have a large impact on a family cash-strapped
enough to take out a payday loan, so the structure of payment plans leads them to fail.
Many payday borrowers “borrow from Peter to pay Paul,” taking out multiple payday loans from
multiple payday companies. When borrowers don’t have the funds to repay the original payday lender, they walk down the block and get a second payday loan to pay back the first and so on.
For these borrowers, payment plans are particularly inaccessible. For example, if a borrower has three payday loans outstanding, they would need to come up with $258 ($86 x 3) to enter into the repayment plan with all these lenders at once. If they start the repayment plan with only one shop, they don’t have the money to repay the other lenders. This means that borrowers without considerable front-end cash (i.e. those most likely to take a payday loan to begin with) simply cannot afford to enter into a payment plan.
By: William R. Barnett on May 9, 2008
at 10:23 pm
When did I ever say I didn’t look at both pros and cons? I believe I started the loss of jobs and revenue for the State being a con to the bill. If you want to quote me, then I said “I am choosing the lesser of two evils”.
By: William R. Barnett on May 9, 2008
at 10:28 pm
Here is the extended payment plan for Check N’ Go from former district director of operations in DC. He quit his job the day before and made a statement:
“Another misleading best practice is the extended payment plan, which in theory allows a borrower unable to repay the loan on the original due another 90 days to pay it back with no extra fee. Why is this meaningless? Well, we instruct our staff not to tell customers that the option exists. Customers are supposed to discover it referenced on the back of the CFSA brochure that is handed to them quarterly along with their privacy statements. (Think about it: quarterly privacy statements for borrowers on two-week loans. Clearly something is not right.) Then they have to ask for an extended payment plan the day before their loan is due. If they ask on the due date, they do not qualify. And they can only get one of these a year. Moreover, we train our staff to discourage borrowers who ask for the option from exercising it.”
Another quote from his statement is:
“I resigned because I could no longer stomach the lies, and I could no longer continue exploiting customers, making hard lives even harder. I hope that by speaking out now I will be able to, at least in some small part, make up for the harm I have done by helping to end a very abusive business practice.”
By: William R. Barnett on May 9, 2008
at 10:44 pm
Read this viewpoint in the Dayton Daily News:
http://www.daytondailynews.com/o/content/oh/story/opinions/editorial/2008/05/01/ddn050208paydayxxeb.html?cxntlid=inform_artr
By: William R. Barnett on May 9, 2008
at 10:49 pm
Read this viewpoint also in the Dayton Daily News:
http://www.daytondailynews.com/o/content/oh/story/opinions/editorial/2008/05/07/ddn050808letters.html?cxntlid=inform_artr
By: Latoya on May 9, 2008
at 11:06 pm
Same old dog and pony show.
By: William R. Barnett on May 9, 2008
at 11:08 pm
and I could say the same exact thing
By: Latoya on May 9, 2008
at 11:12 pm
Mr. Barnett the reason I bring up banks is because they are just as corrupt as cash advance places but you people choose to ignore this. I am certain you use a bank for some reason or another, right? You need banks though. You are really pushing for this for some reason. I work at a payday lending institution and I havent put as much effort into this cause as you have.
By: Joy on May 9, 2008
at 11:14 pm
You never answered when you were asked what you did for a living. So what is it you do Mr. Barnett?
By: Joy on May 9, 2008
at 11:17 pm
My job is irrelevant to this discussion. It really doesn’t matter if I am a janitor or a CEO of a Fortune 500 company, does it?
By: William R. Barnett on May 10, 2008
at 8:00 am
Banks have been around much longer than payday lenders in OH. In the 12 years the cash advance stores have been operating in this state, the short-term industry has financially drained 300,000 Ohioans, which is 2/3 of its clients. Cash advance places have popped up in greater numbers than the fast food industry, especially in urban areas. This has lead city councils to adopt laws the limit the number of payday lenders in many cities. The business model in the industry is to keep people in the cycle of debt to rake in a tremendous profit. Do we need Feehan’s quote again?
This discussion is not about corrupt banks. I am sure there are other businesses that are out there that prey on people as well. It seems that you want to draw attention away from your industry’s own shortcomings. Last time I checked, the target for termination is payday lenders.
I really don’t see how you can draw a conclusion that I have been “putting so much effort into this”. If I was to do that I would be out speaking against this industry to the public in another medium than the internet. My senator, who co-sponsored the bill, will be voting yes on this. Another one of the senators in my area is on the Senate committee for this bill. They will both make me proud.
When several organization in my community are lining up against payday lenders, I am glad to see I am not alone. When I read some of the testimony that former employees in short-term lending have made, it sounds just like the situation here in my own backyard. It’s comforting to know the government is seeing this industry for what it is after you tear off the “bank-like” interior of the store and remove the “happy, smiling faces” of the CSRs. You get a business that is nothing but legalized loan sharking and smells like hot garbage.
By: William R. Barnett on May 10, 2008
at 8:31 am
I would like to tell everyone story.
Five years ago I gave birth to premature twins. My babes spent several months in the hospital.
The expense of having premature infants is astronomical and quite a drain on ones income.
In desperation one week, needing gas money to see the babes and to pay for a sitter to watch our other two children, and money for rent, my husband and I applied for a small bank loan.
We were turned down because our fico score was too low and because I wasnt working due to the birth of the babes. We then applied at a credit union. No assets, no loan.
We made due for a few weeks. We applied at a finance company but they were going to charge us 28.9% for $1200.00 over a 12 month period. Thats all they could offer us.
Now it was a month before Christmas. Behind in the rent, no money for gifts for our children and our preemies still in the hospital, we went to a payday company. We explained the situation and asked for $500.00. The teller talked us into only taking $300.00 as she said that would be far easier for us to pay back. We signed the papers and thanked her for her help. We paid the rent and bought groceries.
A week later, that teller called me and said we had forgotten to sign something and could we come back in. We went in the next afternoon expecting to sign something.
To our astonishment, we were greeted with yells of SURPRISE! from the employees there. That teller had spoken to her corp. office about our plight and they had permitted her to go out and buy Christmas gifts for our family. Not only did both of my children get bikes, games, and gift cards for $100.00 each for clothes, but my husband and I were given $100.00 gift card for groceries and a $100.00 gas card.
And thats not all, they gave us a receipt showing our loan was paid in full.
These people did not have to do that. They didn’t know us and we certainly weren’t previous customers of theirs. They did no advertising on their gift to us, it was done discreetly in their back room.
I am very well aware that it was the tellers initiative that prompted her corp. office to allocate the funds for our surprise, but again, that corp. office was not obligated to do this at all.
The fact that they went above and beyond to help out a family in a bad situation when no other company even wanted to talk to us tells me that there is good in that industry.
We never had to take out another payday loan after that, but if we needed one, I would not hesitate to use that company again. They have empathy and compassion, something that is sadly missing at most banks and credit unions.
In light of all the negative opinions on this industry, I just wanted to share with you something positive about them.
We have contacted our Senator to vote no on this bill.
By: Mrs. J. George on May 10, 2008
at 9:20 am
Mr. Barnett people are going to suffer if this bill passes. You choose to beleive that our economy will be better but you’ve forgotten one thing. The honest people who are our customers will live without the money they need and the dishonest people will get it one way or another. You have to do what you must to survive. I agree with you that the laws could use some tweaking. And just like EVERY OTHER BUSINESS, we rely on our repeat customers for most of our profit. But they rely on us too. You simply do not understand this industry enough. In Oregon laws similar to Bill 545 were passed which lowered the interest rates on payday loans and ultimately drove this business out of the state. In Michigan payday lending regulations were put into play and now a majority of the customers are forced to drive to Ohio to get their loans. I understand that you, and people like you, want to “save” the poor uninformed citizens that are being “raped”(as you put it earlier) by payday loan places, but they do not want to be saved. You cant take care of everyone. These people are not being lied to. They are well informed customers. Dont patronize these people.
By: Joy on May 10, 2008
at 9:53 am
Thank you Joy
you said it much better than I could
By: Latoya on May 10, 2008
at 10:02 am
No, lets not protect the people that take out a loan that ends up costing them $14,000 in the end with fees and penalties. Let’s not save the people from payday lenders that pressure the client to take out 85-100% of their gross income. Let’s forget the companies that go into poor socioeconomic areas and give a $800 donation to a church, so the congregation can be referred to the payday lenders. I guess it doesn’t matter that your contract waives a customer’s legal rights. Let’s dismiss the people that have been subject to harassment and intimidation from payday lenders breaking the Fair Debt Collection Act. The people are already suffering. 300,000 Ohioans are suffering thanks to your industry and your hands are dirty just like everyone else in the payday racket.
If you honestly believe in “repeat business” as being a good thing, then you must be insane. These clients are coming in over and over because they are in trouble and you have done NOTHING to help them. You collect fees on the same amount they take out. You want them to keep coming in. You want your clients to be in a bleak financial situation that depends on your service and your company thrives on that dispair. On average, 12-13 times a year your industry does this to each customer. You should be ashamed of yourself for wanting repeat business and write is off as making a profit or “charity work”. Shame on you and when this bill is passed you can thank your industry for doing so much “the help the community”.
By: William R. Barnett on May 10, 2008
at 10:19 am
By the way, I am not “protecting the people”. The government is trying to reform the short-term lending law. Unless any of us here are senators, then we don’t get to vote on it. Is that what’s eating you up inside? Get over it. It’s not the public that is supposed to make the law. It is the State of OH that has that responsibility.
By: William R. Barnett on May 10, 2008
at 10:28 am
Another thing…
I have heard the argument that “we’re providing a service that no one else does” or “this is the customer’s last hope”. So let’s keep the corrupt business practices of payday lenders alive in OH. We’ll just turn our heads when we hear horrible stories. We’ll pretend it never happens and sweep exploited customers under the rug. Will that make the situation any better? Like I said before…maybe the next time it’s 500,000 Ohioans hurt by payday lenders. This is the time to nip it in the bud. The government in the state of OH and even local city councils are sending a clear message to the short-term lenders. They want you out and so do I.
By: William R. Barnett on May 10, 2008
at 10:34 am
Here is the cost of “repeat customers”. This is from a report from the Center for Responsible Lending depicting the situation for the average lender in the US in 2006:
Ninety percent (90%) of payday lending revenues are based on fees stripped from trapped
borrowers, virtually unchanged from our 2003 findings. The typical payday borrower pays
back $793 for a $325 loan.
Predatory payday lending now costs American families $4.2 billion per year in excessive fees
Here is how the government responded to payday lenders targeting the military:
Congress recently adopted, and the President signed into law, a 36-percent annual interest rate cap for consumer loans made to military families, protecting them from predatory payday loans as well as many other high cost loan products. The legislation outlawed taking a security interest in a live check, therefore prohibiting payday lending. The Pentagon reported that payday lenders are targeting their troops, and that servicemen and women are frequently losing security clearance because of their resulting debt problems.
By: William R. Barnett on May 10, 2008
at 10:45 am
I understand now Mr. Barnett. This is a personal battle for you. Did you or someone you love get themselves in too deep with a payday loan place? I know. I am not ashamed of myself or my industry. Keep telling yourself that payday lenders push customers to borrow 85-100% of their income. Obviously your wife worked for a very crooked company. Our guidelines are NO MORE THAN 50% OF THE NET PAY. Dont assume you know how many people are suffering. Out of those 300,000 I doubt even a small percentage of those people want the bill to pass.
By: Joy on May 10, 2008
at 10:49 am
Do you think Ohio consumers are stupid?? That they cannot make their own decisions. You seem like an educated man were you stupid when you needed help?
By: Joy on May 10, 2008
at 10:56 am
Do you own your own home? Most of my customers do.
By: Joy on May 10, 2008
at 11:12 am
You are not the solution, you are part of the problem. I am beginning to understand YOU now. Your employer is innocent and choses a “let’s be dismissive of the horror stories out there” attitude. You admitted you are not ashamed of the industry. By your own guilt, you are not ashamed that your colleagues in the business are crooked. You admit that people do get in too deep. But of course, you are not the blame, you’re not the problem. Push the blame back on the customer and take zero responsibility for helping them to continue in the cycle of debt.
I don’t think Ohio consumers are stupid. You want to talk in absolutes. ALL or nothing. Let’s talk in truths. MANY payday lenders are corrupt. MANY payday lenders prey on customers in weak financial situations. SOME customers are desperate enough to take out as much as they can because your industry makes it so simple. SOME customers feel lured in by the industry and pressured to continue taking the service.
I don’t know anyone in my family that has been caught up in this cycle. I do know of people that have been so financially devastated by payday loans. The 300,000 Ohioans has been documented by the Ohio Coalition for Responsible Lending. Some payday lenders are forcing customers to take out 85-100% of gross income as they have testified after leaving the business. Or, is this just a big conspiracy and everyone is lying?
By: William R. Barnett on May 10, 2008
at 11:13 am
I don’t know why you need to continue to ask me about personal issues. Does it matter if I live in a cardboard box or in a mansion? What doe that have to do with the price of tea in China?
By: William R. Barnett on May 10, 2008
at 11:14 am
Some people are very happy that we as voters dont get the right to vote on this issue. I wonder why that is…..could it be….
1. they dont believe people should have the right to vote on things that directly affect them
2. They like it when the state makes all the decisions regarding peoples lives
3. They are afraid of how the voting will turn out, maybe giving people the right to choose?
4. all of the above?
By: Latoya on May 10, 2008
at 11:31 am
The reason I ask you persoanl questions is because I want to understand where you are coming from. I have had to borrow money from our competitors on many occasions. I own my own home. My company has a very strict policy about our qualifications. We loan only 50% of net pay. You are telling me you have never been unfortunate enough to have to use this service. I have. It was a life saver.
By: Joy on May 10, 2008
at 11:37 am
Let’s talk about my region in OH. According to the Ohio Coalition for Responsible Lending, Lucas County in 2006 had:
1. 13,735 people in the cycle of debt due to payday loans.
2. All payday borrowers together paid $13,744,465 in fees.
3. There were 67 storefronts in the county.
Taking this information, I can deduct:
1. 22,154 people in Lucas County took out payday loans in 2006. I used the national figure of 62% of payday borrowers being caught in the cycle of debt.
2. The average borrower in Lucas County is paying $620 in fees.
3. There is roughly 1 store for every 6650 people in Lucas County using the latest census data.
Here are the State averages, again:
Statewide, the average borrower takes out 12.6 loans per year. The average loan amount is $328. By the 13th loan, the customer has paid $637 in fees to borrow the same $328 over and over again.
Another quote:
“The secret to the success of the payday loan is its deceptive design. Specifically, we made the process very simple and easy at the front end to get people into the loan. But at the back end, we made it very difficult for customers to get out of the loan. It became a situation where our borrowers were like indentured servants, but with indefinite terms of servitude.”
– Cameron Blakely, former Check ‘n Go Store Manager at a Washington D.C. press
conference on Payday Lending. September 12, 2007
By: William R. Barnett on May 10, 2008
at 11:37 am
I have NEVER and will NEVER use this service. I don’t care how desperate my financial situation might be at anytime. Also, I am not saying that I haven’t been unfortunate before or in the future.
By: William R. Barnett on May 10, 2008
at 11:39 am
Latoya: It is the State of OH’s responsibility to set the short-term lender laws. You seem to want to throw the legislative process that has been in this country for over 200 years right out the door to serve your own needs. Your response need another choice: 5. None of the above.
By: William R. Barnett on May 10, 2008
at 11:43 am
Well, sorry but if things keep up the way they are, pretty soon no person will have any say in their own personal freedoms.
Sorry, but if I wanted to live in a dictatorship I would move to a place that offered that.
I have been alive long enough to see many rights taken away or in the process of being taken away.
Rights taken away from people and rights being taken away from businesses.
Sometimes its a good thing, as with smoking in buildings.
But i still fail to see how my second hand payday fee affects your health.
everytime some group speaks out about the evils of this or that, everybody has to jump on the bandwagon and what happens is now everyone in the targeted group is painted as unsavory members of our society. (Run them all out! Put them out of businees! Slimy loan sharks!)
a few things ive read on here about lenders.
If i remmeber my history well enough, they started that same thing in germany long time ago. They painted a target group of people that were detrimental to their society in their esteeemed opinion and we all know what happened there.
Yes i know its not the same, but i see the parellels with the thinking.
Just like my stand on drinkin. I dont like it, i dont buy it, i dont go to bars, but beings as i am an american, i will fight for your freedom to drink at bars and for those bars to stay in businees.
By: Latoya on May 10, 2008
at 12:02 pm
Ohio Senate 101:
Once introduced, legislation is referred to one of 14 standing committees in the Ohio Senate. Generally, a committee chair will schedule at least two hearings on a bill to hear testimony from bill sponsors and opponents as well as to vote. Witnesses testifying before the committee may be professionals representing interest groups or concerned individual citizens. Witnesses are not under oath, as in a courtroom, but they are required to register with the committee chairperson at the beginning of the hearing.
The Senate committee in charge of the bill:
The Senate Finance and Financial Institutions Committee focuses on bills, policies and issues that directly impact the expenditure of state funds and the regulation of financial institutions, including banks, credit unions and savings & loans. The committee is responsible for balancing the state’s operating and capital (construction) budgets. In addition, the committee also makes recommendations to the full Senate for the advice and consent of governor’s appointments to financial boards, commissions, and university trustees.
The is the legislative branch of the state government. This is how it works and has for decades. It is not going to change anytime soon. Live with it.
By: William R. Barnett on May 10, 2008
at 12:05 pm
Mr.Barnett,
You missquoted Dan Freehan above. The quote you used above was from Dan Wesolowski. He has not been with our company for a while. He was let go. The repetitive customer quote, not from our CEO.
By: Joy on May 10, 2008
at 12:08 pm
You don’t realize that whether or not an issue might affect me, I can still support the government’s legislative process. In this case, a bill is being looked at to reform the short-term lender laws. Among many others in the State, I support this 100%. I personally know of these “loan sharks” and “heinous acts” perpetrated by payday lenders. It is my right to form an opinon based on what I know. You have done the same. Like I said, “we agree that we disagree”.
If you want personal freedom, then go ahead and do anything you want. You will just pay for your actions. Rewards and consequences. The government has enacted laws to deter a person from walking into your home and shooting you in the face. The US is far from a dictatorship and really is not going in that direction. While we have laws to tell you when you can or can’t do something, I would rather live in a nation that has some structure, rather than anarchy.
By: William R. Barnett on May 10, 2008
at 12:13 pm
I would talk to the Ohio Coalition for Responsible Lending then, as it’s where I got the quote from on their website. It really doesn’t make it any better, does it? The blood is still on your company’s hands…
By: William R. Barnett on May 10, 2008
at 12:15 pm
and you know what else? I do feel sorry for those poor girls that work at my payday lender. Yes I do!
They aint doing nothing different than those men in the state house are doing. They is campaining for their jobs. They are trying to present their side of an issue. But because they arent politicians, they is bad bad people.
i feel the most sorry for the one I always go to when shes working. Shes only 22 years old and has 2 babies. She was on welfare from 17 to 21. But that girl turned herself around and got her a diploma. Nobody would hire her cause of her background. But my payday lender gave her a chance. And they paid her good enough to get off welfare completely and give her health care and dental care. You should see her smile now that her teeth got fixed. She got moved out of the rat trap she was in and shes got a nice car.
Now the poor girl is frettin cause shes going to lose everything she worked so hard for.
She told me this morning that shes applied at over 35 places in the last month cause shes afraid of going back on welfare. Not one call for new work. Now shes going to start applying at fast food, cause thats the only places hiring.
They aint going to give her no benefits. They aint going to pay her too good.
How do i know so much about her? she used to be my neighbor too. she moved on up now shes going to have to move on back.
I feel sorry for all them girls.
By: Latoya on May 10, 2008
at 12:17 pm
Mr. Barnett,
I have enjoyed the banter with you, but I am becoming exhausted trying to explain things to you. You have some kind of personal vendetta with payday loan places(maybe you or your WIFE had a bad experience) And I favor free choice and enjoy having a job. There is nothing that either of us can say to sway the other. I appreciate the attention you have given to this matter, but I really dont understand why this concerns you, if, as you say, neither you, your WIFE, or your family, has ever been victimized by this place. I am actually at work right now and I have shared our debate with my customers. They think it is funny too.
By: Joy on May 10, 2008
at 12:23 pm
Here is the actual source as cited:
King, Uriah, Leslie Parrish. 2007. Springing the Debt Trap – Rate caps are only proven payday lending reform. Remarks made at the Jefferies Financial Services Conference. June 20, 2007. Quote from http://www.responsiblelending.org/issues/payday/reports/springingthe-debt-trap.html
Transcript of Cash America’s presentation at the Jefferies Financial Services Conference is on file with above authors.
It was taken from a actual transcript from the conference. So it is on paper and has been a source for other organizations fighting payday lenders across the nation.
By: William R. Barnett on May 10, 2008
at 12:24 pm
Once again, another payday lender brushes aside the testimony of others as if it never happen. The bad experience was having become involved in an industry that has done so much harm. Good luck and hope things work out for you after the overwhelming vote passes this bill.
By: William R. Barnett on May 10, 2008
at 12:27 pm
On Wednesday the vote will be in and we will all know our fate. I agree that the legislative process is vital to our country. I think that democracy is great. I dont think that anyone here thinks that we should be in a country free of laws. We are not dealing with blood diamonds here, Mr. Barnett, we are dealing with a service offered that is no worse than bank overdraft fees, mortgage rates, and rent to own centers.
By: Joy on May 10, 2008
at 12:33 pm
For those not aware
Abuse Tactics
The silent treatment and unanswered questions
Distainful smirking
Snide remarks/veiled insults
Making you feel guilt over things you have no control over
False accusations/nitpicking/fault finding
Falsly stated expertise/talent/knowledge
Interegations
Intimidation
Sulking, provoking guilt turning the subject to their grievences
Critisizing
Finger poking/pointing
Irresponsibility of other peoples rights and possessions
Failure to consider your worries and concerns
Lack of respect for different opinions
ridiculing – often at unfortunate circumstances
name-calling, nationality/occupation, age/disability mimicking/mocking
Selecting weaker targets: Picking on Women, Children, Elderly
Throwing ‘tantrums’
By: Latoya on May 10, 2008
at 12:35 pm
Once again, another critic brushes aside all the testimony present by myself as a customer and the evidence i presented.
If youre going to call the kettle./……
By: Latoya on May 10, 2008
at 12:39 pm
Latoya: You have a personal relationship with your payday lender and are a borrower yourself. You have a rare situation to say the least, but this is not a typical story in the payday lending world. Your interest is much deeper. Your decision is based on personal feelings. I am glad to see happiness in the sea of sorrow, but after 12 years the time to reform has come. Nothing more or less.
The representatives and senators in Columbus pushed aside party politics and came together on an issue. In an ideal system, you want to see this and not politicians voting because of party pressures.
By: William R. Barnett on May 10, 2008
at 12:42 pm
I am not worried about myself. I am worried about my associates(all 6000 of them) and our customers(who do not have the credit or ability to get a loan elsewhere). On a lighter note: I enjoy seeing you get fired up about this. It is comforting to know people still practice freedom of speech, even though some of our other freedoms have been taken away. Have a great day!!!!!!!!!!
By: Joy on May 10, 2008
at 12:43 pm
But Mr Barnett, as you yourself said, much of yours is also based on personal feelings too.
I still want to know where i will go for a loan if they close. Would you be willing to lend me a loan once a month if I pay you back with a 1.38 fee on it?
Reform all you want, but make it so they can still make their profit and stay in business. I couldnt work for 1.38 an hour so why insist they get that little bit for profit? Whats the profit margin on a bottle of wine, dinner out, a movie ticket, i bets its much higher than you want the payday lender to make.
By: Latoya on May 10, 2008
at 12:51 pm
Joy: You are in an industry that teeters on the decision of the State government and has for over a decade. I am sure your industry was happy when they got the loan cap raised a few years ago. Now, the State is making another decision and it’s not in your favor. You can’t have your cake and eat it too.
Latoya: Nice list. I don’t know what it proves, but lets look at it a second:
Intimidation: Many payday lenders use this tactic to get borrows to pay up a loan. They use threats of physical violence, harassment by showing up to your home/work/neighbors house multiple times, or force a client to go to another payday lender to cover the loan.
Unanswered questions: Many short-term lenders do not disclose vital information on the contract and try to change the subject when a customer asks. Many don’t report payment plans they might qualify for, if they have trouble paying the loan back.
Selecting weaker targets: Many of the payday lenders try to weasel themselves into lower socioeconomic areas to lure customers in. Such groups targeted are minorities, the elderly, unmarried women, etc.
Irresponsibility of people’s rights: See intimidation above. Also, some payday lenders have use your private information to check your bank account balance over the phone. Other lenders have gone further by stealing your identity to access your bank.
Failure to consider you worries or concerns: Many lenders pressure a client to take out more that they can afford on a loan. Sometimes this is 85-100% of gross income.
These are well-documented tactics used by payday lenders across the nation. Some of these lenders are in your own community. If you don’t think it happens, then you are blind.
By: William R. Barnett on May 10, 2008
at 12:59 pm
you know exactly
projection, plain and simple
By: Latoya on May 10, 2008
at 1:02 pm
Latoya: I don’t have a personal relationship with a payday lender anymore. I do know of people still in the industry that have reported many of the crookedness.I still know borrowers trapped in the cycle after years. I can couple that with the research already done. Then, I can make an informed decision. It is not much different that what I though about payday lenders for many years, but it surely does reinforce my beliefs.
Joy: I am not fired up about this. It is you that has been shedding many e-tears over this issue. Like many of you said, this issue doesn’t affect me. So, I guess according to them, I will go on with my life as nothing happened regardless of the outcome.
Like another person said in a post: You can find some job openings in financial services and they are looking feverishly. Once the payday lending industry topples like a cheap house of cards, I am sure your experience can get you into a bank or credit union. In matter of fact, I see many former cash advance employees working in credit unions in this area after coming to their senses.
Your customers should be able to find help after the laws are reformed by the banks and credit unions stepping in to accommodate the influx of potential business. Also, I believe the bill supports special licenses to non-profit organizations to give short-term laws. These groups will more than happy to help out people in need, as most of those agencies already do that service. Plus, they don’t make a tremendous profit and pocket it. They will use the fees to aid others in need.
By: William R. Barnett on May 10, 2008
at 1:11 pm
Latoya, are you so focused on your own payday lender that you fail to acknowledge there are others that have been taken advantage of by payday lenders?
By: William R. Barnett on May 10, 2008
at 1:12 pm
I know some feel they have been taken advantage of. I know some got the short end of the stick when dealing with them. Just like all of us have felt about some bank/businees/credit card company we have dealth with in the past.
My own sister feels exploited by her credit card co.
My cousin feels ripped off by Ford.
You know? we all been there sometime.
Answer me this,
if payday loans are so bad and evil then why are the banks going to be able to do them for 10 bucks a hundred. Sorry, saving me 5 bucks isnt that great of a deal. how come they going to be able to lend 1000.00???? That downright crazy, no body in need of a pay loan needs to be getting 1000.00
I think you all want me to jump right off the platter in to the fryin pan.
and another thing, the bank i bank at pays starting teller 7.50 an hour but the payday loan company i go to starts tellers at 9.50 I know, cause i asked.
and i will never ask my bank for another loan of anykind again, i wish you could have been there the day i tried. they looked at me like i was from outerspace. I was talked down to and made to feel like dirt cause i didnt have a savings account or cds with them. ask them for a pay loan? no i think not.
Theres a feller in my building who says he will give personal loans to any of us there if we need to get one after they close. He said he will charge the same as the payday lender does now. Ill just go to him, thank you very much.
By: Latoya on May 10, 2008
at 1:28 pm
I gotta go now, my son is taking me to popeyes for lunch! But Ill be back, dont you worry none Mr Barnett.
By: Latoya on May 10, 2008
at 1:33 pm
I shed tears because at my company there will be at least 36 people out of a job(just at my company, just in Toledo area). So the people out of jobs at my company, plus all the other hundreds of Toledo payday loan employees, will all be looking for those few bank jobs available. The fortunate few will be o.k. and the hundreds of others will be forced to take pay cuts and milk the system for benefits. Even you must know that there are not that many good paying jobs out there. There are certainly not hundreds of bank jobs in Toledo. Maybe 20, if that.
By: Joy on May 10, 2008
at 1:36 pm
The loans themselves are not evil. It’s the fees and tactics used against the customer. Banks and credit unions will be operating short-term loans under the new reform. The have other services, so they don’t need to make ridiculous profit on them. Unlike the payday lenders, which sunk all their eggs into one basket and didn’t diversify. They wanted the whole pie and focus on just one thing: payday loans. They dabbled in other services like tax returns, Western Union, etc., but it’s not enough to cover the overhead. Poor planning on corporate’s end.
I am reminded of a story my father told be about a fellow professor. This professor, who taught business management, was thinking about opening a payday loan store based purely on one reason: Profit. To start up a store like that would take very little effort and you could rake in the cash. He chose not to after a while and what scared him away was collections.
You always have options and need to weigh all the alternatives. When the payday loan empire falls apart, the former employees might have to take a pay cut. $7.50 an hour seems better than nothing. Personally, I wouldn’t take money from a “feller”. Too much risk for the client. On his end, he just needs to keep shelling you the same amount every 2 weeks and he collects the fees. Good deal for him.
By: William R. Barnett on May 10, 2008
at 1:42 pm
There’s probably 200-240 payday lending employees in Lucas County, which includes CSRs and store managers. Some will find jobs in finance, some might take lateral positions within the corporation, others might seeks jobs in different areas, some might go back to school to get better skills, or some might just sulk at home. You are acting as if there isn’t enough options out there. This isn’t the first time people have been faced with these decisions.
By: William R. Barnett on May 10, 2008
at 2:09 pm
Would you take a $3.00 an hour paycut??
By: Joy on May 10, 2008
at 2:42 pm
Do you feel any remorse for the 240 or so people who will be out of a job?
By: Joy on May 10, 2008
at 2:43 pm
I have taken much more in a paycut several times in my life. I do feel remorse forf the people that MIGHT be out of a job. Do you feel any remorse for people that have been victimized by payday lenders in OH? Do you feel any remorse for the 300,000 Ohioans that are caught in the cycle of debt due to payday loans?
By: William R. Barnett on May 10, 2008
at 2:50 pm
The data shows 2/3 of your clients are in the cycle of debt because of payday loans. That’s not a good track record to say 1/3 of your customers are NOT suffering because of your business. Why is this overlooked by payday lenders? Because they make so much money off their clients stuck in a rut.
You might not know it because they probably don’t tell you. You have no idea how many loans they have taken out in the area either. Furthermore, your “numbers” don’t reflect this trend either. Open your eyes up to the reality of the payday lending industry.
By: William R. Barnett on May 10, 2008
at 2:59 pm
All hail the wise and wonderful Mr Barnett!!!!
After reading all your posts Mr Barnett, I gots myself an idea to get out of my financial dilemma.
I got in the mail just Wed. a pre approved offer for a visa card. Now I called them and I dont qualify for the low interest card but i do qualify for the 22% card with a 2500.00 limit to start.
Heres what i can do.
I can take cash advances out on that card (29%) upto my limit. But Ill just take 1500.00
Then ill go spend the rest on groceries, pay some bills up ahead and get me some new clothes, new tires for my automobile.
But I aint going to pay the bill on it. I went to a site off your responsible lender site and its a debt consolidation site. I learned there how a person gets out of paying off their payday loan and their credit cards. This was there instructions.
First you close you bank account so they cant ach what you owe. Record all phone calls they might make to you. Change your phone number to unlisted if they call you. Tell those people where you got the loan/card how much, etc and they will tell you if there are any loopholes in the whole thing that gets you off from paying them legally.
Then, I always have the argument that I was suckered in, didnt understand the credit card mumbo jumbo, was exploited with the high interest rate, I was targeted for unscrupulous practices, oh my…i could go on and on and on.
i could also do this at numerous pay day loan companies too. Take out a bunch and then cry out FOUL!!!!
As long as you and the goverment are going to protect me from them evil ones and there are web sites explaining how to get out of paying your bills to read…how could a person lose?????
By: Latoya on May 10, 2008
at 4:54 pm
“Don’t forget to be kind to strangers. For some who have done this have entertained angels without realizing it.”
–Hebrews 13:2
By: Latoya on May 10, 2008
at 5:05 pm
I am not protecting you from anything, so don’t include me this. That is not my job. The government is reforming the law, which is their right to do under the laws of the State of OH. When can you get that through your thick skull? Maybe you need to go back to civics class and read the chapter on the legislative process. Or did you skip that in high school?
You like to play innocent and naive in this charade. It suits you well. Please give me the URL for that website that says how “beat the crooks at their own game”.
“If thou lend money to any of my people that is poor by thee, thou shalt not be to him as an usury, neither shalt thou lay upon him usury.”
Exodus 22:25
In the New Testament, Jesus overturned tables of the money chargers and admonished those who had made the temple “a den of robbers.” (Mark 11:15-17, John 2:13-22).
By: William R. Barnett on May 10, 2008
at 5:26 pm
When credit cards put you in jeopardy
(CNN) — Americans are drowning in debt.
Consumers have racked up more than $2.2 trillion in purchases and cash advances on major credit cards in just the last year. And it’s become a habit for them to spend more than they have. The overall credit card debt grew by 315 percent from 1989 to 2006, according to public policy research firm Demos.
To compound the problem, fewer people are paying their credit cards bills on time. The percentage of people delinquent on their credit cards is the highest it’s been in three years, according to CardTrack.com.
The principal is not the only problem, it’s also the interest you’re accruing. If you have a $2,000 balance at a 14 percent interest rate — and make just the minimum payments — it will take you more than 14 years to pay off that debt plus the interest. Try to pay more than the minimum payments on your credit cards whenever you can.
There ya go with your insults again, very classy
By: Latoya on May 10, 2008
at 5:50 pm
I take that as a “no”…
Again, you want to point the finger at another industry. This issue is about payday lenders and the last time I checked, the Ohio House passed a bill to reform the short-term lending laws and it was introduced to the Ohio Senate. I don’t think credit cards were up for the debate. I don’t think it was the credit cards that were being banned in several states or city councils in OH were limiting the number of credit cards applications being mailed in their community.
It’s funny that you pick an article that says “Americans are spending more than they have,”. With payday loans, customers are putting part up their next pay check at risk. They are spending money that haven’t even earned. How many times is the average borrower doing this in OH? Almost 13 times a year. All the while payday lenders are rolling in the dough and hoping your financial situation gets worse.
Don’t you think “All hail the wise and wonderful Mr Barnett!!!!” was a little condescending? Still waiting for that URL too.
By: William R. Barnett on May 10, 2008
at 6:07 pm
One thing, I aint innocent and i aint naive, but thank you for the compliment. Since you apparently cant tell when someone is being sarcastic (that was sarcasm)
Now ever since Miss Missi got on me (rightfully so) for calling race into this, i have tried to be good. i have only tried to debate the message you put out, but not insult you.
You ignore the point if i post anything of substance, so i try sarcasm to show you a parellel though and then you insult me. Why is it that no ones point is valid except yours? Why is it that because i disagree with you that entitles you to insult me.
You said (When can you get that through your thick skull? Maybe you need to go back to civics class and read the chapter on the legislative process. Or did you skip that in high school?
You like to play innocent and naive in this charade. It suits you well.)
I have behaved myself since after the beginning and i would appreciate the same.
Thank you
By: Latoya on May 10, 2008
at 6:08 pm
I don’t think you understand the legislative process. That’s why I have asked if you need a refresher. I keep seeing you and others go back to the same argument, “the people need to vote on this issue” or “the people need to choose”. It’s not going to happen. That is not the law. Also, you have said, “I don’t need the government protecting me”. That’s not really the issue. The State of OH is choosing the reform the lender laws. In 1995, they had to establish the current law and it was reformed in 2005. Nobody complained about it until the last several years. Now, it’s time to revise the law again. This time it’s not all “crimson and clover” for the payday lenders and many, many groups and citizens in OH are tired of this crooked business.
You do have a heavily biased view in favor of payday lenders, as I eluded to before and this is what clouds your judgment. You have a personal relationship with your payday lender and you are a borrower yourself. This person is your friend and you don’t want to see anything bad happen. You are being loyal to your friend, but you’re not looking at the overwhelming evidence against the payday lenders. You are turning a blind eye to the devastation short-term lenders have caused to many Ohioans. I am not saying your friend is a bloodthirsty loan shark per se, but your friend is working in a shady industry. Payday lenders do more harm than good in OH. Bottom line.
By: William R. Barnett on May 10, 2008
at 6:23 pm
you can call me wise and wonderful anytime (big smile)
the address is
http://www.debtconsolidationcare.com
By: Latoya on May 10, 2008
at 6:26 pm
To me this is a debate and I argue with the best of them. It is my duty to prove you and anyone else wrong. Of course, the side I choose is always right no matter what. I am not here to sway your vote, because you don’t have one on this issue. I don’t have a vote either. It’s up to the wise people down in Columbus to make the decision as required by law. Believe me, the testimony being heard there is much more damaging against payday lenders than what I can find for sources in my own research.
By: William R. Barnett on May 10, 2008
at 6:41 pm
it wont let me post the web address
By: Latoya on May 10, 2008
at 6:44 pm
when i try to post with the address in the message it doesnt post so do this…
search on yahoo the following
payday loan hell
the first site that lists is what you want
its debt consolidation care dot com
By: Latoya on May 10, 2008
at 6:48 pm
OK, I read it. I thought you said this site came of the Center for Responsible Lending? Or as you said, “I went to a site off your responsible lender site and its a debt consolidation site”. Here is the link:
http://www.debtconsolidationcare.com/pub/about12608.html
This is a typical story from payday borrowers caught in the trap. Some people just take out too many loans because it’s so easy to do so. Now, they are desperate and are struggling to find what to do next. They probably wished they didn’t know Mr. Payday Loan.
I didn’t see anything about further actions to avoid paying your loan. Yet, I have heard most of the way to try and combat the loan sharks. The sad thing is unless you read the contract before signing, most of the time you waive your rights to many things. Now you have a legally binding contract they will hold you to and once they get to the collection process, the happy smiles turn into anger.
By: William R. Barnett on May 10, 2008
at 7:03 pm
face it, we both have biased views, and you can only see the bad in it but i can see what good there is.
now, even though you drive me crazy with your sometimes one sided, insulting way of speaking (my opinion) to me and others…i not going to see only bad in you….cause i see good in there too.
and thats all im trying to say…..everybody and everything has both some good and bad and that you cannot dispute.
so, you choose to side with the bad and I choose to side with the good.
Im not trying to make you change your mind. all i want is for you to open you mind and accept that sometimes, in some places, payday loans have helped a body. just as sometimes they havent helped.
theres a parellel going to happen. work with me here…..
i have learned to open my mind about the drinkin thing. I have learned that people can have a drink now and then and they didnt turn into killers and alcoholics. I also realized that for me to say anyone that drinks or sells alcohol is a enabler/killer/snake in the grass is just rediculous
something else i thought of, not long ago they was bashing those mortgage places for giving out the home loans to sub prime people. Said it was the lenders fault everyone was losing their homes. Now its the payday people.
when everyones been run out of business, who are we going to blame all our problems on then?
just a bit of food for thought
By: Latoya on May 10, 2008
at 7:03 pm
OK, I read it. I thought you said this site came of the Center for Responsible Lending? Or as you said, “I went to a site off your responsible lender site and its a debt consolidation site”. I couldn’t post it either.
This is a typical story from payday borrowers caught in the trap. Some people just take out too many loans because it’s so easy to do so. Now, they are desperate and are struggling to find what to do next. They probably wished they didn’t know Mr. Payday Loan.
I didn’t see anything about further actions to avoid paying your loan. Yet, I have heard most of the way to try and combat the loan sharks. The sad thing is unless you read the contract before signing, most of the time you waive your rights to many things. Now you have a legally binding contract they will hold you to and once they get to the collection process, the happy smiles turn into anger.
By: William R. Barnett on May 10, 2008
at 7:04 pm
I have formed an opinion based on going through the research and using my own experience. I don’t only see the bad and try not to use the word ALL. I have stated over and over about the pros and cons of payday lenders. I have admitted before that payday loans have helped people in some instances. What is staggering to me is that 2/3 of borrowers in OH have been harmed. To hear you or anyone tell a good story is welcomed, but 300,000 Ohioans trumps a handful of positive payday loan tales.
Predatory lending is another issue, but you are correct, it’s becoming a problem These people, just like many payday lenders, target lower socioeconomic classes. They want to find customers that are so desperate and in need of a mortgage, they’ll sign anything to get a home. There is a name given to businesses that target these people, such as credit card companies, payday lenders, mortgage companies, pawn brokers, etc.: Its called the “fringe economy”. The people they aim for are the people credit-challenged and already strapped for cash. These businesses go in with one thing in mind: To profit from exploitation.
I checked out some mortgage lenders once that were of the shady type. I remember one comment, “We don’t care how you get the down payment…if you have to sell drugs or rob someone to get it, then we don’t ask where the money came from” True story.
I’m not blaming my problems on anyone. Yet, I don’t like when consumers are exploited or even employees for that matter. I have been on the receiving end of both and have defended myself within the legal limits. Personally, I am not looking to run anyone out of business. I don’t have that luxury.
By: William R. Barnett on May 10, 2008
at 7:47 pm
On the flip side of that coin, there needs to be businesses that are willing to extend credit and such to subprime people. I know its a higher risk to them and thats why they charge more.
but
if no credit was extended to anyone that didnt have good fico scores and established credit, thats a whole large group of people who are denied homes, loans, products etc.
We got to face it, that there will always be people that will never attain good scores and bank accounts and will always be at poverty level. Because to get credit you gots to have credit and if all you can get is visa at 23% what do you do? You take it and try to prove yourself worthy of something better.
When my son was younger at home, he needed a new bed/mattress so bad. I had no choice but to go to a used place and by him some bed bug ridden mattress or go to a rent to own place. I chose the rent to own because thats was my only option. I was thankful i could get that.
I accept that as long as i have no good credit history that i wont get good credit extended to me but i am thankful for the companies that do allow me to take a loan, or buy a needed piece of furniture because otherwise i wuould have to do without. and there are many people just like me.
By: Latoya on May 10, 2008
at 8:29 pm
You are correct. Low credit scores make risky customers. Most banks and credit unions won’t touch you, but payday lenders will and they know that you are desperate. That’s part of their game: For you to come to them and they will greet you with open arms.
There are people that need help, but at the same time should that help be in the form of predators eager to turn a profit. I am not talking about people that make a fair profit, but businesses that use low-down tactics. They try an gain your trust with a smile and keep you using their service.
There is one thing to say, “I used the service once and everything was fine”. It’s the people that are continually using the service. Then when their payday comes, they pay off the loan, then need to take another one because they are again short on cash. This is the vicious cycle. Every time you need that loan, your lender is collecting fees. When does this cycle end? The short-term lender doesn’t want to you stop. They want you to keep coming in using the service even if you have to take out another payday loan at another place to cover theirs. It’s a revolving door.
Now, some of the payday advance people that have commented here say this is alright. According to them, they are entitled to “repeat customers” and see nothing wrong as this is just capitalism. They fail to understand the cycle of debt and how they have personally helped contribute to making their customers dependent and needy.
I hope that when this bill passes, it will bring some of the banks and credit unions out to fill the void. Perhaps, the short-term loans will be given out by more non-profit organizations. Personally, I would like to see the later. The issue has been exploitation for profit. That makes it very difficult for non-profit groups to leech off the client.
By: William R. Barnett on May 10, 2008
at 9:02 pm
In the some of the testimony that was heard by the House, Terrence Jent said:
“I hope that you will support the efforts of either of the above mentioned bills and cap the annual percentage rate for payday loans. Payday lenders will chastise these efforts claiming that it will drive them out of business. I would ask that they look into the efforts of Prospera Credit Union in Appleton, WI. Prospera makes an important point when they say you cannot regulate the predatory payday lenders out of business. However, you can compete with them. Passage of either bill would provide an environment of competition. These bills will level the playing field and open the doors to innovative, consumer-friendly financial products like the Good Money program at Prospera. ”
I am not sure how good this program is and it’s only available in WI with 5 stores, but they are working with other credit unions. This might be just another lender similar to the current “den of robbers”. Perhaps Jent is correct in saying a little competition might set some of these payday lenders on the straight and narrow. If Prospera’s model is different than the predators, then they might win over a significant portion of the market.
The current payday lenders might argue that there is enough competition, but in reality, you are all setting store up in the prime areas and suck the blood off the same customers. You are making a pretty penny do it so well. Every wonder why there are 2 or 3 stores in the vicinity. Some even share the same strip malls. Boggles the mind.
By: William R. Barnett on May 10, 2008
at 9:18 pm
I just listened to this segment from NPR:
http://www.npr.org/templates/story/story.php?storyId=90127371
It pretty much told it how it was and was an accurate report from both sides.
By: William R. Barnett on May 10, 2008
at 9:52 pm
Mr Barnett:
A couple of things:
1) Since you are so concerned about the Legislative process and that what the House and Senate in Ohio are doing is just their duty to reform the current law, why do you think it’s “vindictive” for the people of Ohio to seek to do their duty and vote against those Legislators who acted contrary to their desires when voting on this Bill. I mean, the Legislators are there to represent us and if they don’t perform to our satisfaction, isn’t it our responsibility to replace them with someone who will?
2) I live in Lucas County also and I know from painful experience that the job market here isn’t what it used to be. You talk about bank jobs, but I know from experience that many of the starting teller positions are only Part-time (20+ hours a week). Also, you may not have noticed, but when Sky Bank merged with Huntington, a number of teller positions were eliminated.
3) If payday lending is such a BAD thing, then why is the State trying to get banks to do these loans? Is 10 per 100 so much better than 15 per 100? Then again, maybe it’s alright since we know the banks are the GOOD guys.
I’ve read all the comments from the last few days, especially those from people supporting the bill and not caring how many people end up unemployed because of this ill-conceived legislation and I’m reminded of a famous quote by a German, Pastor Martin Niemuller:
First they came for the Jews
and I did not speak out
because I was not a Jew.
Then they came for the Communists
and I did not speak out
because I was not a Communist.
Then they came for the trade unionists
and I did not speak out
because I was not a trade unionist.
Then they came for me
and there was no one left
to speak out for me.
By: Tom on May 11, 2008
at 1:38 am
I think if the banks wanted to do pay advances for the people, and it was such a money maker, they would have been doing it all along.
I also find it hard to believe that the bank Ive banked at for close to 25 years would give me a pay day loan when they wouldnt give me a personal loan for 1500.00 and i offered up everything i owe for collateral. My car was worth more than 2500.00 then and they still wouldnt help me.
And, 10 bucks on the hundred still works out to a high apr if you want to look at it as an apr issue like the politicians keep harpin on.
and in my opinion, if the banks start doing them and people go there, once the usual amount of deadbeats (those who have a history of non payment) and start complaining that the evil banks are actually wanting to be paid back, we all goinga be right back here debating about the new evil PAYDAY LOAN BANKS.
just my opinion, your milage may vary
HAPPY MOTHERS DAY!
By: Latoya on May 11, 2008
at 6:38 am
Nobody asked me what I would do but im going to tell you anyways. If i was in charge i would:
set up a tri state database
everyone right now who owes more than one lender, goes into a state mandated payment plan where the stores are paid off slowly in small amounts and that person cannot get no more pay day loans for say 2 years after all the loans are paid off
one loan at a time, no more than that
no more than 8-10 small loans a year
anyone getting more than 300.00 the loan automatically adjusts to a 60 day loan.
Keep the fee at 15.00 per hundred cause i just think thats very reasonable.
Any person unable or unwilling to pay more than 2 of there payday loans in a given year would become ineligible for any more payday loans for a period of time maybe this would keep the deadbeats from abusing the system.
There ya have it, Latoyas plan of action!
By: Latoya on May 11, 2008
at 6:48 am
My point with the vindictive comment was people making a”deathlist” to target all the legislators that didn’t perform to their standard. Is that any different than you quote? There are much more worthwhile issues to cry your eyeballs out about, which is something that was suggested to me by many of you. You seem to want to live in the past, many of us have moved on already.
I actually looked up some jobs on Monster.com and searched occupations that might suit the average employee at a payday lending store. There were 126 postings in a 30 miles radius of my zip code in Toledo looking for people. The job openings are in areas of finance, office operations, counter sales, data entry, etc. I am sure given the vast experience and background of many payday advance workers, they might have backgrounds in more specialized areas such as bookkeeping, accounts payable/receivable, purchasing, etc. that I didn’t include in the search. Many may choose to move on to other vocations or further their education. We really don’t know how this bill will impact these people yet.
$10 on a $100 isn’t the point the government is making with the bill. The controls on payday lending is a capped APR of 28% and 31-day payback period with a max. 4 loans a year for each customer. Aside from that, a statewide database to track payday loans because too many people are borrowing from multiple lenders to pay each other back.
Both of you keep focusing on banks. Banks, banks, banks. That is just one piece of the puzzle. Credit unions will be in the mix as well and these institutions are much more different than banks. Also, non-profit organizations may gain a special license to handle payday loans. The vacancy of many predatory payday lenders in OH is going to open the market up to businesses that want to earn a fair profit and do it in an ethical manner. There are better companies out there to do business with and it’s not Check N’ Go, Cashland, Advance America, or any of the other scumbags raping the public.
I don’t think anyone has said this isn’t a hard decision to make. We know potential jobs and revenue are going to be lost. In my opinion, the pros to the bill certainly outweigh the cons. I absolutely care about the people that would be affected by this bill. At the same time, I care about the 300,000 Ohioans trapped in the debt cycle because of payday lenders.
By: William R. Barnett on May 11, 2008
at 9:22 am
Interesting concept for controlling the payday loan industry from someone that has argued against the bill.
Tri-state databank might be stepping over the State’s jurisdiction, but this bill is pushing for a statewide database. By the way, most of the states around OH have either reformed the lending laws or outright banned the practice.
Your proposal would be much stricter than the law in front of the Ohio Senate. According to your plan, you want to draw out some loans to 60-days and for others limit the ability to take out the loan for 2 years? Under list plan, payday lenders would certainly impale themselves on their own swords.
Now why would you want to hurt the payday advance industry with your plan after defending it for so long?
By: William R. Barnett on May 11, 2008
at 9:38 am
Excuse me for intruding but I’d like to step in. Im not here to argue or try to sway anyones opinions, I’d just like to express my experience with an advance company.
Last October my daughter was diagnosed with cerebral palsy. It was so hard having to except that my perfect baby girl had something wrong with her and i could do nothing to fix her. Everything hit like a lightning bolt, like i woke up to a bad dream. All of a sudden we have weekly appointments at childrens medical in dayton and prescription after prescription was prescribed. Now, my wife and i had pretty good jobs and made enough money to live very comfortably so we never thought any of this would hurt us in the least…i was wrong! I would of never imagined how fast medical bills add up even with insurance. We were ok until my wife was forced to quit her job to stay at home with our girl. and, i just want to say…thank god for fmla! anyways, every day has been something new…do you know how much cube chairs go for? we want the best for our daughter but have been hurting for help. 3 months ago we had to purchase some leg braces for her. after paying out of pocket for half the cost, we were short on gas and food money for her trips to childrens. Im not kidding when i say this, i went to every church in my area begging for 60 dollars, just enough to get there and back and no one could or would help. mostly, im sure, because i wasnt comiting to them. i felt like a begger, too embarressed to try another. getting to the point, i made what some people would think was the worst decision i could of made and when to a lender. ive heard the stories…never agreed with them, i never had a reason to! but, i was desperate! i actually staked the place out and went in when no one else was around! lol…kinda ridiculous thinking about it now! but, to my surprised, i wasnt looked down on..i didnt feel like a begger. it went fast. the girl explained everything to me and i understood everything. she even offered a copy of the contract, which i took and read over and over looking for those horror stories and hidden fees. it was actually easier than i expected. now, im not going to lie and say ive only been there once. ive been back a couple of times when i really needed it and it really helped! every day is still a struggle but we are looking into alternative insurance options. i understand that there are not many cases like me that borrow money, but im very thankful that this option was made available to me!
thank you for listening.
By: michael anderson on May 11, 2008
at 1:47 pm
Not really,
28% cap comes up to something like 1.38 per hundred borrowed. thats what they want for payday companies.
But the banks can charge 10 bucks per hundred and the % rate on that is way higher
All im saying is somewhere someone can think of a way for all those people not to lose their jobs and at the same time help people without putting companies out of business.
Good grief, this country has some of the smartest people in it, why cant someone draw up a equally benefiting plan for all?
By: Latoya on May 11, 2008
at 2:41 pm
Do you understand that by lengthening out the loan that you lower the APR? The rate is based on principle, interest/fees, and time. How can you say the banks will be much higher, if the bill passes? They will be held to the same 28% APR just like everyone else. ANYONE providing payday loans, whether a payday loan center, bank, credit union, or non-profit organization must follow the law because HB545 once pass is THE LAW.
So, with the current system you have:
$100 + $5 in interest + $10 in fees = $115.
This changes if you take out more than $500 up to and including $800.
$800 + $40 in interest + 72.50 in fees = $912.50.
The length of the loan is at 14-days and for a $100 loan your APR is 391%.
The payday loan industry profits when a customer repeatedly uses the service and takes out the max. amount. A payday lender doesn’t want NSF checks, they want to push loans. In some stores, $20,000 or more can be handed out in loans in a day. Also, These payment plans are just another attempt to keep you in the payday cycle. It’s not that it’s an act of humanity. It’s that according to their business philosophy, they will keep giving you loan, if you are in their good graces. Hence, “the repeat customer” dilemma.
Your proposal has 60-day loan terms for certain people, which would lower the profit significantly for payday lenders. The proposed bill has 31-day terms to repay, which puts a person in a better financial situation to pay back the loan.
Then, you say a 2-year loan ban if you are a “deadbeat”. The current model in payday lending is to pay back the loan ASAP by whatever means. If not, your check will be deposited and hopefully the money will be there. If you are overdrawn, then you are assessed further penalties from the lender and your bank. Many payday lenders will cut off a customer completely after 3 defaults. This is after making a profit off penalties and recouping the original loan.
You want to see an “equal law”? The General Assembly in OH in 1995 passed the payday lending law. Mind you this is the same governmental body that was responsible to set the rates. Now, in 2008, the law was unfair to its consumers and financially beneficial to the lenders. Now, it’s time to amend the law. The damage done by letting payday lenders in OH: 300,000 Ohioans have paid the price.
On my way to a Mother’s Day lunch, I passed 5 storefronts: 3 were operating, 1 was out of business, and the other was not doing payday loans. There were not any of the chain stores and I wasn’t on a “main route”.
By: William R. Barnett on May 11, 2008
at 3:30 pm
Vote no on HB 545. Don’t tell us where we can get our money and don’t tell us how much we can pay or how much we can loan for how long or how many.
We need these payday loans as much as the employees need us.
Pick on the banks for charging excessive rates on bounced checks. Pick on the oil companies for their gas prices.
The economy is in the tank. This is the worst time ever to close these payday loan stores.
PLEASE DO NOT DO THIS TO ME. WE NEED TO BE ABLE TO GET LOANS AND IF WE ARE NOT GRIPING ABOUT HOW MUCH THEY CHARGE, WHY ARE YOU SO WORRIED ABOUT THEM. ARE YOU LOSING SOMETHING BY KEEPING THEM OPEN?
I DON’T THINK SO.
VOTE NO, NO, NO, AND MORE NO
By: Shirley Royer on May 11, 2008
at 3:47 pm
ok then, what would YOUR proposel be that would
1. benefit customers
2. allow ohio to keep 6500 jobs
3. allow the stores to make a profit.
last month, my son borrowed 50.00 from me. His employer messed up his paycheck and wouldnt give him the rest they owed him til the next payday. When he got paid, he had to pay me back, cause i needed my money back. Now i know that left him short…and he was tempted to ask me for more time, but he didnt. and he also didnt call me evil for making him run short another week.
So in asking family for help, you still have to pay them back. Which makes ya short again. same kind of cycle especially if you got someone who keeps lending to you.
By: Latoya on May 11, 2008
at 3:57 pm
First, did you, as his mother, suggest he borrow more than the $50? Also, are you charging your son $7.50 to take out the loan and holding a post-dated check as collateral? Did you have him sign a contract to repay the law in 14-days and waive his legal rights? If he doesn’t pay back the loan, then are you charging him a late fee? If you did hold a check, then would you deposit it after 14-days, if he didn’t pay you back, and risk having his check bounce? Lastly, if he didn’t pay you back, would you show up at his house, work, neighbor’s home demanding money multiple times a day? Perhaps call him up several times a week at home or work to demand you get paid back. Or, would you just take him to small claims court, try to secure a judgment against him, and then have his wages garnished?
I doubt you would answer YES to any of these questions, but this is the process in the payday world. You admit that your son borrowing the money left him short. This is the situation that payday lenders want a client to be in every 2 weeks: complete dependency on taking out a payday loan every two weeks. On average, a customer takes out a loan almost 13 times a year. Some clients do less and some much more. They’re “renting” the same money over and over.
My proposal is HB545 as introduced to the Ohio Senate on 5/1/08. The proposed bill will still benefit customers by opening up the market for other institutions. Banks, credit unions, non-profit organizations, and existing payday lenders will still be operating. These business will fill the void left by the payday lenders that have saturated OH since 1995.
The 28% APR is still profitable to businesses that provide diverse services. In my opinion, the short-term lenders focused in one area and hoped the gravy train would never end. Payday lending should have only been a secondary service and not a primary source of business. The reason why individuals opened up payday lending locations was the easy profit and the never-ending supply of credit-challenged customers. Now, these companies failure to plan ahead has put their employees are risk. If there is anyone to blame for the loss of jobs, then it would be the payday lenders themselves.
The loss of jobs is tragic, but will happen if this bill passes. I cannot speculate on how many jobs like the payday lenders say will be lost. 6000 might be correct or it might not. The world is imperfect and jobs are lost. It happens. My response: I will take a utilitarian approach to this and use the philosophy of the “greater good”. So, 6,000 people being sacrificed in favor of 300,000 Ohioans trapped in the debt cycle because of payday lenders equals PASS THE BILL! This bill will maximize the “greater good” for Ohio and will provide a model for other states to follow across the nation.
By: William R. Barnett on May 11, 2008
at 4:41 pm
Action in Columbus as the Ohio Senators on Thurs. heard arguments on HB545: I took this from the Columbus Dispatch:
As the industry steps up its efforts, other forces are moving against it. Senate President Bill M. Harris, R-Ashland, yesterday pulled Sen. Ron Amstutz, R-Wooster, off the Senate Finance Committee, which is hearing the payday bills, and replaced him with Sen. Jeff Jacobson, R-Vandalia.
Jacobson, the No. 2 GOP Senate leader, has talked about passing a strong bill with an interest-rate cap.
The payday-lending industry says it is trying to offer alternatives that allow it to stay in business. Bill Faith, a leader of the Ohio Coalition for Responsible Lending, said one industry proposal would leave the interest rate at 367 percent.
“You can apply lipstick and a new wig, but it’s still the same pig,” he said.
Finance Committee Chairman Sen. John A. Carey Jr., R-Wellston, said that, despite meetings with leaders and interested groups, he has not heard a better alternative than the House bill, which Gov. Ted Strickland also supports.
I noticed these were all Republicans, who usually want free enterprise, choice, and less government, trying to get this Bill passed through the Senate. I love it!
By: William R. Barnett on May 11, 2008
at 5:32 pm
If someone borrows money from me and they dont pay me back, yes i would take them to court, family or not. same as i would expect any place or body to take me to court if i dont pay my bills.
you see, i taught my son that a person MUST live up to his obligations. You take a loan, you pay it back. You owe a bill, you pay it. You sign a contract, you are obligated.
I dont hold no excuses for any person over 18 who wants something, gets it then starts making excuses why they cant/dont want to pay it back.
When i take my payday loan, i am well aware that if i dont go pay it off, they going to deposit my check. If i dont have the money to cover it, then thats my problem. i signed that contract and i knew what would happen if i didnt pay it off.
When i send in my rent payment if i dont put the money in thebank to cover it, its goinga bounce. My landlord doesnt care if paying my rent puts me short, or causes me hardship. Its not his job to look out for me. Thats my job.
Fact is, unless people have savings set aside for things that come up, anything they do is going to stress their paycheck. Fact of life it is.
When you get somehting on credit, anyone with common sense knows you gots to pay it back and there are fees and interest to pay.
Any one with any common sense knows that if you dont pay your creditors, they use collections on you.
You think the banks or anyother organazition are going to be less kindly to folks who cant pay there payday loans they give them? Somehow i just cant see them patting peoples hand saying dont worry, it will be alright youdont have to pay.
By: Latoya on May 11, 2008
at 6:03 pm
Thanks Michael Anderson for sharing your story. My son was born last year with a congenital heart defect among other medical problems. He went through 3 surgeries at 3-1/2 months and is looking at another surgery this summer to correct a narrowing aorta. His hospital bill was almost $500,000 at U of M. I am grateful to government programs like the Bureau for Children with Medical Handicaps to help cover the cost. My son has a cocktail of medications similar to an elderly individual with congestive heart failure and will be dependent on Warfarin for the rest of his life due to a prosthetic mitral valve. I hope your daughter is doing well and my thoughts go out to her and her family.
I am glad to see an option was available to you and under this proposed bill, the alternative will still be there, but most of the lenders will have changed. I am not saying ALL payday lenders are predators, but a great deal of them have trapped Ohioans in the cycle of debt. Your story with payday lending had a happy ending, but it could have ended with financial repercussions and additional stress at a time that wouldn’t have been ideal.
Shirley, on the other hand, wants to rewrite the law, so the government can’t perform their duty to reform the lending laws. She doesn’t like the government making this decision for her. Well, tough luck. Did you complain in 1995 when the government wrote the original lending laws? Probably not. You might not have even know it’s the State of OH’s responsibility to write this law. She probably wants to have the public vote on it. Again, tough luck. That is not the why the law works here in OH. Thank you and have a nice day!
By: William R. Barnett on May 11, 2008
at 6:08 pm
You didn’t answer my question. Do you charge your son interest?
You seem to be a responsible borrower. What if you didn’t pay back the loan? Do you wonder what would happen? For that matter, do you really want to know how crippling it could be to you financially? Your friend really couldn’t protect you much, after all, it’s business. Take that into consideration. If you were to get deep, “all bets are off” to collect on you.
How many loans do you take out a year? How often do you use payday lending and how often does it leave you short? If things got bad, would you consider taking out loans at other centers? Don’t answer me directly, but ask yourself those questions.
By: William R. Barnett on May 11, 2008
at 6:24 pm
Wells Fargo has a Direct Deposit Advance of up to $500 at 10%, it’s automatically deducted from your next Direct Deposit (required to use the service). You can get into the revolving door situation just like with paycheck loans but WF starts reducing the amount available after 6 months until they wean you down to 0.
As a recent Forbes article revealed, most credit unions receive the majority of their income in hopes that their members forget to balance their check books. The article stated that credit unions rely on bounced check fees, overdraft protection product, and late payment fees for the majority of their income. By offering a payday loan alternative to its members, credit unions stand to lose a large portion of their income. Instead of offering payday advance loans, many credit unions have chosen to publicly participate in the fight against cash advance lenders. Some speculate that credit unions have become so vocal against these loans because they stand to lose so much.
The second reason credit unions have avoided offering a payday alternative is because they cannot offer it for substantially less than what cash advance lenders are issuing their loans for now. For example, one credit union offers its $100 “payday alternative” at 18% APR (sounds good, right?) but then they also charge a “participation fee” of $30.00. When you calculate the APR on that 30 day loan (with the participation fee) you can expect to pay 383% APR, which is about the same a payday lender. The credit union may explain away this charge by saying the risk associated with the loan justifies the higher rate. However, the credit union has unfettered access to the borrower ’s bank account and pay check through the credit union ’s direct deposit requirements. Reputable cash advance providers do not force their borrowers into wage assignment like credit unions do with their product.
Some credit unions have attempted to offer payday loans at a lower rate but with limited success. Credit unions in Pennsylvania were given government assistance (i.e. taxpayer support) to help float a low APR payday alternative. In the end, many of the Pennsylvania credit unions were not repaid by borrowers and they were forced to terminate the services, leaving taxpayers to foot the bill.
Michael New Jr. is an authority in the financial industry. He has written hundreds of articles relating to consumer services and Payday Loans.
So this summer the nation’s bank regulator released guidelines for the kind of payday loan they’d like banks to offer: Small, one-month loans capped at 36%. To sweeten the deal, the agency is offering extra credit come exam time. Every year, banks have to show they are trying to meet the federal Community Reinvestment Act by doing business with both rich and poor. The FDIC’s Bob Mooney:
Bob Mooney: We will provide very favorable consideration during the examination for a bank to offer this product.
But will that be enough for banks to wade into payday loans? Probably not if the interest rate is capped at 36%, says Wayne Abernathy of the American Bankers Association. Abernathy says on average it costs banks up to $200 in overhead costs and time for credit checks to make a loan.
Wayne Abernathy: What some banks have been willing to do is “Let me give it a try. I know I’m going to lose money at it, but I’m hoping that by starting off with this kind of a loan I’m going to create a relationship that will continue. And then in the end it will become mutually beneficial.” Others have said, “I don’t know how I can afford that.”
You may want to check out a recent NYT Article discussing a payday loan product being offered by the Goodwill, a non-profit, tax-exempt charity. The Goodwill charges customers $9.90 per $100 borrowed for the two-week term (252% APR) for their “Good Money” payday loan. And this is only to break even.
If the Goodwill breaks even at 252% APR…there is no way that a for-profit lender can offer payday loans at 36%.
By: Latoya on May 11, 2008
at 6:31 pm
A staggering national statistic:
Only one percent (1%) of payday loans go to borrowers who take out one loan per year and walk away free and clear after paying it off.
Ninety percent (90%) of payday lending revenues are based on fees stripped from trapped borrowers. The typical payday borrower pays back $793 for a $325 loan.
What has payday lending in OH resulted in?:
Ohio payday borrowers pay over $318 million in payday loan fees annually.
The average payday loan is $328 with an average APR of 391%.
The average Ohio payday borrower takes out 12.6 loans per year.
Over 300,000 Ohio payday borrowers are ensnared in a payday debt trap.
By: William R. Barnett on May 11, 2008
at 6:35 pm
I have no problem answering those questions.
I take out probably 7-8 loans a year. Never more than 50.00 as i said before, just to get some groceries to tide me over til payday. I dont take out more than i need.
I would not take out more loans somewhere else. Because if i couldnt pay back the one i had, how would i pay off 2? Would i gamble on maybe thinkin things would get better for me, or think maybe ill hit the lottery? no cause i not a gamblin person.
and yes i have charged my son interest before. a couple years ago he needed 250.00 and i was in a better position. i told him straight out, you sign this promisary, and you will pay me back and you will pay me extra 25.00 for having that money of mine. take it or leave it, up to you.
I never coddled my children or taught them they were entitled to things they didnt work for.
Good Lord man, YES if i dont pay my payday bill then all bets are off. If i rack up nsf fees at the bank over it, then thats my own stupid fault for notpaying my bill. Do i think its fair? Damn straight I do. If i dont pay my rent guess what? im out on the street. If i dont pay my automobile insurance, guess what, im having my license taken away or something.
The laws and morals of a society say you pay your bills and honor your obligations.
and my friend who works there shouldnt be put in any position to help me out as you put it. I dont need no one helpin me out if im stupid or irrisponsible enough to borrow more than i need.
i own up to my mistakes and i accept whatever conseguences might follow those mistakes.
and that Sir, is something most people have no concept of, there own personal responsibility
By: Latoya on May 11, 2008
at 6:50 pm
I will admit some financial institutions are just as bad. I don’t think anyone said they were not. Also, I thought Wells-Fargo stopped doing payday loans or significantly shut down many locations? Did you check the year on your sources?
Goodwill takes the money from interest and fees to aid other programs and cover overhead. They are NON-PROFIT. The difference is Goodwill provides other services to “break-even” and that is all they need to do.
Payday lenders won’t be able to survive on a 28% APR. They don’t operate the same as Goodwill. The article states they break-even on $9.90. The APR on their loan is 252% and is still less than most payday lenders at 391%. Furthermore, I would expect the traditional financial institutions to lose money by providing these payday loans. Yet, they will recoup the loss by providing other services. Either way, do you want the ability to get a payday loan around or not?
Anyways, it’s really is irrelevant when this bill passes. ANYONE providing a payday loan will be subject to the new reformed law. This will include credit unions, banks, and non-profit organizations like Goodwill. That pretty much makes your argument a moot point.
By: William R. Barnett on May 11, 2008
at 6:57 pm
when i go into my payday store, they always busy so i stand in line a bit. and i look around at people cause im a people watcher.
let me tell you, most of the folks in there got way more than i do. About half are talking on there cell phones. let me tell you about the clothes and cars alot of them have!
At any given time there are more new or newer cars in the lot than old rundown automobiles like mine.
Most have on expensive shoes, them there starter outfits, coordinated outfits, an you tell me, what in the world would a woman with a coach handbag, driving a new pt cruiser talkin on her cell phone be doing takin out a payday loan.
then theres a few folks like me, dressed in thrift shop clothing carying a old handbag wearin my 6.00 walmart shoes getting money for groceries.
The last time i did a payday loan the feller in front of me took out 800.00 because…….your goinga fall over, i bout did when i heard him cause he talked so darn loud….he was takin his wife and 2 kids to disney land in florida for a vacation. i mean he looked like a nice young man but all i could think of was how stupid he was.
short term emergency? please
By: Latoya on May 11, 2008
at 7:01 pm
and when the new law passes people will still face collections if they dont pay.
By: Latoya on May 11, 2008
at 7:05 pm
I love how you said you charged him interest, when he was in a better financial situation. You don’t get that luxury with payday loans. Thank you for proving my point by saying, “If I couldn’t pay back one, then how would you pay back two?” Again, this is what many borrowers are forced to do and it’s sometimes suggested by their original lender. In OH, you cannot take out another loan at the same place, but you can at the competition. It comes down to multiple loans for “one loan”.
I think you’re still missing the point of the argument. You think this is all about repayment and doing the right thing. Your borrowing is atypical of the situation in payday lending as you are below average with you habits. In my words, you would fall into the 1/3 of your lenders clients that are doing OK. Still, 2/3 of the customers are not doing OK.
By: William R. Barnett on May 11, 2008
at 7:08 pm
Yes, they will still face collections. Your point?
By: William R. Barnett on May 11, 2008
at 7:08 pm
you didnt read my post right. I was in a better position at that time so i was able to lend him 250.00 ( ic ouldnt do that today)
and how are they forced to take another loan. thats like a bank robber saying he was forced to rob a bank because his kids were hungry!
Someone suggesting you do something doesnt mean you are forced to do it. they teach that to kids about drugs in school.
Nobody forces no one to do what some people do. if thats the defense of the day, then the criminals are going to have fun with that one.
my point on the collections was….you kept saying how payday collectors call people all the time, go to their jobs, do all these things. well guess what, thats how bill collectors work whether you owe the payday company, the bank or the credit union for your car payment, then they repo your car. so no matter what changes in the law, if you dont pay…you get to play with the collectors.
By: Latoya on May 11, 2008
at 7:17 pm
You are correct. Payday loans are not working as intended. They originally started as a safety net and now they are being abused. The industry knows this and rakes in a tremendous profit to provide the service.
I remember the first time I heard about payday loans around 1998. This was a couple years after the laws passed. Anyways, a co-worker and I were out to lunch and he said he need to stop at this payday advance company. He took out the max. loan amount and then went to the bank and took out more money. The reason he need the cash was for the weekend’s trip to Put-in-Bay.
I really don’t care what payday lenders say about accommodating a wide-range of people. It depends on your demographic location. I see more stores representing several companies in the same location. Usually, right smack in the middle of the lower socioeconomic neighborhoods. Either right next to the liquor stores or lower end stores. If you drive into the suburbs, there are not quite as much. Will people that are middle-class or higher use the service. Of course, it’s SO DAMN EASY to get money QUICKLY for anyone. The industry doesn’t discrimination and is happy to hand out a loan hoping you come back 11 or 12 more times in a year.
I saw two signs today: 1st loan is free. They anticipate you will come back again.
By: William R. Barnett on May 11, 2008
at 7:22 pm
you said im just 1/3 of the payday customers that borrow responsibly. I have thought about that. What that says to me is that the other 2/3 of borrowers are not so responsibible and maybe dont make payin their obligations a priority.
Im going to concede a point here….well then, maybe….just maybe…..that 2/3 of the population does need goverment supervision and parenting. seems really sad though
By: Latoya on May 11, 2008
at 7:27 pm
Just so you know, i live in a low socioeconomic area, and its mostly lower income people here. The people i described are very repersentative of my area.
By: Latoya on May 11, 2008
at 7:32 pm
If you are faced with not being able to pay your loan back and you know your check will bounce, what are you doing to do? You can hope they have a payment plan, but like I stated before in testimony by former payday lenders, this option is seldom, if never, disclosed to the customer. Some lenders don’t even have payment plans to suggest. So, what are your options? Many can pay off that loan the same day by taking out another loan. It’s like a “stay of execution” for a short while. The alternative is to let the check bounce, take all the penalties, and you still haven’t solved the problem. Get my point?
Actually, payday lenders have to follow the Fair Debt Collection Practice as outlined by the federal government. The sad thing is many do not hoping their customer is ill-informed of the law. Repetitive phone calls during the day after leaving one message either on an answering machine or other person, informing a third party, such as a neighbor or employer about the nature of the loan in-person or on the phone, threatening legal actions like criminal charges for “passing bad checks” or threats of physical violence are all illegal tactics. Even showing up at the customer’s place of work is getting close to breaking the law. Repossession is different, so don’t even go there. That is a legal action.
If you don’t think any of the above happens as a result of some payday lenders collection practices, then you are blind. Even bill collectors for the most part are not that stupid. If anyone collecting a debt is engaging in those practices, it is unlawful. Plain and simple.
By: William R. Barnett on May 11, 2008
at 7:39 pm
I just dont like your point, its like i always told my kids, if you made the mess, then your sorry butt had better well clean it up.
and they do have options. where i go all i gots to do is call and ask for extention of the loan. and…they told me that the first time i went there, that every customer is entitled to extentions, just call before your loan is due. now ive only done that once in the 3 years i been going there. i called and they were very nice and said no problem, ask me if i needed one week or two.
so not every place does what you said
By: Latoya on May 11, 2008
at 7:50 pm
The national data shows 62% of payday borrowers are in the cycle of debt due to payday lending. This trends shows over 300,000 Ohioans to be in that same debt trap. The cycle of debt is repeated payday loans. It’s not so much a question of paying your debts, as it’s an issue of having the money every paycheck to do so. If you are financially strapped are you going to be in a better situation in two-weeks? Are you going to be able to pay off your obligations, if you have multiple loans. No, of course not, but the payday industry doesn’t care. They want you to be in this cycle to bleed you for what they can get out of the customer.
HB545 provides credit-counseling for repeat borrowers and is a long overdue benefit to this law. It limits the amount of loans you can take out a year to 4. The bill sets up a statewide database to track all the loans.
Now, you’re seeing the other side of the coin from the 2/3 of Ohioans in that debt cycle and are powerless to get out. Loans that cost hundreds or even thousands to pay off. How does anyone expect these people to do that?
By: William R. Barnett on May 11, 2008
at 7:51 pm
Edit. Last paragraph about 2/3 of Ohioans. It should read 2/3 of Ohioans that borrowed payday loans…
By: William R. Barnett on May 11, 2008
at 7:52 pm
its should say….62% of payday loan borrowers are in the cycle of debt due to their own personal irrisponsibility and lack of control concerning their finances and childish thinkin that doing many loans at once will bail them out. When they see that wont work they then cry for mommy (goverment) to come make it all better for them.
so because of them the goverment will decide where RESPONSIBLE poor people can go and get a payday loan. Because of them, RESPONSIBLE people LIKE ME will be forced to take a credit counseling if i take more loans than they feel i need???? oh i dont think so. who pays for that???
Im an adult and i will decide when or if i need counseling. Good Lord, even alcohols arent forced into counseling unless they kill somebody on the road…..
I am liking this whole thing even less than i did a week ago.
wonder what living in kentucky is like?
By: Latoya on May 11, 2008
at 8:01 pm
You have a valid point. We’re responsible to each clean up our own mess. Still, if a borrower is behind the 8-ball and can’t pay back the loan, what are the options, if a payment plan is not available? There is really only one, if you can’t come up with the money. More debt from the bank and/or the payday lending industry. If these borrowers had more financial options, then they could get out of the cycle, but they don’t. Face it. They took out the loans because it was the last place willing to word with them. The system of payday lending make it easy to get caught up in the debt cycle. One wrong move and it’s over.
Please don’t get me wrong. I don’t think your situation is anything close to the typical customer in the current payday lending scheme. You take out very little and pay it back. You don’t take too much risk with the amount and you can manage it.
You are lucky to have a payday lender that offers options and you used them when you needed.
I don’t look down at you or anyone for using the a payday loan for an honest reason. When it’s abused, I just hope they didn’t make that wrong move and get caught up in the trap. Also, I look down upon the lenders that use unethical practices to take advantage of their customers. There are plenty out there not making an honest dollar. They got into the payday racket for the wrong reasons and exploited their own community in the interest of a dollar.
By: William R. Barnett on May 11, 2008
at 8:06 pm
The research cites specifically that 62% of payday borrows in the US are caught up in the cycle of debt because of payday loans. Once again, you’re missing the point of the evidence. If it makes you feel better, then you can add some conjecture to the research. Too bad that won’t change the outcome.
Now you want to blame the victims like the payday lenders are to shift the focus off the industry standards. The payday lending business model is what caused the problem. Ohio needs to blame the industry and look no further.
I am not sure about the counseling, but it would be mandatory under the law. Most of the better payday lenders offer the service already. You might be an adult, but you have to follow the law. You probably wouldn’t be able to take out anymore loans unless you completed the counseling. Dislike it all you want.
Don’t be so quick to say only alcoholics get forced into counseling, if they kill someone. Even engaging in unlawful activity while under the influence of drugs and/or alcohol can get you in a 12-step program. The same goes for juveniles too.
That’s right. If you don’t like it, then you can move. KY is nice this time of year. Oh, by the way, the Commonwealth of KY is passing a similar law to end payday lenders as well. Everywhere you look…
By: William R. Barnett on May 11, 2008
at 8:40 pm
william, the bottom line is this. You are completely unaffected by pay day lenders and want them to be put out of business because you do not believe that anyone should have an option of fast cash based on statements from disgruntaled employees and statistics. you are not interested in the idea of a proposal from lenders to better help consumers yet stay in business. so why bother arguing anymore? you quote the same 5 -7 statistics and quotes over and over. we get it. you dont care to hear anyone else’s side, so why do you continue? last week alone, thousands of new customers took out advances. this has to tell you something. its and option…it should remain an option. people need it more now than ever!
Payday loan customers are smarter than most people give them credit for. For many people, payday loans are the right option for borrowing money. Consider the alternatives. Fees for bouncing a $100 check can cost more than 4 times a payday loan. The cost of getting a $100 cash advance on a credit card can be more than 2 times the cost of a payday loan.
* $100 bounced check with $54 NSF/merchant fees = 1,409% APR
* $100 credit card balance with a $37 late fee = 965% APR
* $100 utility bill with $46 late/reconnect fees = 1,203% APR
By: tara on May 11, 2008
at 8:56 pm
well, i think i shall just sit back and watch what happens. if they redo all this i will be watching carefully over the course of the next couple of years.
when this doesnt fix the problem (in my opinion it wont) then im going to watch and read about the newest thing they will find to blame and attack.
Why dont i think it will fix the problem?
because i am being FORCED to pay almost 4.00 a gal for gas
and i am being FORCED to pay higher and higher costs for things that i must have in order to live. (food) but i cant call that predatory even though its being forced on me.
now for me, if gas would go down and food wasnt so high, i wouldnt need to get a payday loan these days. but no body wants to address that side of the payday issue.
so, as long as things are so high and people remain irresponsible about their obligations…then nothing is going to change. We just going to change the name of the place that gave us that loan.
By: Latoya on May 11, 2008
at 8:57 pm
I am not putting anyone out of business and I can support the right for the Ohio Senate to pass this law, which is what they want despite the opposition. Personally, I think the payday lenders drain my community and as a citizen I can speak out against your industry.
You industry is doing a poor job of trying to sway the Ohio Senate. As of Thursday, your lobbyist have proposed nothing to the senators to change their minds. The best option is still HB545. An epic failure by the payday lending industry to prove their point.
I don’t even need to go into the thousands of people taking out loans. New or old. Doesn’t matter. What it tells me is thousands of Ohioans are stretched enough to the max. they need money now whether or not they can afford to take out the loan. Your industry will capitalize on that weakness. Good job, a bunch of blood-sucking leeches.
I will continue to post on here until Craig says I can’t or once the bill is passed. Which every comes first. I have citied much more evidence to support my claims. Who’s overlooking the 300,000 Ohioans in trouble thanks to your payday loan schemes? That’s right, you are!
Once again, I have the same quote you love, Tara. Your company’s CEO with his head up his rear end saying:
“And the theory in the business is you’ve got to get that customer in, work to turn him into a repetitive customer, long-term customer, because that’s really where the profitability is.”
By: William R. Barnett on May 11, 2008
at 9:08 pm
description of blood sucking leeches
oil speculators
oil executives
Hallibuton
Enron
electric power companies
drug companies
insurance companies
attorneys (ambulance chasers-sue happy)
credit card companies
By: Latoya on May 11, 2008
at 9:19 pm
By the way, how do you know if they are disgruntled former payday lending employees? I didn’t know you knew everyone that has testified against the industry across the nation. How about the people that testified to the Ohio Senate and House on this issue. Did you know them, Tara? Also, I wasn’t aware that you knew my wife and her former co-workers. Are you friends with the investigator that came from the Department of Labor to take statements too?
I suppose you think it’s all a conspiracy against the short-term loan industry. Wow. That would take so much effort to pull off. I mean state after state banning or reforming the laws. Who would be capable of that? Oh, I know…the man in the grass knoll during Kennedy’s assassination. Maybe the tooth fairy, the ghost of Christmas past, and a gang of Hell’s Angels?
Nice try…
By: William R. Barnett on May 11, 2008
at 9:25 pm
Latoya: You forgot payday lenders. predatory mortgage lenders, and Nazis. It’s hard to tell which ones are the Nazis, but I think they have the German accents.
By: William R. Barnett on May 11, 2008
at 9:27 pm
Attention: This forum has been hijacked in favor of conspiracy theorists. If you do not have a tin foil act, then ask your local payday lender and/or borrower. They hand them out after the 10th loan. It says so on the punch card.
By: William R. Barnett on May 11, 2008
at 9:31 pm
ive never once said it was a conspiracy. my point is that this is the right option for some people…..something you dont and wont understand.
By: tara on May 11, 2008
at 9:31 pm
“Hat” not “act”. Silly me. Tricks are for turning…I mean tricks are for kids.
By: William R. Barnett on May 11, 2008
at 9:32 pm
well Bill,
beings that as you said the payday lenders are going DOWN…..
who are you and me going to argue about next???
I vote for the oil people, because frankly, the gas prices are going to do me in.
By: Latoya on May 11, 2008
at 9:33 pm
You obviously haven’t read my posts completely through or you have trouble synthesizing information. Maybe the truth is too much for you to handle and you shut down? I have said on more than one occasion: I understand why people take out payday loans. I have admitted that in some instances payday lenders help people. I have supported the decision for people to take out loans. I NEVER have blamed the customer. Your industry has done enough of that already and so have many of the borrowers. I just don’t think it’s enough of a strong argument to shut this bill down with a few happy stories. Furthermore, I don’t think saving 6000 or more jobs is the right thing to do at the expense of more Ohioans trapped in the debt cycle for taking out payday loans.
Do you need to go back through my comments again because I have been clear as daylight with my understanding of the other side.
By: William R. Barnett on May 11, 2008
at 9:42 pm
Tara:
you may as well give up honey, I been arguing with Mr Barnett almost non stop for 3 days (a record for me) and the only thing i have accomplised is a sore butt from sittin so long, callusus on my fingers, learned to cut and paste, and a profound respect for his wife because good Lord, i bet that woman is never allowed to win a argument.
By: Latoya on May 11, 2008
at 9:43 pm
Once this bill passes, that’s it for me on this blog. The battle is over. Once the next problem affects my community, then I might take up the “struggle”. Like I said before in my earlier posts, my interests are in the advocacy for people of lower socioeconomic class and the overlooked populations of the US. My focus is in health disparities and access to healthcare, children’s health and development, and minority health here in the State of Ohio. I can’t sit back and watch disadvantaged groups get exploited either in their community or in the workplace.
I don’t know who the next on the hitlist. Maybe the oil companies. I once argued in an environmental health class about prohibiting the US to drill in the Artic National Wildlife Refuge in Alaska.
It’s William, by the way, only a few call me Bill. You have to had known me for a few decades to get away with that:
By: William R. Barnett on May 11, 2008
at 9:54 pm
Yes, she is getting tired of me arguing with all of you. So, like I said. Once the bill is passed, then I’m out of here. Hopefully, the vote will be in this week.
We get into some debates over issues, as like anyone, we don’t see eye to eye. Sometimes I do go overboard with an argument. She will be the first one to tell you, I am never wrong (even when I really am—I just don’t admit it).
By: William R. Barnett on May 11, 2008
at 9:58 pm
Thats ok, its really not your fault, your a man and thats just how men are (having to be right and never admiting when your wrong)
us women have known that forever.
By: Latoya on May 11, 2008
at 10:07 pm
Food for thought:
If a payday lender deposits your check and you don’t have the balance to cover it:
$100 loan + $15 payday fee + $54 NSF fee = 1794% APR (not even sure this calculation was correct, but should be close)
That is the risk of doing business with payday lenders, if you follow their logic of choosing them and really not being able to afford their service. This is what they don’t want you to know about.
Now, the customer is stuck in the same rut needing to get out of debt. This time it’s the bank charging overdraft fees. The client needs to bring the balance back up to the positive, so more money there. The last thing they have to do is pay off the original loan. As this was due to the client following their smiling payday lender.
So what are these people going to do? Probably take out another payday loan at another place. More than likely, it will be a much greater amount that they could afford with 2 or 3 paychecks. Do you honestly think the customer will be in a better financial situation having made multiple payday loans? This is the cost of “repeat business” and only benefits the payday lender.
I am out for the night, as there is a report on the news about payday lenders in Toledo.
By: William R. Barnett on May 11, 2008
at 11:04 pm
I found a video covering the House vote on 4/30 that passed HB545:
http://www.oll.state.oh.us/multimedia/organizations/media.cfm?file_id=113030&start_time=2031&organization_id=31
If you listen carefully, then you will understand where the proposed terms came from, including the 28% APR. The terms are ALREADY law with respect to the SMALL LOAN ACT in OH. Rep. Widener, who sponsored this bill, specifically cited if the payday lenders in OH followed the rules of the Small Loan Act in 1995, then we wouldn’t be in this mess.
Also, the bill requires all payday lenders to follow the Fair Debt Collection Act under Federal Law, which I was incorrect about stated they were required to do so already. Furthermore, this bill would set up bonding requirements and background checks for owners and employees. HB545 would also direct a regulatory agency to monitor the payday lending stores once a month. Finally, setting up the penalties for breaking the laws under the Consumer Sales Practice Act, which payday lenders were exempt from in OH.
“The current check cashing lending laws are not working…”
Rep. Widener
“…a landmark consumer bill…”
Rep. Mundy
By: William R. Barnett on May 12, 2008
at 1:31 pm
Really Mr. Barnett I understand you concern but the bottom line is I don’t think you understand this industry is not directly effecting you at all however when these 6,000 people lose their jobs that will. Unemployment will spike and well as people going on assistance just to feed their children because of power happy people trying to save the world guess what us people who work for and use the service know what we are into and don’t need your help. I have seen our company adopt a school and support all of their needs and it makes me proud to be a part of this. Do we all think some regulations need to be put in place yes some people abuse our service and it needs to stop but the rate cut is ridiculous to say the least. The bottom line of the whole discussion is nobody who walks into our facilities does so because it’s fun or they like it it’s because they have no choice they all know what the rates are there are no hidden fees or extra charges and it helps them avoid hundreds of dollars in bank fees that right there willl never let you get out of a hole ever bounced a check for .50 cents and not realized it for a few days then you don’t have the money til you get paid then it takes your whole check then you are behind on everything. We are there for 15.00 we just saved you over $300 worth of fees. As for you LaToya this is not a race issue at all and its people like you as to why racism still exsists so please stop there are black and white together on this issue please stop dividing an already divided issue. Its making us and you and your race look horrible.
By: Tricia on May 12, 2008
at 3:22 pm
As you have so admitted, the payday lending industry does need regulations and penalties, which were not put into place in 1995. Now, the State of OH knows this was a mistake and is trying to rectify it’s misjudgment of allowing payday lenders to “run rampant” in OH. You can keep “tip-toeing” around the issues, but it’s many of the payday lenders that have made the industry look horrible because the business was not regulated.
I don’t think you understand that this issue does affect my community, which in turn affect me. As a part of my community, I can exercise my right to speak out against the payday loan industry. Once again, you and many others fail to understand this is not about “power happy” people. The State of OH set the rules for payday lenders and now they are reforming the law, as it’s their duty and responsibility to set the terms.
If you want to talk numbers and throw the 6,000 people figure around, then try choking on more than 300,000 Ohioans caught in the debt trap because of the payday loan industry.
By this way, Tricia. More commas and periods. They are your friends, as your response was hard to read and was an eyesore.
By: William R. Barnett on May 12, 2008
at 3:40 pm
Sorry, I might not have been clear enough with my response after looking over your comment again. I am not saying the regulations just need to be in place for customers. I am more concerned about strong regulations for the payday lenders, including monitoring, background checks, and stiff penalties for those who break the law.
By: William R. Barnett on May 12, 2008
at 4:15 pm
Tricia:
I done admitted my mistake on that, many many many posts ago, you must have missed it.
By: Latoya on May 12, 2008
at 6:02 pm
Ohio payday lenders should start worrying
The payday lending industry, as it currently does business in Ohio, appears to be on life support.
The two top Republicans on the Senate Finance Committee said today they have rejected the payday industry’s latest alternative plan and are ready to move forward with a House-passed bill that would slash interest rates, boost loan terms and limit borrowers to four loans per year.
“I think the spirit of the bill is going to be the same,” said Sen. John A. Carey Jr., R-Wellston, chairman of the committee, said of House Bill 545, which is scheduled for a vote on Wednesday. He said the changes would be technical in nature.
On late Friday afternoon, payday lobbyists John Rabenold and Darryl Dever sent Carey and other senators a new proposal modeled after current law regarding credit unions. It would allow lenders to charge $10 per $100 borrowed over two weeks, and also charge borrowers for taxes paid by the business and the costs of any government mandates.
Both Carey and Sen. Steve Stivers, a Columbus Republican and committee vice chairman, said the plan would have left lenders with nearly the same $15 per $100 charged today (391 percent annual percentage rate).
“If we are just going change the curtains and say we’ve made a major home renovation, I don’t think anybody is going to buy that,” Stivers said, adding that he will support HB 545.
The payday industry has said the HB 545 would quickly put their 1,600 stores out of business, and put 6,000 workers out of jobs.
Posted by Jim Siegel, Statehouse reporter on May 12, 2008 6:26 PM
By: William R. Barnett on May 13, 2008
at 8:43 am
The Ohio Senate schedule for tomorrow, 5/14, includes:
Finance and Financial Institutions, 9:30 AM, Finance Hearing Room
Chair: Carey
Sub HB 545 Widener, 4th Hearing, No Testimony**(***)
Short term lending – regulation
**Possible Vote
***Possible Amendment/Substitute Bill
By: William R. Barnett on May 13, 2008
at 10:37 am
Senate Finance Chair: Payday Lending Rate Cap Will Stay
Senators may tweak a bill to overhaul payday lending, but the essence of the contentious House measure will likely clear committee in time for a floor vote Wednesday, the Senate Finance chairman said in an interview Monday.
Although lenders have floated several alternatives, the Senate Finance & Financial Institutions Committee will likely leave unchanged the proposed 28% annual percentage rate cap on the short-term loans, Sen. John Carey (R-Wellston) said.
“We’re looking at ways to encourage payday lenders to go under the Small Loan Act as it is in current law,” he said. “You can have origination fees under the Small Loan Act. The difference is it’s not repetitive loans.”
While the measure (HB 545*) sponsored by Rep. Chris Widener (R-Springfield) would prohibit origination fees, the current Small Loan Act permits lenders to charge $15 on loans less than $500.
“The payday lenders say they can’t operate under that, but that’s probably the best we’re going to be able to do,” he said. “Not all the payday lenders would transition to that, but we think at least some of them would.”
Sen. Carey said he hopes to pass the bill out of committee Wednesday morning in time for a floor vote later that afternoon. “I think we’ll have the votes.”
Posted by Dave Harding on Progess.org website, May 13th, 2008 at 7:03 am
By: William R. Barnett on May 13, 2008
at 12:32 pm
I also managed a Cashland on the border of WV,where gambling is legal, I feel many of the loans we made went straight into the slot machines….I felt very sorry for the elderly that borrowed money to pay for medication(that is where our government should step in) many of our customers lost their jobs due to our depressed area, what do you think think happened then?? We had to deposit their checks knowing they would bounce costing the customer another $10-$35 then to add more fuel to the fire,
we could and did run the check thru again costing another $15-$35. Possibly costing the customer $70. on a $100 loan. When someone is only getting $400. for a month that really takes a bite out of what they have to live on. They cannot loan again, then their financial problem gets even worse. all from the $100. loan. Many people need counceling on money managment, Ohio should establish several in every city that is permited to open a payday loan business. Yes it is good for some people but as a whole it steals from the poor and uneducated. I am for the hb 545.
By: mary spears on May 13, 2008
at 2:06 pm
I was telling my wife last night about a quote I read somewhere about a payday customer coming out of a loan center. He was taking part in a survey and when asked about his experience with cash advance loans, he said:
“I am glad I get that extra check from them between paydays..”
I will let you ponder that quote…
Mary’s personal experience with Cashland (as an employee) is just another example of CEO Feehan’s philosophy about “turning the customer into a long-term borrower”. Make me think of sick perverts that turn teenage runaways into prostitutes.
The end is near for them…
By: William R. Barnett on May 13, 2008
at 4:01 pm
lol…nice example. seems a tad bit ridiculous.
what happens, william, if the bill is not passed? are you going to try and appeal it yourself?
By: Karen on May 13, 2008
at 6:07 pm
Payday lenders propose new fees
Payday lenders have proposed a way the legislature can impose interest rate caps on them and — at the same time — allow them to charge more for loans.
The proposal, though, could be dead on arrival.
A Check ‘n Go vice president delivered a proposal to Sen. John Carey over the weekend that proposes new fees that could be passed along to consumers who take out the short-term loans.
Carey heads the Senate committee that is considering HB 545, a bill that would force payday lenders to abide by the usury laws that cap interest rates at 24 percent.
“We’re just trying to stay in the game,” said John Rabenold, the Check ‘n Go executive who offered the proposal. He said HB 545 could put payday lenders out of business, harming working families.
Tom Allio of the Coalition for Responsible Lending said payday lenders have no one but themselves to blame. “The industry’s in the position they’re in because of their uncompromising approach,” he said. “Through all these months, they’ve had many opportunities to morph into a different business model.”
Under the industry proposal, payday lenders would operate under a rarely used section of the Ohio Revised Code that allows credit unions to charge 18 percent APR and up to $10 for every $100 borrowed for a one-month period. A lawyer for Ohio’s credit unions said none of them make loans under the statute.
But the proposal that set consumer advocates howling was Rabenold’s suggestion that the legislature level the playing field between member-owned, nonprofit credit unions and for-profit payday lenders by allowing payday stores to pass along to consumers a “tax recovery assessment” fee.
Bill Faith, a member of the Ohio Coalition for Responsible Lending, derided the charge as a “pay my taxes” fee that could shoot the cost of the loans to well above the current 391 percent APR.
The American Financial Services Association, a trade group that represents payday lenders, said Faith’s calculation that the APR could be 469 percent for a first-time loan was “blatantly false.” The group has said it does not believe that an annual percentage rate calculation of interest — which consumers can use to compare the cost of credit, regardless of the term of the loan — should be applied to the two-week loans.
It’s unclear whether any senator is willing to run with the proposal. HB 545 passed overwhelmingly in the House and could be up for a floor vote in the Senate as early as Wednesday.
The lenders’ plan may have been moot before it was even proposed. John Kozlowski, general counsel for the Ohio Credit Union League, said his group agreed late Friday not to protest the removal of ORC Section 1733.25 (F), the statute the payday lenders wanted to be regulated under.
Credit unions originally sought that section of the law to relax interest caps so they could develop loan products to compete with the high-cost payday loans. But Kozlowski said credit unions haven’t used it.
“Basically, credit unions became a little more creative,” he said. Kozlowski said credit unions came up with short-term signature loans and with payday alternatives like StretchPay, both of which come in under the state’s 24 percent interest cap.
Carey was touring Southern Ohio with Gov. Ted Strickland Monday and didn’t return calls. But Amanda Wurst, a spokeswoman for the governor, said Strickland would not support any attempt to get around an interest rate cap.
Roughly a dozen states have outlawed payday lending by refusing to exempt lenders from usury laws.
Posted by Sheryl Harris on Cleveland.com website, May 12, 2008 18:25PM
By: William R. Barnett on May 13, 2008
at 6:44 pm
omg Craig. People are going ape sh*t with this blog post. It’s crazy how many people found out about this because of your blog.
By: Katherine on May 13, 2008
at 9:25 pm
Payday train coming down the tracks
The payday executives hanging outside the Senate finance hearing room Tuesday were a despondent lot. Not only were they preparing to lose the fight over tough, new regulations of their industry, but the other side was running up the score.
“I’ve never seen anything like this,” was a common refrain from payday execs and lobbyists alike. Inside, the Senate Finance Committee was taking more testimony on House Bill 545, a bill that should pass committee and the full Senate on Wednesday with few changes. It would slash interest rates, end the two-week loans that are the bread-and-butter of payday lenders, extending terms to at least 31 days, and limit borrowers to four loans per year.
By the time it passes, the bill is still expected to be stronger than what the Coalition for Responsible Lending was calling for in its initial proposal.
While Senate President Bill M. Harris, R-Ashland, said he hopes that payday lenders would transfer over to the new small-loan product. “All I’ve heard from this point is that they need to keep current law. But I think their attitude is changing relative to the small loan.”
Well, not according to payday execs on Tuesday. “Anyone who believes that the Small Loan Act is our savior knows nothing about finance and even less about what our customers want,” said James Frauenberg II, senior vice-president of Dublin-based CheckSmart, which operates 105 stores in Ohio.
At one point, CheckSmart was considering stopping all loans as of Tuesday afternoon. But executives later changed their minds.
Payday lenders continued to say their 1,600 stores will quickly go out of business if the bill passes, putting 6,000 people out of work. The Coalition for Responsible Lending has argued, apparently successfully, that the payday business model of two-week loans and high interest rates is inherently flawed, forcing people into a debt trap where they must repeatedly take out new loans to pay off old ones.
W. Allan Jones, CEO of Tennessee-based Check into Cash, which operates 92 stores in Ohio, said “our No. 1 customer is a female school teacher with unexpected car repairs.” He added, “You can blame it on Bill Harris. He’s the one who made the decision in the caucus not to work with us. I guess up here, you all just need one guy.”
Then Jones remembered Sen. Jeff Jacobson, R-Vandalia. “The only negative person speaking on that committee in there is Jacobson, and we’re going to lose the vote because of him.”
Jacobson, who was recently named to the Finance Committee to deal with the payday bill, doesn’t mind the heat. “The only alternatives we were being given was a repackaging of where we are today,” he said. “That made it difficult to see a resolution.”
Posted by Jim Siegel, Statehouse reporter on May 13, 2008 8:17 PM |
By: William R. Barnett on May 14, 2008
at 8:10 am
HB 545 passed by the Ohio Senate today 5/14 with a vote of 29-4.
By: William R. Barnett on May 14, 2008
at 2:49 pm
The Ohio Senate voted today to pass a stricter law that restrains one of Ohio’s fastest growing businesses. Today’s legislative step is monumental in protecting Ohio consumers and is long overdue in trying to control the payday lending industry. The 1995 payday lending law, which contributed to over 300,000 Ohioans being trapped into the debt cycle, was deficient, but now has been reformed under a more comprehensive configuration by taking its language from the Ohio Small Loan Act. Under the new guidelines, payday lenders must adhere to a 28% APR and loan repayment will be extended to 31 days. Payday customers will be limited to only 4 payday loans a year. Equally important, are the provisions for credit counseling, regulations, monitoring, and penalties for all businesses that choose to offer payday loans. Moreover, payday lenders must adhere to the same debt collection practices under the Fair Debt Collection Act, as prescribed by Federal Law. Here are my final thoughts on why I supported House Bill 545 and perhaps an insight into the overwhelming support from the Ohio General Assembly:
The current law was flawed by granting too many exemptions for payday loan lenders. As a result, many payday loan companies were able to exploit communities for profit through whatever immoral and unethical means they deemed necessary. These businesses hid under the guise they were only providing a service and didn’t take responsibility for the industry model of nearly inescapable repeat borrowing that was to blame. Furthermore, the 1995 law in Ohio was written with the help of advocates in the payday loan industry. Ohioans don’t need to look any further to see this was truly the case over the past week. The opponents of House Bill 545 continued to be motivated by greed in trying to draft an alternative proposal, which would have been no different than the current payday law.
The passing of House Bill 545 by both the Ohio House and Senate was an attempt to rectify the mistake made in 1995 by passing a payday loan law that heavily favored the lender. The reasoning of the General Assembly at the time was that competition would drive down the rates, but this wasn’t the case. Instead, the payday loan market was ripe for business owners to charge the maximum rate under the law and the industry saturated Ohio with storefront after storefront. This phenomenon has best been observed through the tremendous growth of payday loan centers from 107 in 1996 to 1,638 just the last year. In addition, the payday lending model of encouraging repeat borrowing compounded the problem even further by presenting a service that catered to credit-challenged and sometimes undereducated customers. Consequently, a stronger law needed to be created to level the playing field for payday loan customers.
In closing, many of you have spoke out against House Bill 545 by communicating to our Ohio legislators or protesting at the Statehouse. These actions were all in your right to exercise and it’s comforting to know there are still individuals that can band together against an issue. Still, many of you wanted to accuse Ohio’s legislative process of being unfair to the supporters of the payday loan industry. Many of you fail to remember it was through the same process that the payday loan law was created in 1995. Now, in 2008, the tables have turned in favor of reformation and the payday supporters want to cry “foul”. The issue of payday lenders is not up to the general public to decide, but the responsibility of the State of Ohio.
For those wishing to comment further on this issue and would like to solicit a response from me, then you can re-read this final response and previous comments on the issue. I think I have argued my side enough for you to understand where I am coming from with my points. Lastly, I urge everyone to listen to today’s session of the Ohio Senate on the Ohio Channel and take note of many of the Senator’s statements on why they supported this bill, as they sound quite familiar to what I have discussed here. Again, I thank Craig and everyone that posted on his blog for their time. Good luck to all!
By: William R. Barnett on May 14, 2008
at 3:10 pm
William
Do you notice?
1) Quick conclusion less than a month for impotant issue.
2) They regulate business but not Gas price (future trading for crude oil, will not effect immediate pricing).
3) Why need law to handle this topic? Why not let Bank or Credit union come up with solutions?
You just want to hear only the thing that you think it’s right.
Good luck Ohio
By: Jared on May 14, 2008
at 11:25 pm
Unemployement here we come!!!! Forget the evil credit cards, The rental places, The Oil companies. Lets beat down the people who are trying to help the “REAL AMERICANS”. The seniors who can’t pay for medicine, the mom working two jobs trying to keep up, the family without adequete insurance who’s son just broke his arm. The blue collar people that keep the country running. The people that need help, that know the fees, that choose to take care of their families. Thank you Ohio Senate. Im sure you have done us a huge favor. Later today when I go to file unemployment, apply for Medicad and the Ohio Directional card I will keep you in mind because yesterday I was a pay day employee with good wages and good insurance and today I am unemployed. And these are just the facts
By: Jamie Michael on May 15, 2008
at 2:12 pm
Alright Mr. Barnett you got what you wanted the bill has passed if only you could be here when our VP had to bring 250 people to the center of the building and tell us all that our future is extremely uncertain. Please feel free to correct my spelling and puctuation this is not a paper I am writing it is a blog FYI I am college educated and was top of my writing class. It’s passed now I guess we are left to fend for ourselves. I am one of the lucky ones who will have a position until at least summer time they are hoping others are not so lucky. I see all points of this issue obviously since I am working on the collections end of this matter so trust me i see it but i also know how many people don’t end up on the phone with me.
By: Tricia on May 15, 2008
at 4:26 pm
Today, Cash America stated that they may close about 139 Ohio Cashland stores:
“The Fort Worth, Texas-based Cash America, parent company of Cashland stores, said it is reviewing its options and anticipates closing the stores only if the legislation is enacted into law and the company can find no way to offer alternative financial services that would cushion the impact of the law.”
By: Craig on May 15, 2008
at 10:16 pm
Bill Faith and the state of NOHIO don’t care who they hurt long as their agenda is reached.
For a state to try to get rid of a whole entire industry you can betcha that theres somebody and or some other industry (banks?) that wants that money in their pocket.
They doing this cause they care about me? you? all the other payday loan customers? i dont think so. if the goverment really cared about us all, they would do somehting bout the gas prices and food prices.
Care about us? not on your life. only time they care bout us is when its voting time.
By: Latoya on May 16, 2008
at 5:24 pm
I wonder if X-Atty General Marc Dann’s 17 month administration and impeachment timing had anything to do with the payday lenders?
Sounds fishy huh? same day he resigns is the same day 545 was passed. Now the real loan sharks out of Youngstown will be doing some knuckle busting.
good luck ohio its a sad time for us!
By: saddayinohio on May 16, 2008
at 8:00 pm
A sad day indeed. I’ve been pretty depressed facing impending doom. I have nothing to say to my customers when they ask what will happen to them as customers and me as an employee. The outlook is grim. Yes, the company is scrambling to find something to keep us all employed (approx 1700 at my company alone). But who knows? Guess all of those supporting this bill are excited… no idea why?? Now that it looks like it will become law soon, how exactly again is that going to help the accusers of payday lending? I forget. Will they sleep better at night knowing that the loan sharks are going down? Will they be comforted knowing that their fellow Ohioans are FINALLY “safe” from us “predators”? Will they avoid certain finacial disaster? Oh, that’s right. Probably not. Most people that so hotly debated this issue stated that they would “never” get a payday loan. So I guess it won’t affect their day at all. I kinda wish people that aren’t educated about certain topics would just bow out and leave it to those who do know it, live it and have the potential to be very personally and deeply affected by it. William B must’ve been a VERY BORED man!! Why, he spent days and days crusading against those big, bad payday lending companies, only to admit that the issue meant nothing whatsoever personally. I know he’s signed off for the last time, but I hope he’s terribly happy!!
By: Kelly Johnson on May 16, 2008
at 11:24 pm
To all the payday employees out there:
Me and all the other people out here who are customers or just neighbors of you all are praying for you, that you keep your jobs and we all get to keep makin our own choices.
im joining up to help this group fight this injustice
http://citizensforresponsiblegovernmentinohio.org/
You all have always helped us and been straiht with us, so some of us customers are going to try to help.
By: Latoya on May 17, 2008
at 6:47 am
Thank you, Representative Widener.
Thank you, Representatives Koziura, Batchelder, Budish, Stewart, D., Boyd, DeBose, Driehaus, Dyer, Foley, Garrison, Gerberry, Hagan, R., Letson, Luckie, Lundy, Newcomb, Peterson, Skindell, Stebelton, Sykes, Wagner, Widowfield, and Yates.
Thank you, Senators Jacobson, Cafaro, Roberts, Miller, D., Fedor, Miller, R.
The people of Ohio spoke and you responded.
Thank you to the government of Ohio for a job well done. The day that this bill is presented to Governor Strickland and signed into law should be declared an official Ohio holiday. We will finally be rid of these scum sucking leaches. And not one bounced check fee, garnished paycheck, or bankruptcy too soon.
By: IndigoMoon on May 17, 2008
at 12:32 pm
Ren,
Whats with the hostility??? Do you owe money at a cash advance store?? What is your education? My father always said that you shouldnt call someone an idiot unless you are sure you are smarter than them. YOU ARE NOT SMARTER THAN ANYONE. Where did you pull that Sally Struthers joke from, South Park?? You are a petty piece of trash. I hope your place of work(if you even work) tells you one day after 4 years of employment they must let you go. Let me know so I can laugh at your “e-tears”. You are pathetic.
By: Joy on May 20, 2008
at 2:20 pm
I can honestly say that I looked up the people who have blogged against payday lenders on this site and most of them have a vendetta because they owe us money.
By: Joy on May 20, 2008
at 2:25 pm
So what is your education again??? Or did you learn all you know from stupid shows like Ren and Stimpy?? I dont watch stuff like that. My parents didnt raise me in front of a television but apparently yours did. I would have had to mention a name to break confidentiality you “ideeot”. Wow. Calling me dumb. Isnt that the pot calling the kettle black. Are you embarrassed about your education??
By: Joy on May 20, 2008
at 4:22 pm
So what is your education again??? Or did you learn all you know from stupid shows like Ren and Stimpy?? I dont watch stuff like that. My parents didnt raise me in front of a television but apparently yours did. I would have had to mention a name to break confidentiality you “ideeot”. Wow. Calling me dumb. Isnt that the pot calling the kettle black. Are you embarrassed about your education??
By: Joy on May 20, 2008
at 4:24 pm
Also, its not hard to find a person when they include a first and last name, and mention specifics about their careers.
By: Joy on May 20, 2008
at 4:25 pm
Ren.
THAT was your last comment to contain rude language toward others.
This is MY BLOG and people that have left comments here, while not seeing eye to eye, have remained civil for over 300 comments.
You will NOT just run your mouth insulting others on my blog. If you want to be rude go start your own blog.
Any more comments from you that are close to what you’ve posted so far will result in deletion of all your comments.
By: Craig on May 20, 2008
at 4:56 pm
i think its funny the only people that are defending the cash advance places are their employees. i am one of those people who got cuaght in the circle for over a year now and am on first name basis with the company i go through. the employees came to my fiance’s baby shower. I am extremely happy with this bill and to all you pdl employees out there complaining about this, look to your corporate heads and blame them becuase the government has been trying to work to come to an even ground and all your money hungry corp. heads would do is say no. So the state fought back and now they are saying NO. SO thank your bosses for this and thank them if they shut you down because the bill doesnt say you cant do business anymore, it just regulates it now. So when you are at the unemployment line dont blame the government who will be paying your unemployment, thank your corporate heads who couldnt think about anything more than lining their pockets with the biggest money scam of all time.
By: neal on May 20, 2008
at 4:58 pm
Ren Hoek,
Your insulting words and name calling just ruined all credibility that you might have had.
By: Latoya on May 20, 2008
at 4:59 pm
Craigs da man!!!
Thanks Craig
By: Latoya on May 20, 2008
at 5:02 pm
Sometimes you just have to ignore the children. They will then get bored and go find some where else to play.
On a happier note, my lender told me today that there company is looking for different ways to do loans and they might not close. My first thought was ALRIGHTTTTTTTTTTTTTTTT!!!!!
my second thought was…oh man thats going to make a lotta people mad that wanted them shut down.
By: Latoya on May 20, 2008
at 5:37 pm
Well he kept at it and tried to add more crap to my blog so all of his comments are deleted.
By the way, his email, while perhaps fake, was
(a name)@shutdownpdl.com. Is that a real group or did he just make something up?
By: Craig on May 20, 2008
at 10:19 pm
In the beginning, Crom created the PDL and gave its gift to his loyal follower, Conan, as it was written in the scrolls. Many centuries later, Thulsa Doom was defeated by Conan in 1995, which brought forth the PDL to Ohio. Many welcomed the PDL with open arms, but little did they know there was sorcery at work.
In the halls of Campbell Hill, Sauron crafted the One Ring to enslave the people of Ohio by keeping them in the Cycle of Debt. For almost 12 years, the Free Peoples of Ohio suffered under the wrath of the ring…or was this tyranny just a web of lies to destroy the PDL? In order to combat this myth of the Cycle of Debt, William Wallace rose forth to meet his enemies head on at the Battle of I-75. In the words of Wallace “…you can take our PDLs, but you can’t take our freedom!” His words won the day, but in 2008, a sinister plot was unfolding in the Republic Senate. Who would stand up to meet this menace?
It was Frodo Baggins that joined forces with a Jedi Knight called Obi-Wan Kenobi. Together, they would make a voyage to Columbus to reveal the true evil threatening the PDL. When they arrived there, the Cycle of Debt myth had worked its way into the Senate. Also, the Ohio Statehouse had been transformed into the ultimate power in Ohio: A fully-operational battle station that could destroy the PDL.
The time had come for Kenobi to again meet his old apprentice, Darth Faith. Both became locked in a lightsaber duel, but it would be Kenobi that would be defeated. Upon seeing the death of his friend, Frodo returned to his hobbit hole in Canal Fulton. Meanwhile, in the Senate, the votes had been cast against the PDL and soon Darth Faith could sweep the remnants of the PDL away. In a quote to the Republic Senate, he said: “This will be a day long remembered…it has seen the end of Kenobi and will soon see the end of the PDL”. The final decision is in the hands of Grand Moff Strickland.
Eventually, Conan, William Wallace, and Frodo would return to each claim a kingdom by their own hands.
But that is another story…
By: Hugh Utterback on May 21, 2008
at 9:24 am
DMX. weighs in on the PDL situation in Ohio by re-writing the lyrics to the Ruff Ryder’s Anthem. Here is an excerpt:
Stop. Drop. Shut ‘em down. Close the PDL shop. Oh, No. That’s how the CRL rolls.
Stop. Drop. Shut ‘em down. Close the PDL shop. Oh, No. That’s how the CRL rolls.
Lenders wanna try (what).
Lenders wanna try (what).
The borrowers wonder why (what).
PDLs will die (what).
All I know is greed (what).
While all my clients bleed (what).
How will they maintain? (what).
When the APR’s insane. (what).
By: DMX on May 21, 2008
at 10:34 am
Latoya,
Our company is working to find new loan products for you guys. Dont worry. They have been telling us that they have no intentions of closing down.
By: Joy on May 21, 2008
at 10:56 am
The surviving members of the Beatles, Paul McCartney and Ringo Starr have decided to re-write the lyrics to Yesterday and changed the title. The new song will be aired on the radio to honor in the new law regulating payday lenders in Ohio. Here is an excerpt:
Payday
All that profit seems so far away
Now it looks as though the bill will stay
Oh I believe in your payday
Suddenly,
The APR is much less than it used to be
There’s regulations hanging over me
Oh, payday
Came suddenly
Why they
Had to vote I don’t know
I wanted nay
Now they
Passed the law
Now I long for your payday
By: Sir George Martin on May 21, 2008
at 2:39 pm
I am doing a persuasive presentation in my speech class and I need sources. If anyone knows any good websites with credible sources please let me know. I need citations for both arguments(for and against). Thanks:)
By: Joy on May 27, 2008
at 11:27 am
[...] Ohio blogger writes… I wasn’t surprised to see this Cashland branch is opposed to House Bill 545 because they [...]
By: What “benefits of the bill?” on May 27, 2008
at 3:39 pm
If payday loans cause as much trouble as the critics claim, then why are there so few complaints and why do customer satisfaction surveys show such a high level of satisfaction with the product? There are a lot of statistics at:
http://www.cfsa.net/get_the_facts.html
In the 2004 Customer Satisfaction Study done by Cypress Reseach Group 2000 customers were interviewed. The most telling result:
“In comparison to other credit products with which respondents had recent experience, customer overall satisfaction with payday advance (75 percent) was second only to check overdraft protection (83 percent). It also ranked higher than a home equity line of credit (71 percent), major credit card (70 percent), loan with a bank or credit union (69 percent), and a car title loan (69 percent).”
The fact is that the APR of a payday loan tells you nothing about how profitable the loan is for the lender, because it ignores his cost in making the loan, and it tells you nothing about how wise the transaction is for the consumer, because it ignores his other alternatives. The APR of small-dollar short-term loans must be high compared to other types of loans, due to the high ratio of the cost of making the loan to the amount being lent. But that doesn’t mean a payday loan isn’t a valuable option for people who don’t qualify for cheaper forms of credit. Researchers from George Mason University and Colby College recently found that “access to payday loans in their environment, all else fixed, increases a borrower’s probability of financial survival by 31%.”See http://www.reuters.com/article/pressRelease/idUS164798+06-Feb-2008+PRN20080206
If a 365% APR was “outrageous” then the statement “I will lend you $100 today if you will pay me back $101 tomorrow” would be an outrageous statement, but it obviously isn’t. In fact most people would not make that statement because they wouldn’t want to risk losing $100 for just $1 in profit. And that doesn’t even consider any cost whatsoever in making the loan.
Of course some people take out too many payday loans and get themselves into a bind. Many people overeat desserts and make themselves sick, but does that mean we should place a cap on the percentage of fat and sugar allowed in ice cream? Of course not. The answer is proper education to warn people of the dangers of being irresponsible, not curtailing what should be the inalienable right of a merchant or service provider to set his own price (if the business isn’t receiving government assistance or making use of limited public resources) and the inalienable right of a consumer to make his own choice with regard to which offerings he wishes to avail himself of. If the government can tell a lender how much he can charge, then why can’t it tell every doctor, lawyer, and free-lance secretary how much they can charge as well? Then we have a state where politicians govern every aspect of our lives based on all kinds of dubious motivations.
The critics call payday lenders “predatory,” but just the opposite is true. A predator is a creature which leaves its prey no choice, whereas payday lenders only make loans to people who choose to use the product and who come to them. It’s the opponents of payday lending who want to take away choice, and thus they are the ones who are predatory.
And calling payday lenders loan sharks is in my opinion nothing short of libel, since loan sharks are generally thought of and portrayed in the media as people who use violence to collect on illegal loans which is certainly not the case with payday lenders. In fact, it is usury laws which create loan sharking in the first place. Usury laws, in my opinion, are a theocratic, authoritarian tradition which needs to be abolished just as we abolished the tradition of slavery. If the free market should work properly anywhere it’s in the field of small loans as so many people can enter the business with so little expertise or expensive equipment.
Shutting down payday loan stores by capping the interest rate so the product becomes unprofitable will not save Ohioans money. They will end up paying more money than payday loans currently cost them on bounced check fees, credit card late-payment and overlimit fees, utility reconnection fees (plus having to endure the trauma of having their power turned off), lost wages or lost employment when their car brakes down and they can’t get it fixed quickly so they can get to work, higher medical costs as a result of not being able to buy medication when they need it, and late rent-payment fees if they are not evicted altogether – which of course is a thousand times more serious than any problem caused by payday loan debt which the debtor can just file bankruptcy to get rid of.
If the critics want to help the relatively small number of payday loan customers who can’t resist the temptation to borrow more than they can reasonably pay back and who get themselves into a bind, then they should offer them – or lobby the government to offer them – free credit counseling, no-profit loans, or anything that is a better alternative for them than a payday loan. But don’t trample on freedom and take away both the lenders’ right to earn an honest livelihood and what has been shown by numerous academic studies to be a very important financial option for many people who do not qualify for cheaper forms of credit.
A few points that were missed in this debate:
William Barnett quoted a statistic that’s been widely reported in the press, that the average payday loan borrower ends up paying back $793 for a $325 loan. The Center for Responsible Lending has been telling that to the press, which has been reporting it as gospel. Meanwhile, Veritec Solutions, Inc., the company whose data CRL relied on in coming up with that figure, subsequently issued an analysis flatly stating that CRL misinterpreted their data. They wrote:
“Veritec finds that the following conclusions made in the CRL Report are not an accurate reflection of statistical information published by Veritec in the referenced reports.
1. That the study finds that ninety percent of payday lending revenues are based on fees stripped from trapped borrowers.
2. That the study finds that the typical payday loan borrower pays back $793 for a $325 loan.
3. That the study finds regulator data corroborates high levels of loan flipping and that regulator data confirms that most borrowers renew payday loans many times per year.”
The analysis can be seen at:
http://www.veritecs.com/CRL_Whitepaper_Analysis_R1.pdf
What CRL did was take the several loans that the average payday loan customer takes out within a year’s time and treat that as a single loan, which is entirely deceptive and bogus. There’s more on that at:
http://www.rtoonline.com/content/Article/Dec06/PaydayLoanStudy120806.asp
and
http://www.rtoonline.com/Content/Article/Aug07/PaydayLoanIndustryWashingtonPost080307.asp
The Consumers Rights League has issued its own report on the Center for Responsible Lending. See “Predatory Charity: The Self-Interested Self-Help of the Center for Responsible Lending” at:
http://www.consumersrightsleague.org/News/DocumentSingle.aspx?DocumentID=21850
I can’t comment on the veracity of that report but it does raise some interesting questions.
Additionally, the Canadian government commissioned the reputable accounting firm Ernst Young to research the payday loan industry and EY issued a report showing that it costs payday loan stores over $20, on average, to issue a $100 payday loan. This proves that short-term loans cannot be made profitably at anywhere near a 36% APR as payday lending critics claim. That report can be seen at:
http://www.cpla-acps.ca/english/reports/EYPaydayLoanReport.pdf
Try considering the facts of the matter, Mr. Barnett, before calling people who are providing an honest, valuable service loan sharks. Payday loans, in some cases, do save families from being evicted in the dead of winter, do save people from not being able to buy prescription medication when they need it, do save people from lost wages or losing their jobs when their car brakes down and they need to get it fixed quickly so they can get to work, and in general do provide necessary assistance in EMERGENCIES which in some cases is not available from any other source. Even if such cases represent a small percentage of payday loan transactions, they nonetheless need to carry large weight in any consideration of whether the product should be banned.
And remember the only people who pay somewhat long-term payday loan fees are those who take out a loan promising to pay it back in full in two weeks, and then when their payday comes around they not only don’t pay the loan back in full but don’t pay a single penny towards the principle. If they simply paid down the loan they wouldn’t get caught in a “cycle of debt.” Maybe such people have a drug or gambling problem, or maybe they have high medical bills and genuinely can’t make any payments towards the principle. In the former case they need to get bad results from their bad habit so they can give it up, and in the latter case they simply have to file for bankruptcy to get their debts discharged, as many people who face unfortunate situations do. But that is no reason to put the lenders out of business or to eliminate the service, which as the surveys show is used responsibly and to good effect by the majority of borrowers. And contrary to what William said, payday lenders don’t lend money indiscriminately. They have underwriting criteria and generally will not lend more than around 25% of a person’s take home pay. If they lent money indiscriminately they would be out of business fast.
I’m not saying there isn’t room for improvement in the regulation of the service. What I think is that the state should require payday lenders to give each of their customers a state-printed fact sheet and test before they can apply for a loan. The customer would be informed about the relative prices of different kinds of loans and the pitfalls of overborrowing, and would have to demonstrate that he understood such, the terms of the loan, and the actions which the lender could legally take if he doesn’t pay it back. Beyond that, it’s the lender’s right to make an honest offering and the customer’s right to make his own choice as to whether he thinks the service would benefit him. Period.
I myself am not a payday lender but do have strong financial ties to the industry. That does not invalidate what I have to say, which should be considered on its own merits.
By: Jon Schultz on May 27, 2008
at 6:20 pm
This is a Great Bill For Employment In Ohio
- loan sharks will be dancing in the streets; when they aren’t breaking bones… plus this should be good for business in the medical profession for setting those broken bones. Of course the poor customer will have to take out a new loan for medical expenses – trapped in a “cycle of broken bones” I suppose.
- employment in surrounding states will go up as people drive to KY, IN, etc. to get payday loans.
- Loan customers will buy more gas on the way to the other states – helping the struggling gasoline vendors.
- internet loans will increase, as will identity theft. This will create opportunities for identity theft detection, prevention, etc., not to mention web housing and software.
- Lawyers will be under pressure to devise end-runs around the new law – gotta to keep them fully employed.
- Pawn shop businesses will get a nice shot it the arm.
- People will steal to get items to pawn. So employment will increase in the law enforcement, corrections & security alarms sectors. An added bonus: the economy in general will get a jump start as people spend to replace their stolen items.
This bill is great. I can’t think of a single downside!
By: Glenn on May 29, 2008
at 2:48 pm
You can speculate all you want about “what ifs”, but unless you have a time machine, then you really don’t have a clue to what “might” happen.
The only statement in your comment that made any sense was:
“This bill is great. I can’t think of a single downside.”
You are correct. This bill is great and once Gov. Strickland signs it next week, it will be a law. Once people, such as yourself, understand Ohio doesn’t want payday loans under the old rules, the better off you will be in the future.
By the way, did you find the “batphone” yet? If so, has the Governor returned any of your calls?
By: Mr. Miyagi on May 31, 2008
at 9:01 am
I have one word for the payday lending industry:
OWNED!
By: Mr. Miyagi on June 2, 2008
at 6:31 pm
Mr. Miyagi there is some truth to what Glenn was saying. One of our other options is to open pawn shops where all of our old stores were. Would you prefer the streets be riddled with pawn shops???
By: Joy on June 3, 2008
at 9:58 am
I have already seen many pawn shops in my region, so I wouldn’t be surprised if some others hop on the bandwagon. Companies like Cash America, might decide to go this route, since they have the service already across the US.
Here’s a “what if”, since you want to play this game. What if because of this law, Ohio consumers are better off? Here’s another: What if because of this law the numbers of home foreclosures and bankruptcies goes down. Let’s do another one: What if the the amount of foreclosures and bankruptcies in Ohio are in a direct correlation because of the amount of payday loans?
What if cows shit butter? You wouldn’t have to churn it…
By: Mr. Miyagi on June 3, 2008
at 11:04 am
A great day from Ohio:
http://www.ohiochannel.org/multimedia/people/media.cfm?file_id=113447&person_id=88901
By: Mr. Miyagi on June 4, 2008
at 8:55 am
Meanwhile, in PA:
http://philadelphia.bizjournals.com/philadelphia/stories/2008/05/26/daily35.html
By: Mr. Miyagi on June 4, 2008
at 8:58 am
I love when the sad sacks, who just got stomped, try to call me out. I must have really hit a sore spot with some of you to quote me in your ramblings. So, here’s my two-cents, once more:
I believe the CRL in Ohio did its own investigation on the state’s payday loan situation as outlined in at least one report from 2007. Also, the Policy Matters Ohio and Housing Research & Advocacy Center published a similar report last year to support the “debt trap” argument. I have yet to see a report from the payday loan advocates that applied to the situation Ohio. If Veritec wanted to refute any research done by the CRL in Ohio, then where were they during the House and Senate hearings? The PDL loan industry stalled for almost a year in trying to come up with a better plan and the result was a failure of epic proportion.
Let’s try and be realistic. Organizations, such as Veritec, CRL, CFSA, etc. all have an agenda. The statistics come out and the other side dismisses the data. I wouldn’t imagine a lobbying group to publish a report that didn’t support their claim. So, who’s right? I really didn’t see any group publish specific methodologies and how the conclusion was in a quantitative, rather than qualitative method. In matter of fact, the bulk of the data was just descriptive in nature, but it’s the research that is out at the moment.
In my opinion, I don’t think it was the statistics that drove Ohio legislators to pass the law. The whistle-blowers and former short-term lending employees supported the information supplied by the CRL and other groups. There are many people out there that have just been victims of many deplorable acts perpetrated by the payday loan industry. Others have been the ones to engage in less than ethical behavior. We know it’s happened by reading the mounds of testimony. Once again, let’s reexamine this quote:
“And the theory in the business is you’ve got to get that customer in, work to turn him into a repetitive customer, long-term customer, because that’s really where the profitability is.”
Dan Feehan, CEO of Cash America, remarks made at the Jefferies Financial Services Conference (6.20.07)
This is the same company that is pulling 139 Cashland stores out of Ohio and is headquartered in Dayton. Let’s think about this for a second: This specific payday lender wants the consumer to continue being dependent on this service. For Cashland to be profitable, the client must be in a desperate and bleak financial situation. Personally, that makes me sick to think a company that prides themselves on being the last alternative for the credit-challenged would suggest turning them into a “repeatative, long-term customer”. The sad truth is that one payday loan might not get the customer on their feet again, but upwards of 10-14 loans. Another sad truth is that one lender might not be enough and multiple loans is the only way to keep from drowning. This is the model that payday loan companies want flourishing in their community, as it fills the corporate coffers.
We can continue to argue about the cash advance industry and their impact on Ohio. Whether it be positive or negative, at the end of the day the government corrected the 1995 law, which is what needed to be done. I am glad to see the strong bipartisanship on the bill and that many of the legislators finally achieved victory in trying to get this bill passed. The battle has been raging for years surrounding payday loans and Ohio has been a battleground. Finally, I am glad to see Barack Obama supports payday lending reform on a national level with a 36% cap, such as is in place for the military. Let Ohio be the model that others follow!
By: William R. Barnett on June 4, 2008
at 10:33 am
I was looking up some of information on how the Ohio CRL arrives at some conclusions with its data. The following paragraphs are taken from the Cleveland Plain Dealer last October:
“Because Ohio data on payday lenders aren’t available, the coalition had to be creative to come up with estimates. It began with nationwide loan information submitted by four of the state’s biggest payday lenders to the Securities and Exchange Commission.
The coalition then divided the totals by the number of storefronts for the businesses to come up with an average number of loans per store. Then the group turned to states that regulate payday loan firms and collect specific information about each store. The coalition used that data to determine which kinds of stores — urban, suburban and rural — make the most loans. The group used the experience of the stores in other states to make educated guesses about the stores in Ohio.
Finally, the group turned to a major investment bank that tracks payday loan companies to make sure the Ohio numbers were appropriate.”
When I was introduced to all the data posted on the OCRL website, my first question was: How was this data collected? I am usually skeptical when information is publish on a website and it’s taken as the Gospel. Still, I have read reports from other entities, such as the Univ. of North Carolina, that paint a similar picture. While I would have liked to see a clear methodology to accompany the publications from the OCRL, I can certainly understand the difficulties with trying to gather information when it’s scarce.
So, what does this all mean? Many researchers, not only in the payday loan debate, but in other areas, have to be creative at times. A common phrase used is “massaging the numbers”. Yet, it just not all about “making it up as you go”. In one of my above comments, I used the current data to calculate some numbers and subsequently used it to draw a conclusion. Another example is best illustrated by US death rates that are published annually. Statisticians use the term “age-adjusted” to calculate accurate statistics given a few different variables. By the way, my background is biostatistics and health research, so I have some experience with data collection and analysis.
Lastly, one important comment from the legislators at the bill signing was regarding the need for stricter underwriting criteria, something that the now repealed law was lacking. House Bill 545 corrected this mistake. Another crucial part of the new law is the mandatory max. cap on the loan of 25% of the client’s gross income. Some lenders were charging as much as 50% or more. In testimony from former employees of short-term lenders, the rate was nearing 100%. Bottom line: When you don’t have firm regulations, then the system is ripe for abuse and just one of the reasons this bill sailed through the legislative system.
By: William R. Barnett on June 4, 2008
at 1:54 pm
For my friends in the Toledo area, there are two better alternatives to PDLs:
http://www.bayareacu.com/htdocs/web/other_loans.htm
http://www.kemba.org/stretch-pay-loans.htm
There are two locations, one in Oregon and the other in Sylvania, respectively.
By: William R. Barnett on June 4, 2008
at 2:23 pm
According to the State of Ohio Commerce Department website, at least 1/2 of the payday lenders in Lucas County have canceled their license.
Don’t let the door hit you on the way out!
By: Stinky Chimp on June 4, 2008
at 2:39 pm
What does the USAF think about payday loans?
http://www.af.mil/news/story.asp?id=123082778
I was lol’ing at this website (obviously a fake organization):
http://www.predatorylendingassociation.com/myth-vs-reality.shtml
By: Stinky Chimp on June 4, 2008
at 2:43 pm
Does anyone ever think about personal responsibility?
Apparently you don’t and neither does the state of Ohio.
By: Julie on June 6, 2008
at 8:04 pm
Apparently, you miss the whole point of the argument against payday loans. While personal responsibility does play a role, so does the business model that has continued to thrive in the industry.
How do you expect someone who is in need of money and is already not making ends meet to use this service on a continual basis? The payday loan industry seems to make a point that many people have nowhere else to turn when an unadded expense comes along. So, it seems these individuals need to take out a payday loan to get by. The problem is once you’re in this system, it’s difficult to get out. One payday loan means you are going to be short again next payday. Maybe this person needs to take out another. In the worse case, the borrower needs to take other loan with another company. This is the situation that many payday loan companies want to see coming into their store. It’s hard to argue with that fact considering many current and former employees agree this behavior is profitable to the lender.
The industry has argued they provide a service to credit-challenged individuals. That’s great, but don’t pat yourself on the back just yet. So, it seems that when you have little choice is where to get money in between paydays, where are you going to turn? That’s right…your cash advance location. Seriously, how does personal responsibility stop people from taking out another loan after the first one leaves them short? How is that a deterrent to keep one from taking out multiple loans to pay another loan off? One could argue that it’s a purely a choice, but when a person is caught in a vicious cycle, then there is little recourse. I would like you to tell that to someone that needs to pay the rent when facing eviction or needs medication when they don’t have the income anyways.
So, which is it? Is the payday loan industry the savior of the less fortunate or a vehicle for people to get deeper in the debt cycle? Well, let’s think about that for a minute. A person walks in, shows proof of income and a checking account, signs some papers, and walks out the door with cash. Seems easy enough and that is what’s attractive to the consumer. The lender doesn’t really care why the client needs the money, just that they do. The lender doesn’t care if they don’t come in to pay it off, they have the customer’s post-dated check. The lender doesn’t care if that check bounces, because they can assess more fees, run it through the bank a few more times to accrue further NSF charges, and push the customer deeper into debt. The lender doesn’t care because they can come to collect using any means necessary because they don’t have to follow any regulations. Why? Because a payday lender wants you to be so far down in the hole, that there is no alternatives but to borrow someplace else or payoff the loan and take another out. The real easy money is the payday lender sitting in their chairs waiting for the client to come in. After all, if they lose one, there are 10 or more that shuffle in behind.
This is a flawed system that is ripe for abuse by both the consumer and lender. For 12 years, payday lender sprung up quicker than fast food chains in communities and victimized Ohio’s poorest poor. Perhaps the customer is to blame. After all they were stupid enough to get reeled in and take out as many as 10-14 loans a year. Oh wait, that’s the industry’s argument that a lack of personal responsibility is the culprit and they just provide the service. Get real. When consumer advocates, former employees, customers, and the government started putting two and two together, it was enough to convinced the General Assembly and Governor that the Cash Cashing Lender Law from 1995 was just wrong. If the payday lenders and their advocates want to continue this charade, they will only convince Ohioans that the legislation is more than welcomed in the State.
By: The Incredible Hulk on June 9, 2008
at 9:43 am
HB 545 may not be such a bad thing. Have any of you that are writing ever been trapped in this horrible cycle. Im guessing no. I am a very well educated full time employed person who got caught in this cycle and am currently still in it. I don’t do drugs, I take care of my family so the theory of low lifes or drug addicts are using this service is not true. I got trapped in this cycle before I even knew how bad I was in. Taking out one after another, my life was falling apart. I was so stressed having to run from one place to another until one day I decided no more. I stopped payment on check and will make payments, I get threatened by places and some won’t accept payments but they either will or they won’t get paid. I am trying to take back the control in my life that these places took from me.
By: billy on July 8, 2008
at 2:18 pm
I am unsure if this has been clarified or not so I will make an attempt to do so what the sign was in fact referring to was that if 231,000 signatures are collected by August 31st opposing HB545 then it will become the peoples choice in November.
Now lets get to the real reason this bill was ever conceived its due to the banks losing 2 million last year from what you ask the NSF fees that were avoided by getting a payday loan. On average a bank charges $35 NSF fee and then a daily overdraft fee around $6 so if you forget to write something down in your checkbook and you are 13 days from payday $113 is what it is going to cost you from the bank alone so lets work out the APR on that. Something else you may not be aware of Banks are planning on raising NSF fees after payday lenders are out of the picture as high as $75 I think that is predatory.
Personal responsibility why is it that we have people suing McDonalds for making them fat I don’t recall them telling you to order extra big mac sauce and a Mcflurry with your meal… anything can be misused and overused yet only payday lenders are to blame for houses being foreclosed on however I have this crazy theory that the unemployment rate, low wages, lack of health care coverage and fuel prices which are causing the costs of all goods to increase are the problem silly me I am sure putting 6,000 people out of a job and taking some peoples lifeline away from them is really going to make ohio a better place after all we can just wait on those casinos and get jobs there is that your solution ?
By: Heather on July 10, 2008
at 3:33 pm
William Barnett, I have read your post and admire your interest in looking out for the little guy on the payday loans issue. If you are also the William R. Barnett who posted on another site about Healthways; please contact me at tim22304@yahoo.com. I have some information you will find very interesting and possibly helpful.
By: Tim Winston on July 14, 2008
at 1:17 pm
I have been keeping up with the info and was involved with payday loans as a customer. Im no longer involved with them. And yes, you can live your life without payday loans.
The thing that I hear is about the “100 dollar loan with 15 dollars to pay back” Many people need more money and are taking out 300-800 dollars. and the interest is from 30 – 120 dollars.
I see more people from different walks of life taking out loans. but that doesnt make it better. many people get caught up with the cycle of depenency of the loans and not being responsible for them.
Also the agencies who are trying to collect loans that are past due are violating many practices of Federal Law with threats and cursing. I have had calls about a person CheckSmart was looking for…and I never heard of the person. But they insisted with threats they were right. Could it be that they were taken in? yep
So I say get rid of them. One time I didnt have the money for rent so i sold my stuff to do it…and bought new stuff later. It may have been hard but at least i didnt have to pay it back.
By: James on August 14, 2008
at 3:45 pm
Isnt it about choices? Taking away someone’s choice to apply for this loan if they need it? I think car & house loans are worse, they take away your car and shelter!! No one asks them to shut down financing. Credit card companies are horrendous, but I don’t want the option taken away cause some guy has issues with them.
Not everyone has stuff to sell! If I need money for rent or medication, and I choose to make the decision to take out a payday loan, thats my choice! I am adult and I will deal with the consquences or benefits of any choice in my life.
A lot of people will be out of work, single moms etc. Yes there are other jobs, but minimum wage isnt always enough to feed a family of four!
I say if you dont like pay day loan companies, dont use them! But dont take them away from those tons of people that use the option wisely.
By: ohiogirl on August 18, 2008
at 10:58 am
What people dont realize is that Bill 545 is backed by all the major banks. If I want a hundred dollar loan from a cash advance place its 15 dollars, that should be my choice. The problem is people started to realize, “Hey I can go get a few buck till pay day, not bounce my checking account, and not incur 20 dollar a day overdraft fees from my bank for doing so!” With mega-banks like 5/3 showing estimated profits of $292 million this year its not really hard to see that ‘big-bank’ wants to keep a hold of all the cash they can. There will always be people that cant manage money, but taking the rights of everyone else away because of them is not American in the least.
By: worried4ourfuture on September 2, 2008
at 12:02 pm
I’d like to know which banks support House Bill 545. That’s a ridiculous assertion when you consider that the payday lenders are “bankrolled” by the darn banks. How do you think they get the capital to start bilking Ohio’s consumers?
The payday lenders were able to get their signatures, but not without lying to many Ohio voters about the intent of their payday lobby sponsored referendum (where are the citizens on this one?). Enumerable voters were told that they were signing a petition to “lower interest rates,” an outright lie!
We need to end predatory payday lending in Ohio and end the cycle of debt for hundreds of thousands of Ohioans. Payday loans are a defective product that is designed to trap people in debt and keep them coming back again and again. Those intent on charging Ohio consumers 391% interest should be ashamed. It’s usury and it’s immoral.
My voice will be heard. I will vote yes on issue 5!
By: Darren on September 4, 2008
at 1:37 pm
For those of you who have the luxury of a stable, well-paying job, with a paycheck that conveniently covers your expenses…feel blessed. Your need for the payday loan lenders is nil, and you will never (maybe, anyway) understand the need for these “predators”.
For those of us who have jobs that are barely keeping up with the bills…we need a little help from time-to-time. When we do need help, these “predators” are there for us.
The banking industry is FAR more predatory than any payday loan business – and the BANKS ARE LEGAL!!!!!!!!!!
Here’s an example of a real-life situation…
The car breaks down on the road.
The car is towed to the mechanic
($50 charge for the two mile tow – sounds expensive, but this towing company is not called “predatory”, he is just making a living. Hmmmm)
The mechanic says the car needs a new serpentine belt – estimated cost for repair – $187 – before tax.
(This same serpentine belt at any auto parts store can be purchased for $15, but this mechanic can charge $132 extra for “labor” – but, again, the mechanic is just making a living. Hmmm)
I have 9 days until payday.
My checking account has $100 left in it after I’ve paid all my bills. This $100 must cover food, gas, and any other expenses until payday – 9 days from now. This money is not enough to pay for this car repair.
My credit card has $100 free on it. This will help with the repair, but won’t cover it all.
My credit card definitely will not clear this charge of $187 (+ tax). So, I bounce a check, knowing it will not clear (which is illegal, but I need a car), and let the bank rape me in overdraft fees.
The next day the check attempts to clear the bank…oops…not enough money – $37.50 overdraft fee. (8 more days to payday)
Two days later the check attempt to clear again…still not enough money…$37.50 OD fee again. (6 more days to payday)
Two days later, the bank returns the check after it doesn’t clear a 3rd time…$37.50 OD fee. (4 days to payday).
The next day, the mechanic files the same check electronicly. Still not enough money…$37.50 OD fee. (3 days until payday)
The next day the same check tries to clear again…another $37.50 OD fee (2 days until payday).
The next day, again, the same check tries to clear…another $37.50 OD fee + $7.00 charge for being overdrawn for 7 days or more (1 day until payday)
Finally, the next day (payday), the check, originally written for $187 (+tax), clears the bank.
Did the bank attempt to contact me to alert me or find out why there was no money to clear this check? Nope. Why would they? In total, they just made $232 OFF ME FOR BOUNCING THIS ONE CHECK!!!!!!!!!!!!!!! But, it’s LEGAL!!!!!
I just paid $187 (+tax) + $232 = $419 for my car!!!!!!!
Now…if I would have went to the “predatory” payday loan office and borrowed $200, I could have paid for my car repair, paid back $230 on payday, and all would be well! WHAT IS SO PREDATORY ABOUT THAT!!!!!!!!!!!
Ending the existance of the payday loan industry will NOT end the cycle of debt in this country!!!!!
Ending there existance will NOT end predatory practices in this country!!!!!!!
Ending there existance will just put more people on the “FEDERAL PAYROLL”…or welfare, as some people call it…because we will not be able to make to payday. We will help from our government to fund us…which means more tax money from those of you with the higher paying jobs.
Still want to end payday loans???
It’s to my advantage to vote YES.
And unless you would like higher taxes, it’s in YOUR best advantage to vote YES, also!!!!!!
Oh, by the way, to the officials that tacked this onto HB 545…nice move attaching payday loans onto a bill that no moral individual would want to see fail.
By: Just trying to survive on September 4, 2008
at 9:23 pm
I’m voting NO on issue 5 (not yes – typo), you should too!
By: Just trying to survive on September 5, 2008
at 12:33 am
I spent some time reading these posts and wanted to leave my own 2 cents…
I do have a good paying, professional job in the financial industry, but I DO use payday loans from time to time. I don’t by any means use them every payday, but once or twice a year I may need to. Money gets tight, regardless of how well paid you may be.
However, I will be voting YES on HB 545 for a few reasons:
1. I don’t need the services every month. I may only need to visit a few times a year.
2. Payday loans are great for unexpected events like a car needing fixed, water heater broke, etc. But if you have more than 4 of these events a year, the Payday loan isn’t something you should turn to.
3. I will actually be willing to use the services MORE OFTEN and take more money if the interest rates are lowered.
Most of the posts have mentioned that this bill will put these places out of business, leave people unemployed, and people without options. This isn’t entirely true. While you are limited to the amount of times you can get a payday loan, they are not going to be banned. It will still be an option. While some locations may close or downsize, most locations will remain open. Customers will still come, and if the HB doesn’t keep you from 4 per year total (meaning, you can go up to 4 times at each location), this bill should only keep more money in the customer’s pockets due to the reduced fees.
Please don’t confuse the issues here… while I don’t agree that these companies are “preditors”, its not entirely a good practice to make a habit of. I’ve done the math… that’s why I choose to use payday loans. When I am faced with potential overdraft fees, I know its cheaper to borrow $200 than to face the fees. But I use it when I need it.
As a previous post has stated, payday loans should be a last resort, after all avenues have been taken. Getting $50 or $100 once a month has become a habit. Yes, $7.50 is the cost of an inexpensive meal, but over a year’s time, that’s $90 in fees. I’m sure you’ll miss $90.
HB 545 will not bring on gloom and doom. And the few jobs that will be lost will be nothing compared to what’s being lost NOW in the financial industry as a whole.
By: Don'tBeConfused on September 7, 2008
at 10:23 pm
Looks like they screwed the pooch on this one:
http://www.limaohio.com/news/board_28381___article.html/elections_petitions.html
By: Payday Fraud on September 19, 2008
at 9:42 pm
How can anyone vote ‘no’ on 5 when we can plainly see the economic result of predatory lending today (see: mortgages and the current looming risk of another depression)?
IF anyone were at risk of losing their jobs, these same people could easily work as bank tellers and get paid the same amount. I can think of 4 major banks in Ohio right now looking for tellers.
These same banks aren’t at the same risk of going under, either – because they actually have reasonable interest rates and don’t go loaning money out to every crack head that can’t pay their bills. Being a teller may not pay much, but I believe it pays better than being the Debbie behind the 3″ bulletproof glass in a shady neighborhood.
If you know how to run your lending company and actually try a little harder to make sure you’re lending to the right people, you don’t NEED to charge 391% APR. Just like the big businesses on Wall Street, if you know how to run your business, you won’t be forced to go under when someone presents you a set of reasonable and ethical guidelines to follow.
Read the news once in a while, people. Make some effort to understand the economy a little.
By: Common Sense on September 30, 2008
at 3:31 pm
dear common sense…..do you have any?
You seem to be among the uninformed in this debate and it saddens me. Have you even used these services, or are you just repeating what you saw on tv or read in the paper?
Last month I had no other option than to take out a loan with a cash advance company. Things have been tight in my household since my husband passed away and if spending 15 dollars keeps our home from being foreclosed on, then I’ll do it a million times over. I like to think I’m a smart person. I have a job with one of the major bank chains im sure you were referring to. I HAD money in the bank and thought only stupid people who couldnt manage their money borrowed it from a payday lender. What a wake up call I had when I was left to manage all the expenses myself. Ive heard all the horror stories about these places, but had no where else to turn. So, I did the unthinkable….borrowed just enough to keep my children in their home one more month. Have you ever had that feeling? Like you were one paycheck away from losing everything?
When I borrowed for my mortgage, I made sure i was informed. How in the world could a company charge 390%? I was surprised to find out they dont. Do you realize that to come up with that number, you would have to take out a yearly loan, considering APR stands for annual. 15 dollars per hundred is cheap if you ask me and that fee never changes.
Do you really feel that because you dont need this service, no one else does? Why should this option be take away from everyone? I needed this, I used it, and it saved me!!
Do you also realize that if you take a payday loan and charge a 28% APR, it would be like charging a little over one dollar per hundred? How could ANY business say afloat like that??
And for those 6,000 people out a job….the only places that have 6,000 openings are the welfare and unemployment offices.
Not everyone is as fortunate as you seem to be.
By: hmmm on October 6, 2008
at 8:20 pm
Can any one tell me where the only 4 loans/yr came from? I’ve read the state legislation and this point is confusing to me, the ballot states nothing of a limit on loans. Also, I don’t know how true this is but, I read info about a mandated class the consumer would have to take (and pay for out of pocket) should they need multiple loans in a 90 day period, is this accuate and were did it originate seeing as I have found no mention in the legislation I have review.
Could someone please post a link if they know of the info, I would like to be as informed of a voter as possible.
Thanks.
By: Lee on October 12, 2008
at 1:00 am
First and Foremost I don’t know many crackheads who have a job and one of the requirements to getting a payday loan is having a payday which means employment. Ohio HB545 states that consumers would be limited to 4 loans per year if you take out 2 loans within a 90 day period you have to attend a class to teach you how to finance your money the statewide database will track this to ensure that the government knows what you are doing with your money. The other thing I would like to comment on is the fact that not all payday lenders are behind glass I have worked for 2 neither of which had it also neither were located in “shady” neighborhoods one was in Sharonville and currently in Mason. I myself have in the past worked in the banking industry and it does not pay as well as being an office manager for a payday loan company. Lastly I would like to pose this question how can a business survive by loaning someone $500 for a month which is what the new law would require and profit (I use that term loosely) $5.40 ?
By: Heather on October 23, 2008
at 1:49 pm
The sad thing is the advertising of the pro-payday lending campaign is full of total BS. It seems these people want to make it about jobs, privacy, and keeping the gov’t out of the public’s business.
I think the payday lenders have tried to dupe the public and prey on those that are not up to speed on the issue with boldface lies and misinformation. You should be ashamed of yourselves for being underhanded. Still, what else would we expect from people of less than moral fiber? After all, they tried to stack the deck with signatures from people that were dead…
Keep HB 545 on the books and send a message to the scumbags in the PDL loan shark business. Thanks for screwing your customers and contributing to the economic downturn of OH. May you all rot in Hell!
By: Payday Crooks on October 30, 2008
at 8:54 am
Well, it happened. Issue 5 passed, meaning HB 545 becomes the law here in Ohio. So what does that mean, really?
Well, Cash America announced today that they will be CLOSING 43 of the Cashland Stores in Ohio over the next few months. I’m fairly sure in the next few days or weeks we will see other companies closing store fronts across the state. So the state can say goodbye to those good paying jobs and the payroll tax dollars that flow into the State’s cofers, while at the same time watching plenty of money flow out as these former payday loan employees start collecting unemployement (unless the state steps in and declares them somehow ineligible).
And let’s not forget the cities that were collecting tax dollars from these same employees as well as taxes for the businesses themselves. Kiss that money goodbye when the storefronts close up. But hey, I’m sure there are plenty of great paying jobs out there just asking to be filled. It’s not like we’re in a recession or anything?
So as I go to update my resume while I hold out hopes that my company will find a way to stay open, let me leave you with this thought. The only winners in this are the banks who’ll still be out there charging outrageous overdraft fees and the mommy staters who feel that we’re all children who need to be told how the live our lives.
By: Tom on November 5, 2008
at 2:17 pm
For those of you opposed to this, why has no one gone after the banks that charge you $35 per each overdraft fee even if the item is only $2.00 making the $2 item a $37 item! I think these fees from major banks are a pure gouging of the public. The $15 fee on a loan is by far better than $300 in fees because 5 items cleared your bank. Bank Of America does not even stop the bleeding fees, allowing every withdrawal to keep coming out of your account until it spirals out of control….HOW IS THIS ANY BETTER??
By: Brian on November 5, 2008
at 4:11 pm
and dont forget the rent owners and advertising agents that stand to lose millions…..meh, but whose counting?! they can cash in on the casino….oh wait…
By: Tina on November 5, 2008
at 10:31 pm
Cry me a river…
By: Payday Crooks on November 6, 2008
at 11:31 am
I just got a cash loan from cashland, they have a workaround. They don’t call them pay day loans anymore. They charged me $328 to borrow $300 (222% the documents say). You don’t give them a check, you just have to pay it before 2 weeks is up.
By: Peter on November 22, 2008
at 6:50 pm