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Voters to consider payday loan industry with Issue 5
Bob Carroll
Issue date: 10/31/08 Section: Front Page
On Nov. 4, Ohio voters will have the choice to approve Section 3 of Ohio House Bill 545, a referendum that will determine the fate of the state payday loan industry. According to the bill, the annual percentage rate (APR) that would be charged would be capped at 28 percent.
"Our economy is tumbling around us and it started with reckless lending and credit," said Suzanne Acker, Communication Director for the Coalition on Homelessness and Housing in Ohio (COHHIO). "That it exactly what payday lending is. It has hurt us as a state, as a nation, and a 'yes' vote stops this kind of predatory lending."
But opposition to issue 5 asks voters to look deeper into the matter.
"Issue 5 is overkill and doesn't need to be passed," said State Rep. Tom Brinkman (R-Hamilton County).
Rep. Brinkman pressed that opponents of Issue 5 were worried about much more than the state's payday loan businesses.
"The problem is that the government would keep a state database of any lender's financial and credit information, and state employees have access to that information. What we're concerned about is the invasion of personal records," said Brinkman.
However, Acker said current legislation is only in place to help Ohio's small loan industry.
"What issue 5 does is keep a portion of law that payday lenders want to repeal." Acker said.
Under the new legislation, a $300 loan would have a two-week charge of around $18. Presently the payday loan industry APR stands at 391 percent. Therefore, a payday loan of $300 carries a charge of $45.
According to Brinkman, also the founder of the Coalition Opposed to Additional Spending and Taxes (COAST), the bill originally only restricted the payday APR, but since then the legislation has "gone too far."
The bill now allows the state to know the financial background of any individual who takes out a payday loan. COAST has publicly endorsed a "no" vote on issue 5.
However, advocates of the bill argue that Issue 5 would help Ohioans leave a cycle of endless debt to payday loaners.
"Our economy is tumbling around us and it started with reckless lending and credit," said Suzanne Acker, Communication Director for the Coalition on Homelessness and Housing in Ohio (COHHIO). "That it exactly what payday lending is. It has hurt us as a state, as a nation, and a 'yes' vote stops this kind of predatory lending."
But opposition to issue 5 asks voters to look deeper into the matter.
"Issue 5 is overkill and doesn't need to be passed," said State Rep. Tom Brinkman (R-Hamilton County).
Rep. Brinkman pressed that opponents of Issue 5 were worried about much more than the state's payday loan businesses.
"The problem is that the government would keep a state database of any lender's financial and credit information, and state employees have access to that information. What we're concerned about is the invasion of personal records," said Brinkman.
However, Acker said current legislation is only in place to help Ohio's small loan industry.
"What issue 5 does is keep a portion of law that payday lenders want to repeal." Acker said.
Under the new legislation, a $300 loan would have a two-week charge of around $18. Presently the payday loan industry APR stands at 391 percent. Therefore, a payday loan of $300 carries a charge of $45.
According to Brinkman, also the founder of the Coalition Opposed to Additional Spending and Taxes (COAST), the bill originally only restricted the payday APR, but since then the legislation has "gone too far."
The bill now allows the state to know the financial background of any individual who takes out a payday loan. COAST has publicly endorsed a "no" vote on issue 5.
However, advocates of the bill argue that Issue 5 would help Ohioans leave a cycle of endless debt to payday loaners.
Viewing Comments 1 - 9 of 10
Casey
posted 10/31/08 @ 9:32 AM EST
Forget if you agree with pday loans or not- FOCUS on the fact that the Ohio General Assembly thinks they have the right to control what financial products are available to the citizens of Ohio. (Continued…)
Craig Johnson
posted 10/31/08 @ 11:25 AM EST
Mr. Carroll incorrectly states that "a $300 loan would have a two-week charge of around $18." An annual interest charge of 28% is only $84. Thus a two-week loan (during any of the 26 pay periods in a year) would be only $3. (Continued…)
7000
Martin
posted 10/31/08 @ 11:36 AM EST
Casey, I guess you were a big proponent of deregulation on bank lending? Look how that turned out. All of your tax dollars went to bail out a bunch of reckless companies that speculated and got greedy in the Real Estate market. (Continued…)
Payday Loan
posted 10/31/08 @ 12:25 PM EST
I understand that there are some payday lenders that take advantage of people. I also understand that some people take too much advantage of the payday lender. (Continued…)
Tara-VOTE NO ON ISSUE 5
posted 10/31/08 @ 3:39 PM EST
Martin,
There are laws on APR about credit cards but not on the APR charged on fees, for instance
What is the APR if I was charged a late fee of $34 bucks on a $15 dollar payment for a balance of $50 bucks? HMMM-its OUTRAGEOUS. (Continued…)
Bobby
posted 11/01/08 @ 11:37 PM EST
COAST is an "organization" with only 6 members. An "astro-turf" group set up to advocate on behalf of corporate entities like the predatory payday lending industry. (Continued…)
Stu
posted 11/02/08 @ 12:26 PM EST
You Have to have an enormous interest rate when your dealing with deadbeats...and i would be...the majority of these folks are or they wouldn't pay the enormous rates if they had any alternative,that they didn'r already burn and stiff. (Continued…)
cash advance
posted 11/04/08 @ 10:40 PM EST
I don't know what the big deal is about getting a payday loan. I got one last year, paid it off in two weeks and the fees were less than if I had missed my credit card payment. (Continued…)
Patrick
posted 11/06/08 @ 1:07 PM EST
Great Article Bob!
Sincerely,
Your cousin
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