Ohioans - write your government re pdls!

August 1st, 2007

Governor Ted Strickland
Riffe Center, 30th Floor
77 South High Street
Columbus, OH 43215-6108

Dear Governor Strickland:

I am compelled to write you in response to the July 23rd Columbus Dispatch article ???????Payday lenders: Service or trap???????? which discusses the rapid increase in storefront payday lenders in Ohio and the division among Ohio lawmakers regarding state regulation of these institutions

First of all, I applaud Senator Ray Miller, Representatives Bill Batchelder and Matt Lundy, and Bill Faith for being outspoken advocates for Ohio consumers caught in the vicious cycle of payday loans and for pushing for tougher laws to protect the citizens of Ohio - not the payday lenders. The idiotic comments of Representatives Joyce Beatty and Christopher Widener and Mr. Darryl Dever are a clear indication as to how woefully ignorant they are about the true concerns of those who find themselves in a financial bind and have no other resources and no other alternative but to turn to these predatory lenders who, without stricter regulations, are no better than common loan sharks.

Representative Beatty????????s feeble assessment of the situation appears to be based upon the fact that she talked to a few folks waiting in line for a loan who told her that these were the only places that would cash their checks. Then she goes on to make the ridiculous statement that nobody is calling her to ask that the lending establishments be closed down. I am not disputing that these institutions can provide a valuable service to those who otherwise have no other place to turn and I have no doubt that very few people have asked that they be closed ???????? they have no other resources. It would also make sense that consumers who use payday lending establishments ARE reluctant to speak out against them for fear that their only option will be taken away from them. Representative Beatty is evading the real issue at hand - how these establishments treat their customers if God forbid they find they are unable to pay back these loans in full and despite several proactive attempts to make payment arrangements, they receive harassing phone calls numerous times a day, are threatened with legal action and wage garnishment, and phone calls are made to application references and family members disclosing detailed, personal information regarding the loan.

I resent Representative Widener????????s arrogance in saying that he doesn????????t see the need to cap rates or make other regulatory changes. I have no doubt that Representative Widener doesn????????t see the need. Could that be because he????????s never had to resort to turning to these places for help and has never been subjected to their shabby treatment? I don????????t believe that Representative Widener will ever find himself or a loved one in the clutches of this vicious cycle, therefore, it doesn????????t surprise me that he ???????doesn????????t see the need.??????? What an arrogant thing to say.

Darryl Dever disagrees that the majority of borrowers are using one loan to pay off another. I am really interested in seeing the statistical data and in-depth research and interviews from which he drew this asinine, misinformed conclusion.

To reiterate Representative Lundy????????s statement, something needs to be done to regulate this particular industry so that they are more consumer friendly. Unfortunately, the Fair Debt Collection Practices Act does not cover the business practices of payday lenders who currently operate with virtual impunity when dealing with consumers. I am not asking that these establishments be shut down. I am however, asking the following:

??????? Lower percentage rates.
??????? Regulate collection methods and practices so that they cannot harass or abuse customers.
??????? Enforce a cooperative willingness to establish a re-payment schedule to consumers that proactively request it. If consumers do not honor their re-payment obligations, then by all means, the lenders should pursue collection actions ???????? within reason and without fear of harassment and humiliation to the consumer.

In closing, Governor Strickland, I write this letter as one who is very experienced in the payday loan vicious cycle. Contrary to Mr. Dever????????s claim, I have had to take out payday loans to pay previous payday loans. I was even ENCOURAGED by these establishments to do so thus ensuring that I stay in their trap. I had three to four loans out at one time and after it was too late, I realized I was in over my head. In my attempt to remedy the situation, I made initial contact with these establishments ???????? CheckSmart, Express Payroll Advance, Cashland and National Check Cashers and notified them that I wouldn????????t be able to pay the loans in full and I requested a re-payment schedule. I made it very clear to them that I fully intend to honor my debt and pay it in full over time, but they told me ???????we don????????t do payment plans.??????? National Check Cashers was the only exception, however, they wanted high payments within a short amount of time, which I tried to honor but couldn????????t afford. My only recourse was to stop payment on the checks and close my checking account. I followed up with a letter to each organization (see enclosed) explaining my situation hoping they would work with me. They are still calling me numerous times a day including calling me at work. One of the collectors even called my aunt and left her a detailed message that I owed them money. I find this highly unethical. Another collector for CheckSmart known only as Mr. Moore was very rude and disrespectful. After leaving me two messages, I called him back and he insulted me, kept interrupting me and twisted my words. I told him I have every intention of paying the debt in full, but my only recourse was to make payments over time. According to Mr. Moore, I was telling him that I have no intention of paying my loan. Our conversation ended with him saying that he will be contacting my employer.

Please Governor Strickland, make these establishments accountable for their actions when they harass and verbally abuse their customers. I ask that you support legislation that will mandate consumer rights similar to the Fair Debt Collection Practices Act concerning payday lending establishments.

cc: Attorney General Marc Dann
Senator Steve Stivers
Senator Ray Miller
Representative Ted Celeste
Representative Bill Batchelder
Representative Matt Lundy
Representative Joyce Beatty
Representative Christopher Widener
Mr. Bill Faith
Mr. Darryl K. Dever
Ms. Audrey Hutchings, Ohio Dept. of Commerce


Enclosures