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I applaud my Ohio Lawmakers

Date: Thu, 05/01/2008 - 10:24

Submitted by tes52966
on Thu, 05/01/2008 - 10:24

Posts: 26 Credits: [Donate]

Total Replies: 5


First of all, I usually don't agree with alot of things that the Ohio lawmakers come up with, but they have taken a half-step on the way to eliminating or crippling the payday loan industry in Ohio. Payday loan shops have been popping up all over the place in Ohio, as many former fast food stores have now become storefronts especially in the larger cities. Interesting developments began to take place about 6 months ago when Bill Faith the director of the Ohio Coalition for the Homeless began to bring to light the inner workings of the payday loan industry and brought out into the light their business models that are based on trapping individuals into a cycle of repeat borrowing. Once the major papers in Cleveland, Cinci, and Akron began to to do stories on the interest rates these companies charged the public outcry became loud and demands to make changes far outweighed the efforts of the payday loan to pay off the politicans with campaign contributions. Although, this bill still must pass the Ohio Senate (it passed the house) changes are going to be happening with the payday loan industry:

A. Instead of getting $15 per $100 the payday loan companies will only be able to recoup $2.50 per $100 loan.

B. The maximum amount for lending will be cut from $800 down to $500.

C. The interest rate will change from .391% to .28%

D. Lenders would be banned from charging loan initiation fees

E. A statewide database will be started that will track the loan history thus limiting someone from going to Peter to pay Paul.

F. An individual will only be allowed to take out 4 loans per year, once they reach three loans they will be mandated to go to a free financial planning class before they are allowed to take out the loan.

The payday loan industry is up in arms here in Ohio, as they see the golden goose flying the coop. The industry is stating that if they are forced to close their doors that Ohio will lose 6,000 jobs and that people will no longer have the ability to borrow when in need. What I don't get is that these companies say they cannot make it on 28% interest charges, which I find hard to believe. I would love to find a bank where I could deposit funds into it and earn 28% interest.


They're correct. They can not survive at 28%. Much to all of your surprise, I think that law is a shame. It does not do justice. It's a classic case of throwing out the baby with the bath water. They have opened up Ohio residents to seek assistance through the internet. The right solution is not to attack a fee of $15 per 100, but to enforce collections practices and insure lenders are following the law regarding them. There is a market outside of this site for people that use payday loans for legitimate reasons. I know we all think it's propaganda, but there are people that take a pdl to get them by for a week or so and avoid returned item fees. A pdl is designed to be a bridge loan, not a financial solution. We don't ban cough medicine because it is being misused...we restrict it's use. This is a death sentence for an industry made by people that really don't understand it. Just my opinion. -James


lrhall41

Submitted by on Thu, 05/01/2008 - 18:04

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I just got off the phone with the AG office in Ohio because I had filed complaints and wanted a refund for the $ I overpaid and they said they are not illegal. They said that these companies do not operated in Ohio so there is nothing they can do. I stated the laws of Ohio which I had received from here and was told that they would have to look into that but did not think it would help. They can lend out of their state and they can regulate them. I asked about the money being put into my account and that was were it ened in OHIO and she did not think that it mattered.


lrhall41

Submitted by on Fri, 05/02/2008 - 05:25

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