Payday Loan Politics in Ohio

Recently in Ohio it was ruled that Payday Loan places (which are state regulated) could no longer continue their practices of charging 391% annual interest and would be limited to 28% annual interest.

Borrowing $100 for two weeks with a $15 charge is 391% annual

Borrowing $100 for two weeks with a $1 charge is 28% annual

The intention of the new law was to free people of the vicious cycle of borrowing from one lender to pay off last weeks lender. A few of these operations are large companies with the parent company of Rent-a-Center being one of the largest.

Personally, I think the new rule is a good rule and yes, will put alot of these leatches out of business.

Now, the industry is trying to get the issue placed on the state voter ballot. This will require over 240k signatures. This is where my outrage begins. Today I saw a TV commercial from a group calling themselves, "Ohioans for Financial Freedom." Talk about some misleading comercials! Their stance seems to be "big government taking away your right to choose" and "putting 6,000 workers out of jobs." The jobs being the counter workers at the stores.

I think the ads and the group name could not be any more misleading and will prey on the poor and ignorant (which is what these guys are good at.)

Your thoughts? The website: http://www.ohioans4financialfreedom.com/

Why in HELL would I lend somebody that needs a payday loan $100 for two weeks if I was only going to make a dollar on the deal?

That's an utterly ridiculous risk for hardly any return. I'd be much safer day trading, and make more money at it.

Yes, it will likely put such places out of business, which is probably a good thing. It is hard to imagine many circumstances where such a loan is a good thing in the long run. The people who use them are probably better off without them. Knowing they can't get them, may make them more conservative. Might also create a big comeback for the loansharks.

Those joints are nothing but legalized loansharks anyway. Biggest difference is instead of sending Big Tony to talk to you, they can send the law.

They prey on people near the bottom of the economic ladder and help them find their way even farther down, where we all end up paying for them.

If you're a bleeding-heart liberal, what they do the poor is an outrageous. If you're a hardcore no-welfare, get to work conservative, they're bad for business (and home values). Either way, I can't see how anyone could seriously defend them.

They are legalizied loan sharks, no doubt. Some of them operated like this: You bring your last pay statement. They note that you are paid on the 15th. They set your "loan" to be due on the 14th. You have to come in and arrange for a "new loan" on the 14th, with new loan fees, etc. to avoid defaulting. Then there were the "loan money on your car title" places that were just as bad.

These people prey on the poor and not-too-bright. They have been mostly kicked out of Arkansas.

Of course they are a ripoff, and of course they are a stupid move. OTOH, I don't think the government should be in the business of keeping people from making stupid financial decisions. I think new cars are a stupid financial decision, but I certainly don't want the government to keep me from buying one.

DILYSI Dave wrote: Of course they are a ripoff, and of course they are a stupid move. OTOH, I don't think the government should be in the business of keeping people from making stupid financial decisions. I think new cars are a stupid financial decision, but I certainly don't want the government to keep me from buying one.

EXACTLY, Let's vote away all our freedoms. Even the freedom to be stupid!

People are going to be stupid with or without the gov's help. My beef is with companies profiting off that and leaving me on the hook to pay for the mess they create.

DILYSI Dave wrote: Of course they are a ripoff, and of course they are a stupid move. OTOH, I don't think the government should be in the business of keeping people from making stupid financial decisions. I think new cars are a stupid financial decision, but I certainly don't want the government to keep me from buying one.

Generally I agree.. But these people are of the same ilk that lied about salaries on home loans and put the current hurt on our economy. I think they need some regulation.

I mean the people that use these things really are too dumb to help themselves.

I cant think of any downside if these businesses suddenly stopped existing. There are a number of ups however.

SoloSonett wrote:

DILYSI Dave wrote: Of course they are a ripoff, and of course they are a stupid move. OTOH, I don't think the government should be in the business of keeping people from making stupid financial decisions. I think new cars are a stupid financial decision, but I certainly don't want the government to keep me from buying one.

EXACTLY, Let's vote away all our freedoms. Even the freedom to be stupid!

this has nothing to do with freedom

I agree with Dave, they are truly horrible places but it's not like people don't know how they operate. If you're dumb enough to get fall for it, it's your problem.

GlennS wrote: I cant think of any downside if these businesses suddenly stopped existing. There are a number of ups however.

Downside - Responsible people who need quick money now, who recognize what it means to pay 400% interest on it, but are willing to do so, no longer have the freedom to make that decision.

I know there have been time in my life when I would have gladly paid $115 next week for $100 right now.

"Pawn your title, keep your car!"

"this has nothing to do with freedom "

? More laws have Nothing to do with freedom?

? Let's vote away the entire Bill of rights.

But then in California, that might not be a bad thing.

My real issue is with what I feel is the missrepresentation of what the issue is all about. Have you seen the video on the website? http://www.ohioans4financialfreedom.com/

With a name like "Financial Freedom" it seems very misleading to me. There have been many stories of the people gathering signatures either making false claims or truely being misinformed. It has been reported that the people gathering signatures have told people that by signing they would help bring the payday loan rates down.

Here is a story where The Ohio Farm Bureau is upset with the way farmers are portrayed in the ad. http://www.journal-news.com/o/content/oh/story/opinions/columns/2008/08/12/ddn081208mary.html

why does the farm bureau automatically assume that a guy with a truck in a john deere hat is automatically a farmer? i've seen lots of people that were not farmers wear JD hats. perhaps they were trying to play to those people "just scraping by" (old truck, "uneducated", no money till payday)

edit: its not even an old truck! what about the warranty? this is all nonsense

jrw1621 wrote: With a name like "Financial Freedom" it seems very misleading to me. There have been many stories of the people gathering signatures either making false claims or truely being misinformed. It has been reported that the people gathering signatures have told people that by signing they would help bring the payday loan rates down.

That's not limited to these bozos. The last dimwit that came to my door trying to get me to sign some sort of petition (I don't even remember what now) said it was for X when it was really for NOT X. Reading the first two sentences of the petition would have told you that much. I didn't let him clutter up my doorstep long enough for me to figure out whether he was a liar, an idiot, or both.

DILYSI Dave wrote:

GlennS wrote: I cant think of any downside if these businesses suddenly stopped existing. There are a number of ups however.

Downside - Responsible people who need quick money now, who recognize what it means to pay 400% interest on it, but are willing to do so, no longer have the freedom to make that decision. I know there have been time in my life when I would have gladly paid $115 next week for $100 right now.

and people should be allowed to be paid in company store fun bucks. hurray freedom!

I'm reminded of the Man Show episode where they set up a table getting women to sign a petition to end Women Sufferage. That has to be one of the funniest bits ever.

Do we make laws against blatenly ripping people off? Even if they want to be ripped off or are too stoopid to know the difference? That's a tough question, philosophically speaking. Like the current mortgate fiasco we are in. Who ripped whom off? Near as I can tell, everyone ripped me off, because I will be paying for it for the next 20 years or more and I didn't get anything out of it

We have ursary laws, but they are either not enforced or the collecting company happens to be in a different state and the SCOTUS recently ruled that it is OK for an out of state company to violate a state's ursary laws.

BTW, in Arkansas, they had a hard time passing the laws banning these companies but still letting the pawn shops stay in business. Their interest rates/scam is just as bad.

At least with a pawn shop, there is collateral. Don't get paid in time? You lose your guitar/ring/watch.

With the payday loan, don't they just saddle you with late fees until you either pay $thousands back on a $hundreds borrowed or go bankrupt?

Pawn shops...another line of business I have no use for.

Clem

edit: Oh...and that's the only "Man Show" episode I've ever watched...but it was very funny and very sad, that part about "ending womens' suffrage."

ClemSparks wrote: Pawn shops...another line of business I have no use for. Clem

They're useful when you're not too good at having garage sales or need a cheap guitar. Many of the ones around here buy used things and have something of an element of flea market to them.

The government tries to make finances idiot proof. Don't worry, the world will create a better idiot.

One of my standard stock of signature/quote-type lines:

"The advancement in idiot-proof technology is just sufficient to keep up with the advancment in idiot technology."

I'll confess that I haven't been into too many pawn shops, but I never found anything of reasonable value (unlike garage-sale or flea market shopping) at one. It may just be bad luck or regional differences.

Clem