An estimated 2500 people rallied outside of the Statehouse in Columbus Ohio to protest new legislation aimed at curtailing the loan practices used by the Payday loan industry.
Ohio lawmakers have passed House Bill 545, which sets the maximum annual interest rate on payday loans at 28 percent, this is a far cry from the current 391 percent. It also sets a loan maximum of $500. It would require that loan terms would have to run at least 31 days, (current loans are usually 14 days). And a borrower would only be allowed four payday loans per year.
There are some 1,600 Payday Loan companies employing an estimated 6,000 people in Ohio. Industry insiders are saying that this new legislation will force the closure of many of these establishments, thereby forcing layoffs in the industry.
This is a contentious subject and while an APR of 391% seems completely ludicrous to reasonable people, in monetary terms it is quite small when the length of the loan is taken into account. Payday loans are usually for a 14 day period, and the cost to the consumer is about $15 per $100 borrowed. Slashing the interest rate to 28% will reduce the profit margin to less than $1.50 thereby making it a money losing prospect for the Payday loan companies.
There are also arguments that without this avenue of emergency lending people will be forced to seek more riskier methods to obtain money. The vast majority of the Payday loan customers to not have other avenues of credit to pursue. Much is written about the plight of the working poor and the tightrope they walk, one paycheck away from homelessness, this legislation could well be the straw that breaks the camels back for some low income families.
Simon Barrett
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10 users commented in " Payday Loan Protest In Columbus Ohio "
Follow-up comment rss or Leave a TrackbackLegislators are ignoring the only people whose opinions should really matter- those of the customers who use the service and the employees whose jobs are on the line. It’s easy for people who have nothing to lose to call for a ban. They have nothing to lose. Their jobs aren’t on the line and they have likely never used (or even needed) a payday advance. Employees are very concerned. Their income and benefits are at risk. Hundreds of employees have attended legislative hearings; thousands have reached out to their representatives through emails, letters and phone calls. Nearly 30,000 customers have written letters, urging legislators not to take away a personal credit choice. Unfortunately, the voices of employees and customers, the people that matter most, landed on deaf years in Ohio’s House of Representatives. We hope Senators will listen.
I believe in capitalism, not capitalize’ism. Payday lenders capitalize on the lower income people. As a former user of payday loans, which have on snowballed the finacial situation, I strongly support the destruction of the payday loan industry with one point of reservation. Legislators should have first attacked the banking and credit card industry with laws to eliminate excesive fees and predatory practices. Then, examine and legislate the credit scoring system which impowers bank to financial rape the lower income. THEN, eliminate the payday loan industry because there would not be a need for it. But us poor poor beggars can be chosers. In summary, I AM IN SUPPORT OF LEGISLATION SUCH AS HB 545
payday loans are a personal decision to borrow money. what about real estate taxes rising while people are losing their homes. isn’t this the same or worse? most people who use these places have put themselves in a situation where they need these loans to get by. if they were not around it could hurt some people. yes the interest is high but how else can you get a quick loan like this? it is a personal decision each person has to make before using it. did jerry just win the lottery? i happen to need to use these places often with prices the way they are.
The freedom to choose is slowly slipping
away here in america. I choose cheaper Gas but no where to get it, i choose to get a pay advance but now they want to tak that away too.
With out it to help pay for the price of gas i could be forced to leave my job cause i cant afford to get there without an advance to help pay for gas ( catch 22 ). The folfs we put in office to help us and stand up for us seem to abandon us once elected, i’m sure there pockets are plenty deep enough they aaren’t concerned
about how to pay for things
in regards to payday loans, my husband got very sick 2 years ago and had to have surgery we started borrowing from these places and before we new it we borrowing one to pay for the other every week. If we could’nt pay they would not work with us to pay this money back. they sent the check to the bank and that started a spiral down fall. We had over a $1000 dollars in the bank on payday by the time we got of we were -$500 we did’nt have money to pay our bills, or to buy food for our children. We went about $10,000 in debt. Thank God that our buisiness was sold and we were both able to tke out our retirtemint to pay everything off. I say amen to anybody that feels the need to step in and fight these losn shark. We have been clear for a year now and I would rather be homeless than loose my life to theese people
You choose to pay less for gas but cannot find anywhere to get it? This is a capitalist society, not an anarchist society. I choose to shoot you in the head, but alas, EVEN THAT is against the law. What is wrong with the government?
This will certainly hurt the poor in the short-term, but the idea is that if these loans are not available, less people will put themselves in the situation in the first place. While there are certainly some people who have used payday loans responsibly, the vast majority do not. We are a credit society and most of us have no idea how to manage credit. I hate to tell people what they can and cannot do, but payday loans are hurting the economy overall, which not only hurts the government, but hurts me.
Its about time someone has done something about these places, its one thing to charge an interest rate but 391% is way to high. I have borrowed from these places before and regardless of how much you need the money its not worth it. Once you borrow it seems like you have to continue to borrow every 2 weeks because you need the money to live on. Most places will work with you on anything, including food. Thats why they made food pantries for. There are budget plans for all utilites, and they also have housing for for individuals with certain income. Some small auto repair shops also let you charge and make smaller payments, hospitals let you make payment, etc.If you cant make it on what you make on what hours you know that you will get at work, then you have way to many bills. If you become disabled thats why they made short time disable options for you at work and on loans take them they are pennies compared to what you would have to pay at these place. If you ask me CLOSE THEM ALL!!!!! ITS NOT WORTH IT TO BORROW!!!!!
with a payday loan it is agreed upon by the customer prior to receiving the funds that it is to be paid off in the given time frame usually 2 weeks, the fee attached is a small fee for a short term loan. if you cannot pay it off in that time they cash your check as you agreed! if you are unable to pay it off in the agreed upon time frame it is no ones fault but your own. you are not taking out a 1 year loan at 391% interest you are borrwing at $15 per one hundred. The fault is solely on the customer for not paying it back. I am sick and tired of everyone passing the blame off for their own lack of responsibilty. that is what is wrong with the world is everyone blames everyone else this then allows for these types of situations where the government steps in and makes decisions for you. Freedom is for the intelligent if you cannot be intelligent you allow someone else to think for you. Congratulations people for allowing our freedoms to disintegrate under the guise of protection. Stand up and take responsibility for yourself only then will we truly be free!
Since I can not receive the payday loan I am gonna lose everything My bank account is $800.00 in the overdraft and my paycheck is only $400.00 my house payment is overdue my refrigarator is empty and I can’t find a loan any where I hope that the folks that passed this bill are enjoying their dinner tonight because we’re havingcan corn and crackers
You can contact the payday lender directly and expalin your situation. They can help you settle your debts
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