As I’ve pointed out many times in many articles, a 28% APR rate cap on payday loans put those lenders out of business. This is unquestionably bad for consumers, as they’ll be forced to other more expensive credit options – the most notable being hefty bank and credit union overdraft fees.

Readers know that I sent Rep. Matt Lundy of Ohio a letter, detailing all the reasons why a 28% cap is wrong. He chose to ignore it. He’s pressing ahead with his poorly conceived bill, and I decided to try and figure out why.

After all, Lundy’s very own website proudly proclaims that his agenda is for the “retention and creation of jobs”.

This bill will kill at least 3,000 jobs – during a recession, no less.

This makes Representative Matt Lundy of Elyria a liar.

He says that payday lenders have found “loopholes in the law”.

Payday lenders are operating entirely within Ohio statutes.

This makes Representative Matt Lundy of Elyria a liar.

He claims his bill “protects Ohio consumers” when it actually pushes them into the arms of more expensive credit providers.

This makes Representative Matt Lundy of Elyria a liar.

Now we turn to Bill Faith, the E.D. of COOHIO.

Bill Faith says that “28% is a reasonable lending rate”, when in fact it puts lenders out of business.

This makes Bill Faith a liar.

Bill Faith says the payday lenders are “pushing loans that are bloated with fees”, when in fact the statutes only permit two fees: a small loan origination fee and a credit investigation fee.

This makes Bill Faith a liar.

Bill Faith says that, prior to the passage of the Short Term Loan Act, that lenders provided proceeds in the form of cash. Not all of them did that.

This makes Bill Faith a liar.

Lundy was asked by reporters what statistics he has on how many people actually did cash their checks in payday loan stores (which is both legal and optional). Lundy admitted that he did not have those statistics – which begs the question of why it would be necessary to close a loophole which isn’t even a loophole, when he doesn’t even know how often this non-loophole is actually being exploited or not.

This makes Representative Matt Lundy a grandstanding politician.

Lundy says, “While we know you are walking in there of your own free will, we don’t believe you are being treated fairly”.

This makes Representative Matt Lundy of Elyria a Paternalist, who believes government should make decisions for people, to control their actions, and not permit them to live free lives. Others call this “Fascism”.

Lundy was asked where this short-term lending demand will go. Lundy said, “I’m a big believer in keeping the dialogue open with banks and credit unions”. These would be the same banks and credit unions that offer overdraft protection as a form of short term credit, and cost three times more than a payday loan….and just happen to be exempt from Lundy’s bill!

And the grand finale (drumroll), a sharp reporter pointed out that payday loan opponents intended to put the lenders out of business with the rate cap, but then later backtracked and said they only wanted to stop the gouging, and were now saying that they did want to put them out of business. Which is it?

Lundy’s answer was a clumsy version of the Curly Shuffle, claiming that he was just enforcing the mandate of the people to make sure loans were made at 28% APR, and that lenders would “have to determine to structure their business model to make it work. That’s not a decision for us to make”.

Read that again. You know, that sentence where he says it’s okay for government to institute price controls but that it becomes the business’ problem to alter their (usually fixed) expense structure to make it work.

Never mind that this is what payday lenders ARE DOING in response to the business-killing Short Term Loan Act from last year.
I guess Lundy must really want to challenge those business owners!

This is akin to saying to a hotel, “You can only charge $5 per night. You’ll have to structure your business model to make it work”.

Or saying to Ringling Brothers Circus, “You can only charge $1 for a ticket. You’ll have to structure your clowns to make it work”.

I wonder how Matt Lundy would feel if he was told, “The People of Elyria are going to pay you $1 for your pathetic, paternalistic, grandstanding, mendacious representation of them. You’ll have to decide if your pandering legislative model is worth it.”

I wonder how Bill Faith would feel if he was told, “The non-profit corporation you run has decided to cut back your exhorbitant salary, so that it actually reflects what most non-profit Executive Director’s earn, and the rest goes to actually helping the homeless.”

Oh, and just to make sure that everyone at the press conference could be confirmed as a liar, Tom Allio stepped in to clarify, “We’re not here to put them out of business, but to put them out of business of manipulating Ohio statutes.”

No, Tom, you’re there to put them out of business. Just admit it. You might garner a bit of respect for just telling the truth.

Anyway, all this leads to questions that nobody has asked, yet need to be answered, because Ohioans have a right to know.

What is the real motive behind the attempted assassination of payday lenders, and the subsequent bleeding of the consumer by credit unions and banks?

Either Lundy and Faith are stupid, they are ideologically-driven liars, or they will profit politically or financially from the demise of payday lenders.

So are Lundy and Faith stupid?

Apparently not. They can string two sentences together and have shown the kind of devious methods utilized by reptiles in the serpentes suborder.

Are they just ideologically-driven liars?

Possibly, but this option doesn’t serve them as far as personal gain and that usually trumps everything.

Personal gain? I think so.

First, we have to look at Bill Faith. Ah, yes, the mysterious Bill Faith. The Executive Director of the Coalition on Homelessness and Housing in Ohio. What exactly do we know about him? Not much. COOHIO flies well under the radar. Yet while purporting to be an advocate for low-income citizens, the Center for Consumer Freedom has discovered that Faith’s coalition includes some organizations without phone numbers, organizations that are listed multiple times, and organizations that have confirmed they have not supported the group’s position against payday lending.

Then there’s the little problem about salaries, of which Faith receives six figures, far above the median pay of $54,000 for executive directors of non-profits. COOHIO spent less than one-third of its revenue on actual programs, far below the 65% recommended by Doesn’t sound to me like a terribly efficient advocate for the homeless. Sounds more to me like a way to line Faith’s pockets and pursue his ulterior motive.

That motive likely lies in Faith’s link to the corrupt Center for Responsible Lending. Self-Help, the credit union behind CRL, and therefore behind Bill Faith, stands to gain by picking up customers from defunct payday lenders. They want to suck the blood of former PDL customers by hitting them with onerous overdraft protection fees.

According to Network Solutions, the domain name for COHHIO’s website ( is actually owned by Connie Busch of eSpace communications, a Dublin, Ohio based consulting firm whose clients are Telhio Credit Union, e-Choice Solutions which is an online brokerage for credit unions in Ohio, and CU Ballot, an electronic voting system for credit unions.

So one wonders how much money COOHIO, as well as Bill Faith personally, has received from Self-Help or CRL.

But you see, we can never know. Because non-profits don’t have to open their books. And you can bet that neither COOHIO nor Faith will release their financials to the press.

And yes, I’m formally asking to see them.

Show us, Bill. Otherwise, Ohioans may assume the worst: that there are backroom payoffs being made to COOHIO and to you.

What does Lundy have to gain? From a political perspective, he is taking advantage of Ohioans, 95% of whom don’t use payday loans, and who only hear about allegedly exorbitant interest rates, and think Lundy is being a stand-up guy for fighting “the loan sharks”. He sets a fire where one doesn’t exist — a “loophole lubing” (never mind the bizarre scatological reference) — then shows up in fireman gear to put it out.

From a financial perspective, I want to know if CRL, COOHIO, Faith, or any of their tentacles are putting money into Lundy’s campaign pockets, or personal bank account.

What Lundy doesn’t realize is that he’s playing a dangerous political game. The Short Term Loan Act was nothing more than a political pageant, arranged as payback by Ohio Republicans seeking to destroy a Democratic politician. The people of Ohio, and payday lenders, got caught in the middle. I’m guessing Lundy is just playing suckerfish, chasing the entrails of his counterparts in the Legislature. I say “just” because that’s what we’ve come to expect from most politicians…they don’t care one bit about you, only themselves.

Follow the money, and you’ll see. Follow it, that is, if they let you.

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