Let’s take a minute to discuss the blatant duplicity of Ohio’s Rep. Chris Widener (R – Springfield). During the Assembly’s consideration of HB 545, which nobody except obtuse politicians and corrupt charities wanted passed, Rep. Widener met with several mom-and-pop payday lenders.  He told them, to their faces, that he liked their honest business models and would incorporate them into the legislation – the inference being that no rate cap would be instituted.
He lied. To their faces. A rate cap went in 48 hours later.
Being the addle-brained demagogue that he is, Rep. Widener is quoted in the June 7 Columbus Dispatch as saying ,”The fact that the industry will spend more than $1 million to collect signatures, plus $5 to $7 million on TV commercials begging Ohioans to overturn this law is foolish”.
Let’s examine who the truly foolish party is here.
On the one hand, we have an industry fighting to return a legitimate and useful product to consumers that was ripped away from them. They are spending about 3% of the annual revenue Widener cost them to save the product and deliver promised value to their shareholders.
Then we have Widener who, in one fell swoop, brought Ohio politics to a new low. Not only did he blatantly and knowingly lie to these average American entrepreneurs, but he did so in a thoughtless attempt at raising his political profile.  See, Rep. Widener is term-limited, so he must have been mistakenly acting out of some drug-induced high to believe that by banning payday loans, he would segue into the Senate on the backs of a cheering crowd.
Little did he realize he’s instead going to be run out of town by angry constituents with pitchforks and torches, who were robbed of a popular credit option against their will and despite 30,000 letters pleading him to kill the HB 545.
I’m thinking the Foolish Meter is in the red over on Widener’s end.
But then he pins the meter by criticizing payday lenders for their ballot measure expenditures. Yet somehow, he mysteriously fails to mention the several million dollars in unemployment compensation alone that Ohio will now have to shell out to payday loan employees who had to be laid off.
But Rep. Widener didn’t stop there.  He called the industry’s fight for the right to do business in Ohio “egregious and selfish”.  Considering his legislation was borne out of his own reckless and vainglorious ambition for political power, I believe Rep. Widener’s pot is a significantly more saturated shade of black than the industry’s kettle. And if he truly is confident that “Ohioans do not want working families taken advantage of anymore”, then I guess he’ll soon be sponsoring a bill to limit the massive overdraft fees that banks charge for people who bank checks. After all, that’s the only option his legislation left for folks who need short term credit.  That, and unregulated offshore lenders and real loan sharks.Â
At least Rep. Widener knows how to keep ’em rolling in the aisles. As he states, “Thanks to high costs charged in the past to Ohioans, payday lenders have got more money than they know what to do with.” What he should be concerned about is that payday lenders know exactly what to do with their money – fund the Kick Widener To The Curb Political Action Committee.
I’m ready to contribute.
11 users commented in " Payday Loans: Ohio’s Widener Has Some Nerve "
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The tide is going out on the PDL industry. Too many stories have percolated where granny Smith took out a $500 loan and, three years later paid $13,000 in fees and still owes the $500. These stories are EVERYWHERE.
Do you see that as WRONG. Probably not. Well, it is to most people. Widener was right to curtail this.
Meanwhile the high bretheren you sit amoung in some states seek treble damages to tighten the screws on granny. TREBLE DAMAGES on top of 400% INTEREST RATEs???
I have seen these cases. That is the product the Ohioians need BACK? This is what you will beg for signatures on?
The PDL product is egregious. More and more states are onto the scent, hearing about the Grannys who got trapped.
It should be lights out for the industry. Now, use Widener and his logic to nail the banks too. I have no problem with that… but NO SENSE going back and puttin grandmoms and others who are falling behind as risk of financial suicide when the times get tough.
If Granny Smith ate a Big Mac every day for three years and gained 300 pounds, should we take away Big Macs from the rest of us who choose to eat one once a month?
If Granny Smith drank 5 cups of Starbucks coffee every day, was over-caffeinated to the point of illness and couldn’t put gas in her car because she was buying coffee, does that mean the rest of us can’t have a latte once in a while?
If Granny Smith drives 100 miles per hour on the freeway endangering all other drivers in the vicinity, does that mean the rest of us should turn in our cars and walk from now on?
Of course not! Responsible legislation could provide Granny with a payment plan so that she could repay her loan over time, at no additional fee, if she could not meet the original terms of the loan. Responsibile legislation could have eliminated the ability to sue for treble damages, or charge high default fees. Responsible legislation could have made it more difficult for or eliminated the ability of a lender to sue Granny civilly to collect the loan or garnish Granny’s wages. Responsible legislation could have made sure that the choice for regulated short term credit was available in Ohio.
Unfortunately, the legislators in Ohio took away the choice of using payday loans as short term credit away from Ohio consumers, and now they will be forced to look towards more expensive overdraft fees, bounced check fees, late fees, or unregulated internet loans.
I hope that in the future all legislation is not based on the extreme cases, but on the responsible use of products and services so they can continue to be available to those of us who want and appreciate choices.
Consumers should decide whether to have access to payday advance services. By passing H.B. 545, Ohio’s elected officials have essentially eliminated payday advances in the state. Instead of listening to their constituents and more than 30,000 letters, tens of thousands of e-mails and calls from payday lending customers, legislators allowed the opinions of editorial writers and so-called consumer groups count for more than the opinions of the people responsible for putting lawmakers in office.
Politics have real-life consequences. Under this rate cap, the current fee of $15 per $100 advanced would be reduced to less than 10 cents per day. The law takes effect 90 days after it was enacted. In response, many payday advance companies have announced that they will be closing stores in Ohio, putting as many as 6,000 jobs in jeopardy. Companies are doing their due diligence to see what options might be available. If companies are forced to operate under HB 545, they cannot.
Sorry, McFly, but AClark has it right. You are quick to leap to Granny’s defense, but why don’t you assign any blame to Granny? She should not have taken out a loan that she could not afford to pay back. Responsible lending is one side of the equation but responsible borrowing is the other.
All of your crying is not going to bring back an industry that was solely set up to trap people in a bad lending scheme. Your comment that no one outside of one elected official wanted to see payday loan shops close is untrue. A vast amount of sane people wanted to see this predatory lending scheme gone from Ohio just as it has been abolished in other states like Arkansas, Georgia, etc… Yes, the people whom took out the loans are to be blamed also, but many of these people have the reading and comprehension skills of a child and do not understand just how bad they are being gouged. If the PDL’s cannot make a profit at a cap of 28% then their business models are seriously flawed and thereford they do not need to be in business, as the credit card companies seem to turn a profit with a interest rate lower than 28%.
Truth —
Your post perpetuates several myths for which you have not provided any evidence and common ignorance regarding their business model.
93% of borrowers pay back these loans on time. Thus, the vast majority are not trapped in anything. The only people who want these loans banned have never taken one out or seen its benefits, only the stories trotted out for the media to show how irresponsible people misused the product.
In states where it has been abolished, bounced check fees have gone up, as have bankruptcy filing.
You are also completely misinformed about who uses these loans.
The majority of payday advance customers earn between $25,000 and $50,000 annually;
Sixty-eight percent are under 45 years old; only 4 percent are over 65, compared to 20 percent of the population;
Ninety-four percent have a high school diploma or better, with 56 percent having some college or a degree;
Forty-two percent own their own homes;
The majority are married and 64 percent have children in the household; and,
One hundred percent have steady incomes and active checking accounts, both of which are required to receive a payday advance.
You are clueless about the business model. Payday loans have a default rate of 7% and monthly store expenses of $8000. 28% APR is not enough to pay the utility bill. Credit cards are vast enterprises, collecting interest on billions of dollars in debt. They are the true culprits in keeping people trapped in debt.
You clearly have much to learn. You should keep your writing about this topic to a minimum until you have learned more about it.
You can learn more TRUTH at:
http://www.cfsa.net/myth_vs_reality.html#3
Glad to see them gone,
“She should not have taken out a loan that she could not afford to pay back.” What about the responsibility of the lender? Shouldn’t a borrower’s ability to repay be part of the consideration? Consumers deserve much better than 391% interest. Payday lenders prey upon the desperate. Kudos to the Ohio legislature!
Scott J:
Lenders have their own underwriting criteria. If the loan was made, it was only after the borrower’s net income was examined. Payday lenders loan against 25% of a person’s income, so their ability to repay is ALWAYS considered.
But you, never having taken out a payday loan and never having set foot in a store, are totally ignorant.
Hello everyone, the reason payday loans exist because most Americans don’t budget thier money. Most of us spend our whole monthy or biweekly income before next payday. I am right?
If we develop the habit of saving 10% or 25% of our take home pay, then fewer or payday loan stores would exist.
Granny, while demographically quite unusual, may have been in over her head – long before she walked in the store. Then how did she get a loan?
When she filled out the loan app did she lie about having other loans? I’ll bet on it. Was her social security # legitimate? Unlikely. Was her employer real – or was it a friend on a cell phone pretending to be her boss?
No job? Perhaps she draws social security or a pension… no force on earth can garnish those – she’s judgment proof and she knows it. All she has to do is walk away.
Was she truthful about the age of her bank account on that loan app? Or whether she was overdrawn? How convenient privacy policies keep banks from sharing this information.
You say she’s in financial trouble to the point where she is seeking bankruptcy protection? How convenient there is a PDL store in the neighborhood to pay her attorney fees. In the future she’ll have to go on the internet to find payday loan lenders to pay her legal fees. I hope that isn’t too inconvenient for her.
Forgive me for being realistic, but after you’ve been taken by enough “granny’s” you get a bit jaded. If granny was real and wanted to get out of the payday loan trap all she has to do is ask for a payment arrangement. The store I work in will take ANY arrangement — we have people paying $10 a pay period; that’s $10 a month for some people.
Trap? Crap. At this point I don’t care if PDLs stay or go. The only thing I really want gone are professional leeches Widener gone. He called the 391% “fictitious”. Then did a back room deal to kill off the industry just days later. He knows the truth, he understands the math — but he not only voted the opposite; he wrote the bill.
His only redeeming quality – he does care about at least one job in Ohio; his.
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