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The Dispatch wrote
Strickland signs payday-lending bill
Tuesday, June 3, 2008
By Jim Siegel
Gov. Ted Strickland yesterday signed tough new restrictions on short-term lending in Ohio that supporters say will put an end to a payday loan industry that does far more harm than good for Ohioans in financial trouble.
When the law takes effect in 90 days, it will put an end to the payday lending industry as it exists in Ohio, likely pushing many of Ohio’s 1,600 payday stores out of business. No longer will lenders be able to offer two-week loans with a 391 percent annualized interest rate ($15 per $100 on a two-week loan).
Strickland said the bill shows that “We will not tolerate individuals being exposed to exorbitant rates, which does contribute to this cycle of indebtedness.”
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wow, holy crap this is awesome.
in unrelated news, unemployment in Ohio…
… will barely budge even if the entire industry goes under (and I concede it might, in this state). The industry employs 6,000 in the state, according to a number I saw recently in the Dispatch. That really isn’t a tremendous amount of personnel. The damage they do to their customers is far greater than the benefit they provide to their employees.
Anyone is welcome to read my comments earlier on personal responsibility and why this should not have been a state issue.
I love that it is perfectly acceptable to be fine with 6,000 people losing employment simply because one doesn’t like the profession. I have a feeling that someone opposed to alcohol would be reamed royally if they took the same view in the Smith and Wolansky thread.
the state regulates lots of things, I don’t see how this is any worse.
I dunno. I’m opposed to unknowingly paying top dollar for cheap alcohol, and I wouldn’t miss S&W.
I’m really not clear on what you’re advocating here, though. No government interference in free commerce, regardless of whether people find the trade in question distasteful? Because if that’s the case, a ring of 5,999 of my friends and I have got some crack-addicted 9-year-old sex slaves that we’d be happy to rent to you by the hour, as long as you don’t beat them too badly (cuts and bruises are all right, but no branding, please).
I think thats a bit to the extreme.
My point was simply that many here found the payday loan business distasteful and have ignored the job loss as a result. Unlike S&W, which violated state liquor law/regulations, until the state stepped in, Payday Lending was OK in this state. Funny that so much of this was to stem the effect of predatory lending, yet where is the legislation on credit cards targeting college students?
Now if I was opposed to alcohol and made a comment against the bartenders, who most here agree where thrown under the bus, I would probably be reamed for it.
Sure the state regulates lots of things, but to what extreme does it need to go. Maybe the next round of DUI laws will include shutting bars down if a driver frequented the establishment.
Payday Lending is perfectly acceptable if you use it responsibly. We can not (and should not) legislate to prevent or mitigate the effects of stupidity. Work to enhance financial education in our school districts and within the lower income communities instead of throwing 6k on the streets with bills to pay and mouths to feed simply because one doesn’t like the (legal) industry.
Of course; that’s the nature of reductio ad absurdum. The question is whether the example fits the general principle advocated and, if so, whether it invalidates it.
Well, some would argue that crack whores are as well, and that the government is just stepping in and spoiling a good thing.
More seriously, though, the question isn’t whether it’s a good thing if used responsible in principle. We’ve had it for years. The question is, is it being used responsibly in practice? If not, then you can make the argument that it’s a net social ill, regardless of the reason.
yeah, i think the gouging and predatory lending to the poor is in very bad taste, but i don’t really oppose the check lending institutions for moral reasons.
it’s bad for the community/economy, pure and simple. same as loan sharks, only legal. check cashers are still legal, they were just put more inline with other financial institutions.
and this isn’t anything new, Ohio is just getting in line with other states already capping these institutions. there’s an entire history of studies on why these places are bad.(and by ‘bad’ i don’t mean morally)
The problem is, that like all governmental regulation, it only shifts the problem. Where will the poor turn now for financial assistance? Prostitution, drug sales, theft? I understand that is a gross generalization of the poor in our community. Many will probably turn to the food pantries and shelters for help as needed.
This legislation has done nothing but provide feel good legislation for the members to return to their districts as the triumphant champions of the common person. Makes for a great political ad coming into the summer campaign season, huh?
My point was simply that many here found the payday loan business distasteful and have ignored the job loss as a result. Unlike S&W, which violated state liquor law/regulations, until the state stepped in, Payday Lending was OK in this state. Funny that so much of this was to stem the effect of predatory lending, yet where is the legislation on credit cards targeting college students?
Actually, the responsible-lending activist community has been active on that front as well. It has not risen to a state level yet (though I wouldn’t be surprised if it did) because colleges have been adapting on their own; for example, restricting credit-card solicitations by stuffing dorm mailboxes for the first week of school.
Local authorities already have the power to shut bars down that prove to be persistent nuisances. They also have various powers that can prevent such places from locating in areas where they’re likely to have too deleterious an effect on the surrounding neighborhood.
Payday lending is almost never used responsibly, and this isn’t a case of a small minority of bad apples ruining it for everyone else; it’s a case of endemic dependence and irresponsibility making the social and economic costs to the community of allowing the industry to continue in its current form inviable.
This goes beyond mitigating the effects of stupidity. Like laws against DUI, these are primarily about protecting others, about protecting the community from the idiot by reducing his opportunity to act like himself.
Six thousand people is not a substantial number given the size of Ohio’s workforce, and since most of them are in generic, fungible occupations like retail customer service, they should have little difficulty finding other jobs. The need to save six thousand jobs is no more argument against leaving the industry free to ruin others’ lives than the desire to produce six thousand jobs is an argument for legalizing prostitution. First, there are more important things than money; second, even in the economic sphere, the economic damage done by fostering a cycle of dependence on 391%-interest products outweighs the damage of temporarily making 6,000 people find new jobs.
I think predatory lending and imparied driving laws are two very different issues. DUI presents a greater risk and endangerment to the society than predatory lending. It also creates a slipery slope in which social ills are legitimized by the state and which aren’t.
We go after one form of predatory lending, but leave credit card companies, mortgage lenders (wasn’t there an article today on discrepencies in lending practices for mortgages?) and others alone. We make claims about social ills and the betterment of society, yet if we can sin tax something its OK. The state fights tooth and nail to keep casino gambling out of the state, but hey, lottery is OK, it supports the kids. Let’s ignore some of the economic benefit that might be had in very depressed regions by driving tourism into these areas.
I just find it hard to grasp the concept that in some cases our state wants to be the nanny state and wrap us all in bubble wrap and knee pads to protect from ourselves, but has no problems letting us run with scissors in other cases.
Honestly whats worse for society:
The father who might head down to Checksmart once in a while to help fill his gas tank to get to work to put food down on the table or the father heading to the 7-11 with his weeks pay for a handful of lottery tickets and a 6 pack?
What I want to know is what’s going to go into the locations that will be shutting down. Quite a few in urban locations. I’ve often thought the one in the Short North was quite the eyesore.
http://maps.google.com/maps?f=l&hl=en&geocode=&q=National+Check+Cashers&near=Columbus,+OH&ie=UTF8&z=11
http://maps.google.com/maps?f=l&hl=en&geocode=&q=Always+Payday&near=columbus,+oh&ie=UTF8&z=11
http://maps.google.com/maps?f=l&hl=en&geocode=&q=Check+into+Cash&near=columbus,+oh&ie=UTF8&ll=39.96202,-83.00301&spn=0.348407,0.646133&z=11
http://maps.google.com/maps?f=l&hl=en&geocode=&q=Cash+America+International&near=columbus,+oh&ie=UTF8&z=11
http://maps.google.com/maps?f=l&hl=en&geocode=&q=Advance+America&near=columbus,+oh&ie=UTF8&z=11
http://maps.google.com/maps?f=l&hl=en&geocode=&q=Checksmart&near=Columbus,+OH&ie=UTF8&z=11
Were there always 2 pages here?
That is a great question. More urban blight on the way?
I don’t know. I’d say that legalized (and regulated) prostitution would have a much greater positive public benefit (from the standpoint of public health and security) than the legalized loan sharking of payday loan businesses.
Bring back Atlantis!!! :lol:
I think it is stupid that they capped the interest rate. On an annualized basis, sure the % is high, but these are supposed to be short term loans, not long term. if people are too stupid, then that is their fault. As long as the business is up front and honest about their fees i see no problem with pay day lending. I used a cash advance a few times when i was 18 or 19, and it saved me from being evicted those times. It is a great service, if you are young, and make no money, and have no credit cards. I view the people that get in trouble with pay day lending in the same way I view people who get in trouble with credit card debt, or mortgages they cannot afford. Screw em.
Thank you
The other issue is the outright elitism of our government in issues like this. The “we know what is best for you” BS has got to stop.
If you think that 391% interest is best for you, then the government’s case that it “knows better than you” starts out with a solid head start by any objective standard.
Moreover, the effect these operations have on communities is what justifies intervention. There are negative externalities to letting businesses like this operate. I’m all for living and letting live when that’s actually possible.
Name these “externalities” then. Please, enlighten us.
Frankly there is far worse than this in our community that needs dealt with.
By your logic, we might as well bring prohibition back.