Payday Loan Politics in Ohio

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.

Ditto, what about informed, responsible people that are just in a tight spot? They no longer have the freedom to make that financial decision. I feel like there are better ways of regulating the business if you are gung ho on regulation. How about allows the 400% interest up to X dollars loaned, or up to X number of loans, or graduate the interest rate based on debt incurred to avoid the horrible compounding interest never-ending cycle? I don't think this should be regulated...similar to motorcycle helmet laws, I don't think the government should be telling you what to do, but I do think you're stupid if you don't wear a helmet (or if you get a paycheck loan in anything but a dire situation). Just like there are some times when no helmet is fine (riding in a parade?) there are some times when a paycheck loan at 400% interest would be fine (find a Miata hardtop for $150 bucks but you don't get paid until the next week and you can resell it for more than enough to cover interest or just get it for a smokin' price even including interest?).

Bryce

Didn't they de-regulate the loan industry regarding interest rates years ago? My wife has a credit card that charges her 30% interest annually.

Yes they did... due to lobbying from the credit card industry.

Lets just stop regulating financial institutions. Oh the glorious freedom that would bring on.

These places do more than than charge too much interest. They deliberatly prey on the uninformed, and ensure they stay uninformed. Go to almost any military instalation and they are just outside the gate, along with the "Military Loan Specialists." They ensure that "they will handle to paperwork." The paperwork like anything else in the goverment is a month behind. When the automatic deuction starts, it is eaten up by interest and late charges, and no one bothers to tell the poor junior enlisted who took out the loan. So a year later when he thinks he is done, he hasn;t mde a dent in the principle.

Now as far as Dave's comment about the "I'd pay $115 next week for $100 right now." Sure. When I was in my 20's and the new girl finally agreed to go out with me, you better believe it, and there are places like that, straight up. Its gonna cost you $15 to get this $100. Only they call it a fee. Unethical? Maybe, but everyone know what they are getting into.

But even as a freedom lover, when these businesses start misleading my troops, I want them gone.

GlennS wrote: Lets just stop regulating financial institutions. Oh the glorious freedom that would bring on.

You must be joking, right? If they did that the present day 30% default rates would skyrocket. But more importantly what would trigger this event would be come commonplace.

So how maney of you guys had to go to one of these places? Yes I have, classic story of had to pay rent or day care and gas up the car. If your smart about its not that bad if you dont do it often. Paying $15 for evey $100 is alot less than the late fee's from my land lord and overdraft fee's from the bank.

as a freind of mine said " If I dont get this money I cant hire a lawyer and I will go to jail, If he doesnt get me off on the battery charge I will go to jail and default on the loan. If I do get off I can pay it back with my next paycheck" He had thought it thru and decided it was the best option. He went to...... WORK and payed back the $$ the next Friday.

carguy123 wrote:

GlennS wrote: Lets just stop regulating financial institutions. Oh the glorious freedom that would bring on.

You must be joking, right? If they did that the present day 30% default rates would skyrocket. But more importantly what would trigger this event would be come commonplace.

yes, im joking.

Nashco wrote: Ditto, what about informed, responsible people that are just in a tight spot?

informed responsible people and pay day lending? Does not compute.. If you really were informed and responsible you wouldn't need it.

I'd believe you better if you said.. I needed a dime bag and my stable wasn't producing... so I went to Check into cash...

Ever wonder why your credit card bills have a Wilmington address on them? Because there's no laws against loan sharking in Delaware.

GlennS wrote:

carguy123 wrote:

GlennS wrote: Lets just stop regulating financial institutions. Oh the glorious freedom that would bring on.

You must be joking, right? If they did that the present day 30% default rates would skyrocket. But more importantly what would trigger this event would be come commonplace.

yes, im joking.

It's called sarcasm. You see it now and then on this board. You can tell Glenn was joking since he's from California. That means he's a hemp-wearing, pot smoking, "dude"-saying, Birkenstock-footed, Granola-crunching, surfing hippy.

MadScientistMatt wrote: Ever wonder why your credit card bills have a Wilmington address on them? Because there's no laws against loan sharking in Delaware.

also the no taxes.. Many companies have their main address in wilmington or Newark for tax purposes.

ignorant wrote:

Nashco wrote: Ditto, what about informed, responsible people that are just in a tight spot?

informed responsible people and pay day lending? Does not compute.. If you really were informed and responsible you wouldn't need it. I'd believe you better if you said.. I needed a dime bag and my stable wasn't producing... so I went to Check into cash...

So you mean to tell me that you (or someone you know) are informed and responsible and you've NEVER needed to borrow money? Obviously you're kidding, it's not like druggies are the only people using these places, but surely you or somebody you know is informed, responsible, and has been in a tight spot before.

Bryce

My intention was to inform the others here from Ohio because there are quite a few. I am supprised to see little input from Ohio and what there has been is basically, "If people are stupid enough then so be it."

I agree, ther may be a flaw in the system where banks do not make small loans but I do not think that this system of legal 391% is the answer.

Here is some input from the other side of the issue: "The number of payday lending shops has grown from 107 in 1996 to 1,562 today. Ohio now has more payday lending locations than McDonalds, Burger King and Wendy’s restaurants combined." http://www.cohhio.org/advocacy_responsible_lending.php

Everyone I have ever known of that used one of these payday advace places have been the type of person that does not know how to handle their money. I'm sure that is not always the case. If you need to borrow money, go to a reputable bank. If you cannot get a loan you should reconsider your spending habits. The payday advace places, in my opinion, prey on the very people who should not be using them.

I'm not too impressed by stats comparing fast food joints with fast cash joints. In either case...you've got the whole "prey on the misinformed" argument...

[/devil's advocate]

Clem 'stir the pot' Sparks

ClemSparks wrote: I'm not too impressed by stats comparing fast food joints with fast cash joints. In either case...you've got the whole "prey on the misinformed" argument... [/devil's advocate] Clem 'stir the pot' Sparks

I thought the same thing Clem, comparing to fast food joints seems like the pot calling the kettle black.

G73, let me know how that goes next time you go to your bank and try to get a loan in 15 minutes for $150 to buy a Miata hard top. Better yet, let me know how it goes when you try to get a loan because you need to get a dime bag and your stable isn't producing.

Bryce

Bryce, Just a wild thought here: Maybe if you don't have $150, you shouldn't be buying a Miata hard top.

I'm split on this. On the one hand, we have people from the lower classes who we can consider victims of the Democratics' education and wealth redistribution system failure. They are being preyed on by a group of organized theives, one step out from the credit card companies. Is it society's (Da Government's) role to protect these people from their own stupidity and lack of knowledge, education and money handling skills? Probably not. However, on the other hand, if we don't protect these people, they will only continue to spiral downward or at a minimum never spiral upward. A "business" group found a way to screw them to the wall in a quasi-legal manner. Making that screwing illegal is reasonable, I think, too. Many, if not most (I think) states have ursary laws. Outlawing these places falls into that category. Calling it a "fee" instead of interest is a lawyer game of symantics along the lines of "I did not have sex with that woman" or "depends on what the meaning of the word Is is."

Of course, depending on what state you live in, there is very likely nothing that these preditors can do to you if you don't pay up. They can't break your kneecaps, they can't come repo anything. About all they can do is file a bad credit report on you, and if you are using these people anyway, one more bad credit report is probably the least of your problems.

I stand corrected by Dr. Hess. One upside to these guys is that the loandsharks have to opperate in a "quasi-legal manner" which is always nice. Im sure most people like their kneecaps.

Dr. Hess wrote: Bryce, Just a wild thought here: Maybe if you don't have $150, you shouldn't be buying a Miata hard top.

So you'd discourage some college kid who was tight on cash and just starting up his summer job buying something on loan to flip it? If that Miata hard top would sell in short order for $600, so even after fees and interest he still came out on top of the deal $300 richer, wouldn't that be a wise investment? Just because the kid is tight on cash because he only works 3 months out of the year and couldn't borrow from mommy or daddy or Tony, he then shouldn't be allowed to borrow money from a willing lender for a fee....legally?

I'm playing devil's advocate, as I don't give 2 poops about Miata tops (just trying to put things into easy GRM terms!), but I think there is rarely a rule that goes without exception and this is one of them. These places suck, but Uncle Sam telling them they can't charge what they want under any conditions is absurd. People waste their money on cigarettes, booze, baseball cards, video games, etc. that have a huge upcharge based on supply and demand and the government still allows you to waste your money on that, why pick out somebody letting people waste their money on money? Like I said, I could understand if it was "to protect people from themselves" and they limited it to $XXX or X times/period of time or $XXXX cap on interest, but to just outright say they have to reduce their fees/interest without any exception is a bit off IMO. I've never used one of these places, heck, I've never even bought something at a pawn shop. One of the payday loan/cash for title places nearby me just shut down and I was overjoyed, it's been a real eyesore to me...but I didn't think for a second that the government should clamp down on them, instead I hoped that people would stop going there. Lo and behold, they went out of business all on their own.

Bryce

Nashco wrote: So you'd discourage some college kid who was tight on cash and just starting up his summer job buying something on loan to flip it? If that Miata hard top would sell in short order for $600, so even after fees and interest he still came out on top of the deal $300 richer, wouldn't that be a wise investment? Just because the kid is tight on cash because he only works 3 months out of the year and couldn't borrow from mommy or daddy or Tony, he then shouldn't be allowed to borrow money from a willing lender for a fee....legally?

Yes, I would discourage that. If some hypothetical college kid tight on cash can't come up with a measely bill and a half, when a tank of gas in a Camry is half a bill, then that college kid doesn't need to be borrowing money from people like this.

Miata top is a great example for me. I don't make a great deal of money and had a deal fall in my lap. $500 for a 93 Miata with hardtop. Really kinda beat car, but it ran (and leaked) and I bought it. The trick was that I control my money! I noticed that I was surrounded by people who could not come up with $500 on an hours notice if their babies life depended on it. Fellow I bought it from earns about 5 times what I make but really needed money fast.

Pay-day loans are not for the financially intelligent! Rent to own is stupid! I spent 20 years trying to earn more money without watching how I was spending it closely.

While I think that Payday Loans are the new snake oil scam, how can I be against them when I do the same thing! I sold the hardtop from my $500 Miata for $900 and I still have a running driving Miata!!

83 5.0 Mustang vert I bought so a friend could make his wifes Escalade payment, 91 Ranger for rent money, tools for a tank of gas, 91 Escort for an electric deposit, and the examples continue....

Truth is, there will always be people who need fast cash for whatever reason. There will always be those ready to make a buck off their distress. A lot of these Check cashing or loan places are owned by LARGE banks and simply do what a bank used to do. They are just amazingly more profitable at it.

Bruce