October 28, 2008
Payday lending sharks are still around
North Carolina may be one of the lucky and forward-looking states to have rid itself of the predators known as “payday lenders,” but these bums are still doing their worst to keep their Ponzi scheme of an industry alive and well in other states. According to the Wall Street Journal,
Payday lenders are spending millions of dollars to back ballot initiatives that challenge state restrictions on their cash-advance practices….They are pouring $30 million into initiatives that will be on the Nov. 4 ballot in Arizona and Ohio, where payday-lending branches outnumber Starbucks and McDonald’s outlets combined. The two states have laws that kicked in this year that cap annual interest rates at 36% and 28%, respectively, effectively outlawing payday lenders, which have a business model that depends on average annual rates of 391%.
By the way, this is an issue that, to my knowledge, neither Perdue nor McCrory has ever addressed. Whoever wins would do well to follow Governor Easley’s lead on this and other consumer lending matters. It’s an area in which he has shown tough and consistent leadership.
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11 Comments Add yours »
Yeah, NC still has a payday lending issue. It is now completely unregulated over the Internet. Because some “nanny state” know it all believed these loans were bad in any form, the put them out of business. Unfortunately, that left NC residents with two choices 1) pay higher bounced check fee charges (typical payday loan charge is $15- per $100, while the typical bounced check fee is $30-. The other option North Carolinians have is to use unregulated off-shore payday lenders. These folks charge much more than regulated lenders who used to operate under the watchful eye of the NC Banking Commissioner.
Here is a sad case of when too much regulation lead to a bigger problem.
Forget if you agree with pday loans or not- FOCUS on the fact that the Ohio General Assembly thinks they have the right to control what financial products are available to the citizens of Ohio. Big brother style.
Forget if you have used a PD loan or not– FOCUS on the fact that other consenting adults do and are capable of making their own decisions, based on their individiual situations. Who are we to say no, you can’t use that credit card? Or no you can’t use that bank?
Forget everything else — FOCUS on the fact that eliminating payday loans DOES NOT eliminate the need for short term financial options. I bet 99.9% of the OGA doesn’t have to worry about the day to day necessities the rest of are dealing with. They have insurance, pensions, well paying jobs.
Forget about the Pday loan argument — FOCUS on the controlling and spending of our household money by the state. Considering our current economic situation… I vote for less intrusion!! PLEASE let me manage my own darn $$ since the gov’t has shown they are not responsible, accountable or budget conscious. Ohio>> 60M in debt!!
Forget about the Pday loan side– FOCUS on what else the government is going to decide in the future (under the guise of “paternalism”) that we aren’t capable of handling as adults. Restricting how much can be spent on food? alcohol? cigarettes? housing? gambling? clothes?
FOCUS on the fact that the OGA is intruding on our personal financial decisions… where does it stop?? Why do they think they know better what will work for us than we do? We live it every day!!!
The Issue of 5 is waaaay bigger than PD Loans >> its about Financial Freedom of Choice, which I consider to be a BASIC FUNDAMENTAL RIGHT!
***NO on ISSUE 5 in Ohio!****
Yes, North Carolina’s paternalistic government has actually made things worse for its citizens who now have no option for short-term loans except unregulated internet lenders. It is now a Pandora’s box that borrowers face as they have no recourse or support from the state that allows these lenders to do their damage. How foolish to run a regulated, law-abiding industry out of the state only to have it replaced by unscrupulous lenders who can never be held accountable for dishonest practices! A Federal Reserve study confirmed that NC consumers bounced more checks and filed for personal bankruptcy much more often after payday lending left the state. So instead of helping consumers, the nanny government has done just the opposite.
Payday Loan companies are not bad. They do not force anyone to use there serivce. Why don’t people start focusing on the real issues. If you put the payday loan companies out of buisness it will sky rocket unemployment and put thousands of hard working americans out of a job. If the goverment starts having control over how we want to use our money. What’s next……..
It’s the payday system that is the problem – at least in Ohio and Arizona. In Ohio, over 300,000 people are in debt because of the payday system – the interest rates (typically somewhere around 300 or 400% APR) that trap people. What ought to be to be a short term loan turns into long-term debt because one loan leads to another leads to another leads to another.
I’m sorry, but I can’t imagine that anyone would define a debt trap as financial freedom. Supporting Issue 5 in Ohio means capping the interest rate at 28% on these types of loans. We’re talking about a reasonable rate that gives people who need these loans a realistic chance of paying off their debt and moving on with their lives rather then getting trapped in a vicious cycle.
Visit this site to get an idea about Issue 5 could do for Ohio in these tough economic times: http://www.yesonissue5.com
YesonIssue5 you stated >>”In Ohio, over 300,000 people are in debt because of the payday system…. ” What ought to be to be a short term loan turns into long-term debt because one loan leads to another leads to another leads to another.”
(1)Please explain your statement about how one loan leads to another leads to another? (Rollover loans are illegal in Ohio)
(2)And can you state what source or reference you are quoting about 300,000 people in debt b/c of the pday system? I’ve asked you repeatedly to state your source on other boards, but you never answer. Makes me believe you are merely making it up and don’t have any credible data to provide.
Vote NO on issue 5 in OHIO!! Check out the following link for the truth about 5
http://ohioans4financialfreedom.com
It’s not a fed study, for the record.
http://www.responsiblelending.org/issues/payday/briefs/crl-critique-of-payday-holiday-how-households-fare-after-payday-credit-bans.html
Well, I guess this string of comments (save for Adam’s) provides yet more compelling evidence as to the amount of money the payday sharks are willing to pay to hire hacks who have the time to comment on blogs in North Carolina.
It’s a study conducted by the Federal Reserve Bank
NO on 5 in Ohio!!
Rob,
So what’s your connection to the issue? Why are you on this blog? And why do you assume that anyone who is in favor of payday is being paid for it? I’m sure the anti-payday voices here are on someone’s payroll and not just blogging for fun.
“Here are some details of Fifth Third banks’s payday lending “alternative.”
TERMS:
? Credit limit is based on total of monthly direct deposits (maximum of $500 or half of total monthly direct deposits-whichever is less).
? Fee is $1 per $10 borrowed
The APR varies greatly based on the loan term, ranging anywhere from 3,650% to 104% APR.”
WHAT?????!!! So now banks are allowed to offer a product that charges MORE than PD loans?? WHY IS THAT OK? 3650 PERCENT? Are you kidding me??? How insane. WOW– this is surely a wonderful alternative to a PD loan— UHHHH NOT SO MUCH!!
Umm, Bill Faith and COHHIO– where’s the outrage about this?? Where’s the push to eliminate these types of loans and ridiculous APRs? Where’s the proposal to stop this kind of greed?
Rather ironic but no one seems to really care about how Banks conduct business and what they charge. How incredibly sad for Ohio and it’s citizens…..