A followup on an earlier post on Dollartamer regarding Issue 5. It’s still early in the evening, but Ohio has overwhelmingly voted for Issue 5. This will cap payday loans to 28% APR and effectively run the payday loan industry out of Ohio.
If you want more details on the bill, check out our earlier post.
Posted under News
Written by Matt on November 4, 2008
Woohoo! That’s wonderful
The people that think its wonderful have not studied the issue. Countless jobs will be lost affecting the economy in a negative way. 93% of payday borrowers use the system wisely and enjoy it while 7% don’t and give the industry a bad name. The APR is all the anti lenders see and they don’t even understand that since the loans are SHORT TERM the actual paid interest on a loan is miniscule in comparison.
Imagine that, a loan shark saying we didn’t study the issue!
The worst estimate I’ve seen is 6000 jobs (which most are part-time and probably in the $9-10/hr range at best). That’s hardly a dent in the economy given the real job issues Ohio is facing.
A credit card loan is a short term loan, but even in default it isn’t anywhere near the rates of a payday loan. Payday loans take advantage of those who are either too unqualified to get a loan (in which case getting the loan will make their financial situation worse, not better) or too uneducated (in which case they should be shown the math to see how bad a deal a payday loan is) to know they have much better options.
There were tons of “No on 5″ ads (and I don’t recall seeing a single “Yes on 5″ ad). Somehow Ohio voted 63% to 37% in favor of this bill. The case must be pretty weak to get that sort of response from the electorate after all the TV time the payday loan industry had.
This is an overwhelming victory for Ohio’s consumers. Over 3 million Ohio voters strongly repudiated 10 years of predatory payday lending and asked for a return to fair and responsible lending! This is a good thing for Ohio’s families, communities and economy!