Ohio deals blow to payday lenders
Shops may have to diversify services after Issue 5’s defeatBy Patrick Cooley, pcooley@mariettatimes.com
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Fact Box
Issue 5 at a glance
Caps the annual interest rate payday lenders can charge at 28 percent.
Lowers the limit a payday lender can loan at $500, when the previous limit was $800.
Votes in Washington County:
Yes (to uphold the law): 19,183.
No: 9,077.
Ohio voters roundly approved a law which could mean the end of the state's payday lending industry.
Issue 5 affirms placing the annual cap on lending rates at 28 percent, whereas the previous cap has been 319 percent. The law affirmed by Ohio voters Tuesday caps the maximum loan at $500, instead of the previous high of $800.
Statewide, 64 percent of voters favored keeping the law that limits interest rates. The law was passed by the Legislature and signed by Gov. Ted Strickland earlier this year. Washington County voted overwhelmingly in favor of the law, with 19,183, or 68.8 percent, in favor, and 9,077, or 31.2 percent, against.
John Moorhead, president of Zanesville-based Urgent Cash, which has a location on Acme Street in Marietta, called the passage of the law "the end of the payday lending industry (in Ohio) as we know it."
"Let me give you the facts," he said. "It costs us $13.86 to loan $100. Under the new law, I'll be able to charge $1.07 per $100; that means losing $12.79."
He said the $13.86 comes from the cost of doing business, meaning rent, utilities, insurance and labor costs.
According to Darryl Dever, a Columbus businessman and lobbyist for Ohio's payday lenders, the law could cost the state nearly 6,000 jobs, which was the theme of the election campaign against Issue 5.
He said the 319 percent annual interest rate is a misleading figure and the average loan actually is a two-week transaction with 15 percent interest.
Dennis Harrington, an attorney with Southeastern Ohio Legal Services in Ohio and a vocal opponent of payday lending, said he could not be happier with the voters' decision.
"There comes a time to say 'enough is enough,'" he said. "The interest rate they are charging is just ridiculous. The industry says that no individual actually pays that much, but if you look at the returns on that money, it's predatory."
Harrington said the Marietta branch of Southeastern Ohio Legal Services deals with 15 to 20 cases of people in the payday lending cycle every year.
Washington County has 19 payday lender storefronts, down two from the number operating in 2006. The county is second in the state with 3.25 lenders per 10,000 residents.
Linda Cook, a senior staff attorney at Ohio State Legal Services and a former member of the Ohio Coalition for Responsible Lending, said payday lending shops that diversify should be able to stay in business.
"It's the monolithic shops that only offer payday lending that are in trouble," she said. "The industry spent between $15 million and $18 million in the campaign (against Issue 5); that gives you an idea of how profitable it was."
Cook said there are no numbers on how many cases Ohio State Legal Services deals with involving payday lending, but the payday loans are often parts of other cases.
"There are people who can't pay their mortgage or can't make their car payments," she said. "People were paying these loans and not paying other loans."
Cook said in regard to job losses, payday lending employees have historically had very high job turnover.
"These are not very secure jobs," she said. "It's never great to lose jobs, but it's preferable to have jobs that add some value to the community."
Mary Jackson, senior vice president of government relations for Texas-based Cash America, said her company will try to continue doing business in Ohio by offering short-term loans and pawn loans, which require some kind of collateral by the person taking out the loan.
Both of these, she said, have a very low interest rate, but Ohio law allows the company to charge a small fee.
"Because of the lower pricing on the credit, we won't be as generous with the underwriting criteria," Jackson said. "People who would typically qualify for (a payday loan) might not qualify for these other types of loans."
She said 43 of the 139 Cash America stores in Ohio will be closing, but it has not been determined which stores which will remain open.
Kelly Moore, a Marietta resident, said she has used payday loans for a variety of reasons, including getting needed money when she had to replace a flat tire and was still days away from her next paycheck.
"Should it not be our right to choose our lender?" she said. "I think Ohioans are smart enough to make their own financial decisions."
Washington County Commissioner Sam Cook said the industry takes advantage of Ohioans.
"It's basically legalized loan-sharking," he said.
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CaraLowe
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04-15-09 5:55 PM
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By attacking the <a href="***********actionpaydayloans****">Payday Loan</a> companies themselves as a major source of the problems is removes the focus from where it should be. People need help, and these short term loans are often the only help that is available. Without the money from these loans, how are these people going to manage to survive?
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ElvisD
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02-02-09 3:21 AM
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Many people have been criticizing payday loans, whether they are predatory and that they are made to steal money from families. We all know that consumers have their own will whether to believe it or not, they are always willing to listen to both sides of the story. Many people finds payday loans as a huge help in their times of need. Many are beginning to see the truth about payday loans and that is for you to find out. *******personalmoneystore****/moneyblog/2009/01/26/ohio-payday-loan-ignorance-2/
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GRNhornet
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11-09-08 3:07 PM
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Tele, I officially apologize for all the McD's and fruitbashket stuff. Judging from your last post I truely believe you are, or at least can be level headed. But I wasn't just referencing to CNN, there are a few more out there. Let's not ruin the moment by going any further. Now get my fries....just kidding!!!Have a great week!
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telefonica
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11-07-08 9:12 AM
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Actually if your referring to CNN, I don't watch that either but good thing of you to assume. I don't care about how much CO2 planes put out. I'll agree with you on one thing, this global warming thing is about as false as they come. Much like how people think were going to have hydrogen cars. Ah, dreamers.
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GRNhornet
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11-07-08 9:02 AM
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Tele, you know I'm just kidding about the McD's and pie thing. Heck I'm not even a big pie fan, but I will take my value meal super-sized. Hate to leave you in such a state of confusion, like that's no different than any other day, but I've got a plane to catch. Be home soon & we'll catch up. Take a nap, rest up, & for the love of Pete get your act together! Oh by the way I'll will be thinking about you, and the rest of you bark humpers when that big MD-80 screams down the runway filling the air with evil Co2. If you listen really close you can hear Mother Earth crying. Good Day!
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GRNhornet
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11-07-08 8:57 AM
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Tele, another ramble like that & I'm going to have to add you to the Telefruitbasket club. And as for your statement regardsing Fox News, you've got to be kidding....Right? For the love of be a realist I'm sure you've see major media coverage over the years. Certainly Fox has more of a right leaning opionion, but if you can't admit "your" media was/is so far in the bag for Pres. eledt Obama it is sad. When commentors say they get tingly feelings up their legs when Barry-O spoke is just beyond the pail. But I continue to forget I live in reality and well I'm not sure where you and the rest of your marry bad of sheep live. Just promise to never go away, the inteligent have to keep a watchful eye on you crack-pots. Now get me my pie!
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telefonica
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11-07-08 8:44 AM
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I'll admit, I don't know everything about everything, but I know something about everything. The thing is, just because I prove things with facts (ie, previous posts about people not understanding the true definition of socialism, the reason the DOW was down on election day) and not pull things out of my a*s or from things people have heard on FOX News. The worst thing is that, alot of people here really put the FOX in Fox News. There sure isn't any "news" on that channel.
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telefonica
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11-07-08 12:19 AM
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"I haven't received your answer...Cherry or Apple pie!"--GRNhornet-- I guess make it Apple pie since obviously your now serving me or you wouldn't be waiting for my answer. Doesn't the server ask Cherry or Apple Pie? Guess you "spun" this one around on yourself didn't you?
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Johanna
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11-06-08 10:25 PM
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HR and Johnny...what do you know about "ursury" law? Lily said that "we" have.."ursury laws"..she gave you a hint....seek and you may find. I'm just hoping that she goes away!!!
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GRNhornet
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11-06-08 7:47 PM
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Tele, I haven't received your answer...Cherry or Apple pie! I'll see you in the drive thru. Unless you quit another job. XO
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GRNhornet
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11-06-08 7:45 PM
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In an effort to clear up the mess that PayDay Lenders and the people who can't operate with in a budget I should just post my address. I figure it will at least save me the cost of a stamp in sending my money to 1600 Penn. Ave. And for you LilyOfruitbasket, that happens to be the address of the White House. How are those 1,000 kittys doing?
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NoelTyler
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11-06-08 6:22 PM
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By the way, Lily: the election is OVER. Let's stick to comments on the articles ONLY.
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NoelTyler
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11-06-08 6:22 PM
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Why is Lily back? No one cares what you have to say. You're preaching to the wrong group. Please leave. The Times' blog is for readers who LIKE America, and everything it stands for. PLEASE just go away. Your propaganda novels take up too much room. Go stir the pot somewhere else.
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telefonica
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11-06-08 6:13 PM
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The paper was printed this morning. Must be Obama's fault.
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LilyOValley
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11-06-08 5:08 PM
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In other words, I changed my mind. So what... Now then, JR why don't you and HR get together at HRs place to decide what articles you will cut and paste from the NYPost or some other absurd website such as 'Junk Science' as 'proof' for your next false claim? I think I will go be happy and leave this space to you (for a while)!
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LilyOValley
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11-06-08 4:59 PM
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Hey JR, I didn' say I was perfect, merely nearly so.
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LilyOValley
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11-06-08 4:58 PM
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for a while...
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JohnnyRingo
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11-06-08 4:54 PM
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The key part is: "Well folks, I have decided that this will be my last post."
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JohnnyRingo
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11-06-08 4:53 PM
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Hey Lily…… I can tell by your pages of posts in the last couple days that you forgot about this post right before the election. Thought I might remind you again…. “””Liliovalley: Quote: "Ah, Marietta is everything I remember it to be." "Well folks, I have decided that this will be my last post. I hope you all vote for what yo believe to be right, as I am sure you will." etc, etc, and more etc............ “”” She definitely sounds like a politician……………
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Harleyrider
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11-06-08 4:52 PM
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LilyOValley, your name and the mention of "realities of the world" is wildly amusing.
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Harleyrider
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11-06-08 4:43 PM
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LilyOValley/ Melba, many times you denied any involvement with the campaign. I believe you put it that you were "merely an ordinary citizen that was expressing her viewpoint." Me thinks thou doth protest too much.
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JohnnyRingo
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11-06-08 4:34 PM
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Lily = ACORN!!! ACORN = Lily!!!
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JohnnyRingo
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11-06-08 4:34 PM
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We won't need 'payday lenders' next year. The Messiah will be in power and everything will be taken care of by the government. Don't you love Socialism? I do!!!
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LilyOValley
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11-06-08 4:25 PM
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I would challenge HR to find one single post where I denied involvement with the Obama campaign in the role that I played: unpaid volunteer. Moreover that I was an unpaid voluteer was something I freely admitted. I mentioned helping register people to vote, talking to voters, and so on in posts long ago. Most political campaigns have unpaid volunteers. The things I described are what such people do. There was no misrepresentation on my part. But I was barraged with remarks here using phrases such as: 'how much are they paying you to...' ? I was called a liar when I denied being paid and it was suggested that my thoughts, somehow, were not my own. As an unpaid volunteer, I am free to say exactly what I think. That is exactly what I did. What's the real problem here? Some readers simply cannot accept my remarks at face value. The problem is theirs. How sad.
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Harleyrider
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11-06-08 4:11 PM
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ohioankev, exactly. The issue should not be what they charge for their service but the ability of the borrower to pay. Seems I remember hearing about how that situation caused problems somewhere. hmmmm where could it have been? Something like Freddie on Aunt Fannie maybe.
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