Consumer Protection Blog

Ally of Ohio’s Payday Lenders Seeks to Blow Hole in State Budget

Free Fallin — Tue, 18 Nov 2008 15:57:48 EST

An Ally of Ohio's Payday Lenders Seeks to Blow Hole in State Budget

The Ohio Grocers' Association, one of the very few supporters of our state's predatory payday lenders, is seeking elimination of the Commercial Activity Tax (CAT). The CAT tax is a reasonable low tax that is applied to a large variety of businesses in size and scope. OGA, which as you might recall is headed by the father of Check 'N Go lobbyist and former candidate for State Representative John Rabenbold, is aiming to exempt grocers, wholesalers and producers from paying the CAT tax. Such an exemption would dramatically impact state revenues, leading to the disappearance of approximately $188 million in annual revenue, plus a likely $355 million in additional revenue that has already been collected from businesses who pay the CAT tax.

Consider this: schools and local governments receive the lion share of proceeds and additional proceeds go into the state's General Revenue Fund. Imagine a half a billion-dollar shortfall projection in advance of next year's budget deliberations! There will be fewer and fewer dollars available for lifting the cap on the housing trust fund (benefiting affordable housing), rolling back property taxes for low-income housing tax credit (LIHTC) property owners and a myriad of other social services that are necessary in the midst of a serious economic downturn.

This is NOT a tax on food, but a very limited tax on the gross receipts of some of Ohio's largest businesses. If the Supreme Court fails to see that the CAT tax is fully constitutional, the decision will amount to a slippery slope whereby certain businesses will seek special exemptions so that they don't have to pay their fair share.

With the Wall Street crisis, the potential bankruptcy of General Motors, recent jobs losses at DHL and the less than rosy projections from Ohio's budget officials, now is not the time to tack on an additional shortfall of over $500 million! The CAT tax is working and should continue to work. Grocers, wholesalers and producers should pay their fair share of tax revenues. State services and programs that benefit low and moderate income Ohioans should not be sacrificed for the purposes of providing a tax holiday for corporate interests.

A broad coalition of business interests believe that the CAT tax is working as intended and support a fair tax policy. The coalition includes the Ohio Manufacturers' Association, the Ohio State Medical Association, the Ohio Society of Certified Public Accountants, the Ohio Dental Association, the Ohio Chemistry Technology Council, the Ohio State Bar Association and the Ohio Business Roundtable.

If they can get behind the CAT tax, shouldn't we? It's important that the CAT tax be maintained to ensure that important social services programs aren't on the chopping block in January! Let's hope the Ohio Supreme Court does the right thing and upholds the CAT tax.

Call your State Senator and ask them to oppose House Bill 367!

Free Fallin — Thu, 13 Nov 2008 10:09:11 EST

Call your State Senator and ask them to oppose House Bill 367!

House Bill 367 is a windfall for debt settlement service companies, allowing them to charge significant fees, often as high as 20% of the total value of debt for services that consumers could either accomplish on their own or receive for free from one of our state's many not-for-profit consumer credit counseling agencies.

One of the more egregious provisions in HB 367 actually moves mortgage rescue scam operators into the debt settlement portion of the law, allowing such operators to capitalize on the misfortunes of consumers already faced with the prospect and likelihood of losing their home. An amendment to the bill should ensure that only "unsecured debt" is included in the definition of debt settlement services. This will prevent debt settlement companies from engaging in mortgage rescue plans, thus collecting thousands of dollars in fees from already financially strapped consumers.

In a letter Consumer Credit Counseling Service of Central Ohio, the notes that "companies involved in debt settlement are not community based or mission driven, their ethical and industry standards are voluntary, and there is no oversight through an accreditation body like that which exists for credit counseling agencies." Additionally, unlike debt management programs like those offered by CCCS agencies, debt settlement involves the "charging off" of a certain portion of a consumer's debt which can negatively impact an individuals credit score.

HB 367 lacks significant consumer protections and ultimately results in a free pass to gouge struggling Ohio consumers who are the least able to afford a 20% "fee cap." Individuals seeking to alleviate their debt burden shouldn't be forced to contend with a potential fee of $4,000 if they hold $20,000 in debt.

Plain Dealer Columnist Tom Suddes took the bill to task in a Sunday column:

"The Ohio General Assembly might prove again what a judge ruled long ago "No man's life, liberty or property are safe while the legislature is in session."

"The biggest issue is that (the bill and its fees) would apply to mortgage 'rescue' operators," a Rogers aide said. The debt-settlement lobby countered in a response filed with Rogers that they had "no objection" to excluding mortgage debt from the bill. A Columbus lobbyist for the companies, Richard A. Oxender, said Friday they don't deal with "secured" debt, such as mortgages and car loans, but credit-card debt."

"Even if the Senate explicitly excluded secured debt from the bill, Rogers' office "probably" still will oppose the bill. In correspondence with Senate aides, Oxender countered, "It is apparent . . . the AG's office does not truly understand how debt settlement works." He added Friday, "We want to make sure people operate legally, so we want regulation."

"But also questioning Amended House Bill 367 are Gov. Ted Strickland and Attorney General-elect Richard Cordray, now state treasurer. Cordray told the committee in a letter that fees the bill allows would let debt-settlers charge an Ohioan with $20,000 in debt a $4,000 fee. And if the consumer tried to cancel, the bill would let settlers keep half the fee (in this case, $2,000) "regardless of whether . . . services were rendered." Oxender said the companies are "willing to look at" the fee question."

To read the rest of the article, please click here:
http://www.dispatchpolitics.com/live/content/editorials/stories/2008/11/09/sudd09.ART_ART_11-09-08_H5_VRBQT1V.html?type=rss&cat=&sid=101

Call your Senator today and ask them to oppose House Bill 367!
http://www.senate.state.oh.us/senators/

Stay tuned - apparently The Association of Settlement Companies (TASC) has the same address as the Community Financial Services Association (CFSA), the payday-lending lobby. It's important that we keep an eye on this bill, which is being heard in the Senate Committee on Finance and Financial Institutions now. The bill was railroaded through the House 93-0 when no one was paying attention and threatens to allow another industry to take advantage of Ohio consumers who are burdened by overwhelming debt!

Payday Lender, Redeemed? Not Quite!

Free Fallin — Wed, 12 Nov 2008 14:30:21 EST

Unfortunately the New York Times ran a fluff piece about payday lending in their Sunday magazine this week. The article, entitled "Check Cashers, Redeemed," profiles Tom Nix of Nix Check Cashing who owns a large chain of check cashing stores and payday loan shops in Southern California.

"There are two big problems with businesses like Nix Check Cashing. One is that the fees are high. Most cashers pocket between 2 and 4 percent of each check's value, which a recent Brookings Institution study calculated could add up to $40,000 in fees over a customer's working life. And their version of credit, a two- or four-week cash advance against a postdated check, known as a payday loan, is even pricier -- about 30 times the annualized interest rate of a typical credit card." If someone pays nearly $40k for check cashing alone, imagine how many tens of thousands of dollars in fees over a lifetime a payday loan borrower might pay!

Nix acknowledges that the downturn in the economy has allowed payday lenders to capitalize on the misfortunes of struggling workers: "Now that the economy has turned ugly, these poor and blue-collar customers are the hardest-squeezed. Payday loans are up, Nix told me when I spoke to him recently, and check-cashing revenue is down."

The article author, Douglas McGray of the New America Foundation, suggests that because check cashers and payday lenders happen to disclose interest rates and fees to borrowers, that their product is fair and transparent.

"The first thing you notice when you walk in the door at Nix is a list of products, services and prices, a bit like a fast-food menu. Some of the prices are quite high, but the charges are neither confusing nor deceptive. "They're going to charge you $13, is that O.K.?" a cashier -- young, Latina, long blond hair, long pink nails -- asked as a bulky, middle-aged guy handed over a stack of cash to send via Moneygram."

"Even the payday loans are transparent. "Your max is $150, so make it out for $172.50," the cashier Joseph told a stocky black woman in a baseball cap, standing at the counter with an open checkbook. (Unlike check-cashing customers, payday borrowers are by necessity bank customers -- they have to write a postdated check to get a loan.) The woman was paying a lot -- $22.50 to borrow $150 for just two weeks. But there were no surprises, no hidden fees."

Nix has taken up what is coined "social marketing" by hiring folks from the neighborhood to work at the payday loan shops, hoping that word of mouth will bring additional business through their doors:

"But there are less-obvious factors too. Nix hires from the neighborhood and pays well enough that cashiers stick around. Word spreads, and in Watts or Highland Park or Pacoima, that reputation often carries more weight than some bank ad on a bus stop. "It's social marketing 101," says Hopkins, the consultant."

Nix later says that he viewed payday lending in a negative light, but that didn't deter him from entering the business: "In the late 1980s, when a few check cashers started to accept postdated personal checks and advance cash for a fee, Nix thought it was a sleazy scheme. He thought so even after California legalized the practice in 1997. "I didn't want to be a loan shark," he told me. "But the reality is, customers wanted it."

McGray gives Nix credit, apparently, for lowering interest rates on payday loans from 468% APR to 391% APR. "Kinecta's executives decided to keep the payday loan and change the terms. Starting with three stores in the spring, and eventually across the entire chain, Nix is increasing the maximum loan from $255 to $400. They are dropping the fee from 18 percent ($45 for a two-week $255 loan) to 15 percent ($60 for a two-week $400 loan). And they will rebate a third more ($20, in the case of a $400 loan) into a savings account, after six months, if you pay your loans back and don't bounce any checks. People get payday loans because they have no savings, Lagomarsino explained. After six months, heavy payday borrowers will accumulate a small balance. Enough, she and Nix say they hope, to convince them they can afford to save more. Later, they say, they intend to drop fees further for borrowers who always pay back on time." Even if you account for the $20 put into a savings account, the interest rates on Nix's payday loans are still upwards of 260% APR!

391% APR and 260% APR don't amount to what the payday lending industry calls "financial freedom" and they aren't fair or reasonable interest rates. Thankfully, Ohioans didn't believe the industry and voted yes on issue 5 to lower rates to 28% APR. Let's hope that the State of California considers limiting the practice of predatory payday lending as well.

To read the New York Times magazine article, please click here:
http://www.nytimes.com/2008/11/09/magazine/09nix-t.html?_r=1&ei=5070&emc=eta1&oref=slogin

Keep an eye on Ohio's payday lenders!

Free Fallin — Wed, 12 Nov 2008 13:08:24 EST

Memo to Ohio consumers: Please keep an eye on Ohio's payday lenders!

Following the passage of statewide ballot Issue 5, Ohio's payday lenders are looking at their options. Throughout the campaign season the industry lobby repeatedly suggested that a 28% APR interest rate cap meant the doom of the industry as a whole and the loss of 6,000 jobs. Thus far, such fears have not materialized.

First, much of the industry is already trying to get around the intent of the original legislation, House Bill 545, by charging an origination fee of $15 on what they are calling "micro loans" and then charging the additional 28% interest. Some lenders are now charging $16.23 for a $100 loan, which actually exceeds the 391% APR interest rate that House Bill 545 sought to end.

According to an article in today's Canton Repository, payday lenders are finding some other avenues by which to make profits. In addition to pushing $100 loans, they are "focusing on more services such as pawn brokering and gold buying, and some are applying for licenses under other Ohio loan laws."

"Whenever states reject payday lenders, they try to find other ways to keep trapped customers coming back to their stores to keep generating the same fee income off of them," said Uriah King, policy associate for the Center for Responsible Lending that lobbies against payday lending."

You can view the rest of the article here: http://www.cantonrep.com/index.php?Category=13&ID=440899&r=9&subCategoryID=

Given the track record of Ohio's payday lenders, from their purchasing of an exemption from our state's usury laws from the Ohio General Assembly in 1996 to their unapologetic business plan to trap low-income and desperate borrowers in debt, it's imperative that no one take their eyes off of what the payday lenders are up to.

Ohio's voters strongly repudiated over a decade of predatory payday lending by a margin of 64% to 36%. Consumer advocates and regulatory agencies like the Ohio Department of Commerce and the Attorney General's Office have a mandate to ensure that Ohio's consumers are protected from the abuses of the payday lending industry.

So, keep your eye on Ohio's payday lenders! If you hear about the industry or individual storefronts trying to skirt House Bill 545 or learn about the development of new predatory products, please alert the Ohio Attorney General's office at 877-244-6446 or call the payday lending hotline at 1-866-966-8727!

Ohio Payday Lenders Open for Business at 28% APR, Already Skirting Law

Free Fallin — Mon, 10 Nov 2008 14:03:51 EST

Ohio Payday Lenders Open for Business at 28% APR, Already Skirting Law

Remember all those advertisements about Issue 5 being the "job killing issue" and the repeated talking points about the payday lending industry's inability to continue at 28% APR? While some stores have announced that they are shuttering their doors, many are keeping their operations intact and open. But borrowers beware - they've got some tricks up their sleeves!

Check Into Cash, based in Cleveland, Tennessee intends for its 92 Ohio stores to "conform" to the new law and alter its business practices to accommodate 28% APR.

Under Ohio law, Check Into Cash can offer what are called microloans that charge an origination fee.

"Judy Powers, director of communications for Check Into Cash in Cleveland, Tenn., said Check Into Cash has started making the microloans in Ohio, charging a documentation fee on loans that remain at the new interest rate cap of 28 percent."

"We're really disappointed in the vote, but we are going to work hard to continue to provide a needed service," she said."

"Under the new type of loans, borrowers will pay a loan origination fee of $15 on loans up to $450 and a $30 fee on loans up to $600. Check Into Cash stores also provide some check-cashing services and sell preloaded debit cards, Ms. Powers said."

Note: On a $100 loan, they'll charge $116.25 (higher than 391% APR and on a $300 loan, they'll only be able to charge $318. So, which loan amount do you think they'll be pushing? The $100 loan!

You can read about Check Into Cash and their operations here: http://www.tradingmarkets.com/.site/news/Stock%20News/2007132/

Additionally, according to Business Week, payday lender Cash America is only closing one-third of its nearly 130 Ohio storefronts. Read the Business Week piece here: http://www.businessweek.com/ap/financialnews/D948RR7O0.htm

These numbers serve to counter many of the industry's statements regarding job loss and profitability at 28% APR interest rates. It appears that some lenders will conform to the law, offer a new, fair and affordable product to their consumers, but many may try to skirt Ohio's new law by pushing $100 loans where their profits can be maximized.

Ohio voters repudiated predatory lending and asked for fair lending. Let's hope the industry heeds that call!

Ohioans strongly repudiate predatory payday lending!

Free Fallin — Thu, 06 Nov 2008 12:02:50 EST

Ohioans strongly repudiate predatory payday lending by voting yes on issue 5!

Ohio's consumers won an overwhelming victory on Tuesday when Issue 5 passed by a significant margin. Over 3 million Ohioans voted YES on Issue 5 to lower interest rates on payday loans from 391% APR to 28% APR. Issue 5 won in 87 out of 88 counties, Adams County in Southeast Ohio being the only county to vote 'no' on Issue 5 by approximately 339 votes.

Ohioans unquestionably saw through the lies and deceptive advertisement of the payday lenders and their nearly $20 million campaign. Voters strongly repudiated over 10 years of predatory payday lending and asked for a return to fair and reasonable small loan lending.

You can see the Issue 5 election results on the Ohio Secretary of State's website here: http://vote.sos.state.oh.us/pls/enrpublic/f?p=130:9:0

The Cleveland Plain Dealer's editorial board summed up Ohio consumers' victory in this fashion: "Payday lenders lose big in Ohio - and deservedly so."

"It didn't matter how many millions of dollars payday lenders spent in their desperate attempt to continue charging 391 percent interest rates on short-term loans, Ohioans weren't about to be fooled by their deceitful campaign."

"Voters Tuesday dealt the payday-lending industry one of the most humiliating election defeats imaginable, overwhelmingly approving a measure (Issue 5) capping APR interest rates at 28 percent."

"The lenders made a pathetic attempt to convince voters that opposing Issue 5 would save jobs. But Issue 5 was never about jobs. It was always about fairness, about preventing the payday lenders from preying on Ohio's most vulnerable citizens. Ohioans understood that. The payday lenders and their high-priced consultants didn't."

You can read the Cleveland Plain Dealer editorial here:
http://blog.cleveland.com/pdopinion/2008/11/payday_lenders_lose_big_in_ohi.html

The passage of Issue 5 means the end of more than a decade of predatory lending, the end of hundreds of thousands of Ohioans falling into the debt trap and the start of a new era of fair and reasonable small loan lending that seeks to build wealth for Ohio consumers!

Thank you to Ohio voters, Issue 5 supporters and Issue 5 coalition members! This victory belongs to all of you!

http://www.yesonissue5.com

Payday Lenders Up to No Good in Ohio; Vote Yes on Issue 5!

Free Fallin — Tue, 04 Nov 2008 14:15:18 EST

"Payday Lenders Aggressively Targeting Ohio Voters"

The Principal at Britton Elementary School in Columbus, Ohio has reported that representatives and/or employees of the payday lending industry/No on Issue 5 campaign are being particularly aggressive towards voters in the parking lot near the entrance to the buildings.

There are additional reports that this is occurring in an array of polling locations throughout the state of Ohio. The Franklin County Board of Elections has reported receiving numerous complaints about polling places in the county where No on Issue 5 campaign representatives appear to be stopping at nothing to continue charging 391% APR interest!

If you witness any of these activities, please call the Franklin County Board of Elections at 614-462-3100 to report them. If you witness any serious intimidation tactics on the part of the payday lenders, please call 1-866-OUR VOTE to ensure that your right to vote is protected!

Remember that the payday lending industry has spent nearly $20 million to use Ohio's citizen referendum process to reverse one of the nation's best consumer protection laws. The industry lobby (Ohioans for Financial Freedom) lied to voters to get Issue 5 on the ballot and they've subsequently spent millions of dollars on deceptive and misleading advertisements on TV. Now it appears they are out in full force on Election Day trying to intimidate voters into voting 'no' on Issue 5!

Don't let the payday lenders fool you or intimidate you! Vote YES on Issue 5!

If you have trouble voting, visit: http://www.866ourvote.org

Vote Yes on Ohio Issue 5 Today! Lower Interest Rates on Payday Loans from 391% APR to 28% APR!

Free Fallin — Tue, 04 Nov 2008 09:54:31 EST

Election Day is here! Vote YES on ISSUE 5 today!

Here are 5 reasons to vote yes on issue 5:

1. Voting Yes on 5 lowers interest rates on payday loans from 391% to 28% APR.

2. Voting Yes on 5 ensures that loans will still be available for people who need them, but the interest rate is reduced so that it is comparable to the rates charged by credit cards.

3. Voting Yes on 5 prevents Ohioans from slipping into a never-ending cycle of debt.

4. Voting Yes on 5 extends the same payday loan protections to all Ohioans that the federal government provides to military personnel and their families.

5. Voting Yes on 5 approves the new laws endorsed by Governor Strickland and the Republican and Democratic leaders of the Ohio Legislature. Our leaders believe the state has a fundamental obligation to protect Ohioans from excessive interest rates and defective financial products.

For further information about Issue 5, please visit: http://www.yesonissue5.com

Cut and paste this into an email to your family, friends or colleagues who haven't voted yet today!

Michigan Survey Highlights Financial Destruction of Payday Loans, Urges Yes on Ohio Issue 5!

Free Fallin — Mon, 03 Nov 2008 17:36:38 EST

Michigan Survey Highlights Financial Destruction of Payday Loans, Study Urges Yes on Ohio Issue 5!

Today, a study was released by Michigan University Professor Michael Barr highlighting the negative impact that payday lending has on borrowers.

"While the Michigan survey does not establish a causal relationship, it finds that 11 percent of payday borrowers experienced bankruptcies in the preceding year, while only 4 percent of non-borrowers did so. Twelve percent of borrowers faced eviction; that rate was 6 percent for non-borrowers. Over a quarter (26%) of payday borrowers had their utilities shut off for non-payment in the preceding year, while only 9 percent of non-payday borrowers experienced this hardship."

"Dr. Barr presented the survey results to the Federal Trade Commission last Thursday, in a presentation concluding that alternative financial services like payday lending and other high-cost loans are "not well-designed to serve low- and moderate-income households." Barr said excluding lower-income households from lower-cost systems leads to economic inefficiency, is costly for low-income households, and "promotes dis-saving." The survey was a random, stratified sample of 1003 Detroit households."

Download File

Released on the eve of a state initiative in Arizona and a referendum in Ohio, the report stresses the importance of voters being clear about what they are voting on:

"In Ohio, voters must vote "Yes" on Issue 5 to end 391 percent interest rates in that state. In Arizona, because of the wording of the ballot measure, voters must vote "No" on Proposition 200, or payday lenders will have a voter-protected law legalizing their 391 percent interest rates for good. In both states, the industry is spending millions of dollars trying to persuade citizens that voting their way will reform the industry."

To read the article about the study entitled "New University of Michigan Survey Finds Payday Borrowers Suffering Financial Hardships", please click here:
http://news.yahoo.com/s/usnw/20081103/pl_usnw/new_university_of_michigan_survey_finds_payday_borrowers_suffering_financial_hardships

Vote YES on Issue 5!

Miracles DO Happen: Pastor Rod Parsely Endorses YES on Ohio Issue 5!

Free Fallin — Mon, 03 Nov 2008 17:01:22 EST

Apparently miracles do happen! In a press release today, Pastor Rod Parsely and the Center for Moral Clarity endorsed a yes vote on Ohio issue 5!

Parsely and the Center join a myriad of other individuals, churches and faith based organizations that already support issue 5, including: BREAD, the Catholic Conference of Ohio, the Greater Cleveland Board of Rabbis, the Interdenominational Ministerial Alliance of Youngstown, John Edgar, of the United Methodist Church for All People, Jewish Family Services of Cincinnati, the Ohio Conference of Seventh-day Adventists, the Ohio Council of Churches, the Ohio Roundtable, Sojourners, Tim Ahrens of the First Congregational Church of the United Church of Christ, the Vineyard Church, and the West Ohio Conference and East Ohio Conference of the United Methodist Church.

"The interests behind both of these important issues are deceiving voters about their true purposes by calling them economic issues, rather than the moral issues they are," Pastor Parsley said. "Government already makes it so difficult for the poor among us to improve their economic lot. I'm convinced that approving short-term loan rates of nearly 400 percent and welcoming a casino to this state would work against the very people who most need a helping hand. I am supporting economic justice for our poorest Ohioans with our stances on these issues."

"Issue 5 is an initiated statute that will allow voters to approve or reject House Bill 545, which the General Assembly passed and Gov. Ted Strickland signed earlier this year. Among other reforms, it caps the maximum interest rate a payday-lending store may charge on a short-term loan from an annualized rate of 391 percent to 28 percent. CMC and its activists in Ohio were vocal supporters of the bill's enactment. "A 'Yes' vote on 5 will help prevent the exploitations of our poorest citizens, and give them the chance to escape the cycle of poverty," Parsley said."

To read the release, please click here: http://www.yesonissue5.com/documents/Center%20for%20Moral%20Clarity%20Endorses%20Yes%20on%205.pdf%20

Vote Yes on Issue 5!

Business First of Columbus Endorses Yes on Issue 5!

Free Fallin — Mon, 03 Nov 2008 11:45:48 EST

Business First of Columbus Endorses Yes on Issue 5!

The Yes on 5 Campaign received the endorsement of Columbus's premiere business newspaper, adding to a long list of pro-business organizations, newspapers and politicians that support passage of Issue 5!

"The issue comes down to balancing free enterprise and personal responsibility against public safety and protection for the reckless. While both sides have convincing arguments, we think Issue 5 should be rejected. And in this case, that means voting yes."

"That opinion represents a turnaround from our earlier position that called the rules an unwarranted government intrusion. But times have changed dramatically. The rules outlined under House Bill 545 create a predictable borrowing environment for consumers who deserve every bit of government protection in the wake of the credit-related economic meltdown."

It's clear that Ohioans overwhelmingly believe that in light of the economic crisis caused in large part by unfettered, unregulated greed and reckless lending practices, reasonable limitations on interest rates charged by payday lenders in necessary! Business First's editorial board is no exception!

You can read the Business First editorial here:
http://columbus.bizjournals.com/columbus/stories/2008/11/03/editorial1.html

VOTE YES ON ISSUE 5!

End the Payday Lending Debt Trap for Ohio's Families; Vote YES on Issue 5!

Free Fallin — Sun, 02 Nov 2008 19:45:15 EST

The Plain Dealer's Sheryl Harris Makes One Last Appeal for YES on 5!

In this Sunday's Plain Dealer, columnist Sheryl Harris made on last appeal to Ohio voters to vote yes on issue 5! Harris shared the stories of customers who had been caught in the cycle of payday lending debt that is often far too comment among borrowers.

From the Plain Dealer:

"Charlie, a retiree on a fixed income, went to another store and took out a larger payday loan to try to pay back the first one."

"That debt, though, kept multiplying every time he tried to dig himself out."

"He was juggling four payday loans when he decided to just stop paying - a choice that does not get him off the hook legally."

"The interest rate is what gets you," he said. "That's what makes it hard to pay down."

"That's why Charlie says he's so outraged when he sees the barrage of payday industry ads and the mailings: "They never mention the fact this is about interest rates."

To read the rest of the Plain Dealer article, please click here: http://www.cleveland.com/plaindealer/stories/index.ssf?/base/business-0/1225528518214040.xml&coll=2&thispage=2

The deceptive and misleading ads are still running, many touting the "power to save jobs" or the "big brother" database. The ads don't mention that over 1,100 of Ohio's 1,600 payday lenders have applied for licenses to operate under the new rate cap or that section 3 of House Bill 545, which would be repealed with a 'no' vote, does not include a provision regarding the database they are so afraid of.

On Tuesday, we have the power to step into the voting booth and reject the fear and deception being peddled by the payday lending industry and vote YES to cap interest rates at 28% APR.

VOTE YES on Issue 5!

Don't fall for payday lenders' lies - vote yes on issue 5!

Free Fallin — Sun, 02 Nov 2008 10:41:15 EST

Suddes: Ohioans mustn't fall for payday lenders' stealth campaign

In Sunday's Cleveland Plain Dealer, columnist Thomas Suddes urged Ohioans to stay wise to the payday lenders' largely deceptive campaign by voting YES on Issue 5 on Tuesday.

Suddes takes apart many of the industry's misleading messages that have permeated throughout this campaign season:

"Despite lenders' yowls, a "yes" vote on Issue 5 will not drive jobs out of Ohio. Crain's Cleveland Business, citing Commerce Department statistics, reported that through Oct. 3, "operators of 1,149 payday lending offices in Ohio [had] filed to operate 702 offices as small loan operations and 558 offices as second-mortgage lenders."

"Payday lenders claim they're the only financial alternative some Ohioans have. That's not what one lender, Tennessee-based Check Into Cash Inc., told the SEC when the company planned to sell stock in 1998: "Customers have access to alternative sources of cash to satisfy their short-term financial needs but prefer [Check Into Cash's] simple, convenient, confidential service."

"Lenders weep crocodile tears about a database the 28 percent APR law creates. But the lenders themselves mishandle such data. Cincinnati-based Check 'n Go paid the state of Texas $220,000 in May because Check 'n Go "exposed customers to identify theft by discarding records in easily accessible trash cans" - records such as borrowers' names, addresses, Social Security and driver's license numbers, and checking account information."

Suddes closes with a call for voters to reject the payday lending industry's lies:

And that's why voting "yes" on Tuesday on Issue 5 keeps a 28 percent APR lid on payday loans in Ohio - and tells payday lenders that what their donations couldn't buy in Columbus, their lies can't buy on TV.

Read the rest of the piece, here:
http://www.cleveland.com/news/plaindealer/thomas_suddes/index.ssf?/base/other/1225528292214040.xml&coll=2

Get out and vote and vote YES on Issue 5!

Mansfield-Richfield Chamber of Commerce Endorses YES on 5!

Free Fallin — Wed, 29 Oct 2008 12:58:55 EDT

Today, the Mansfield-Richfield Chamber of Commerce broke with the Ohio Chamber of Commerce on payday lending.

Kevin Nestor, the President of the Mansfield-Richland Area Chamber of Commerce wrote a letter to the Mansfield News Journal, breaking with the Ohio Chamber of Commerce on payday lending. Nestor urges a YES vote on Issue 5.

"Issue 5 asks voters whether the provisions of a new Ohio law that place new restrictions on payday lending should go into effect. These would limit the maximum loan amount to $500, give borrowers at least 30 days to make repayment and cap the annual interest rate at 28 percent."

"If Issue 5 is rejected, the maximum loan amount will remain at $800, there will continue to be no minimum repayment period and payday lenders can continue to charge fees (typically $15 per $100 borrowed for a two-week period) equivalent to a yearly interest rate of 390 percent. While there is no stronger supporter of the free enterprise system than the chamber of commerce, it is often those who can least afford such loans who seek them. Yes, many are higher risk borrowers, but fees this high are too steep a price for anyone to pay, let alone those who can least afford them. As board president, I urge your yes vote on Issue 5."

You can read the rest of Kevin Nestor's letter to the Mansfield News Journal here:
http://www.mansfieldnewsjournal.com/article/20081029/OPINION03/810290318

The Dayton Daily News' blistering piece about the Ohio Chamber's endorsement of predatory lending that ran back in September:

"The chamber's support of an industry that is plainly taking advantage of desperate people is embarrassing. What level of abuse does it take for the organization to be offended at how a business makes a buck?"

"Payday businesses, though they are pervasive in Ohio, are not nearly as powerful as the subprime mortgage lenders that have provoked the national housing crisis and made a weak economy even weaker. But their MO is very much the same: poor people are being targeted and preyed on and being sold a product that all too often leads to financial ruin."

"Businesses need business organizations arguing their side of issues, and speaking out against policies that ask too much of the private sector. But if the chamber expects to be taken seriously, if it wants credibility, then it has to have some capacity to be outraged when consumer and moral outrages are occurring."

"The payday industry gives free enterprise a bad name."

http://www.daytondailynews.com/o/content/oh/story/opinions/editorial/2008/09/02/ddn090208chamberxxeb.html?cxntlid=inform_sr

Let's hope there are a lot more free thinkers on November 4th! Simply because the payday lenders have spent $18 million and have the endorsement of the Ohio Chamber of Commerce, doesn't mean that they are aren't peddling a defective and predatory product!

Lower interest rates on payday loans and end predatory lending in Ohio!

Vote Yes on Issue 5!

Issue 5 Opponents Use Prosperity Doctrine to Justify Predatory Lending

Free Fallin — Tue, 28 Oct 2008 17:18:46 EDT

Issue 5 opponents like COAST, the Ohio Christian Alliance, the Buckeye Institute, State Representative Brinkman, Governor Huckabee, & former gubernatorial candidate Blackwell appear to be using the prosperity gospel as justification for advocating on behalf of predatory lenders.

From the "Gospel of Bling" in Sojourner's magazine:

"The gospel of prosperity: "Greed is good." The "gospel of prosperity" refers to the cultural ideology that suggests that the accumulation of material possessions, wealth, and prosperity are morally neutral goods that are necessary for human happiness. I characterize it as an ideology rather than merely an idea because it functions like a powerful, unconscious force that does not revise its position in the face of counterevidence. For instance, its advocates would not admit that possessing material goods in excess may actually induce unhappiness. As an ideology, its believers insist upon its correctness, deny the legitimacy of other perspectives, and pursue wealth without concern for long-term consequences. Prosperity becomes an intrinsic good and an end in itself."

Organizations like the Coalition Opposed to Additional Spending and Taxes, the Buckeye Institute (Blackwell's employer) and individuals like Representative Tom Brinkman, former Arkansas governor and presidential candidate Mike Huckabee and former GOP gubernatorial candidate Ken Blackwell are extending their belief in the prosperity doctrine to a dangerous new level: by carrying the water for the payday lending industry.

COAST, again, only has 6 individual members who include David Langdon with ties to the Ohio Christian Alliance and Representative Tom Brinkman. COAST is based in Cincinnati and clearly has ties to the Buckeye Institute given that their press releases are immediately placed on the their website. The Buckeye Institute touted research from none other than William Keip (of William Keip Government Solutions) who received $8,400 to perform an economic impact study for the payday lending industry. Representative Tom Brinkman is our good friend who introduced legislation to prohibit the adoption of children by gay parents: http://www.legislature.state.oh.us/bills.cfm?ID=126_HB_515 (sounds like a personal problem). And lo and behold, good 'ol Mike Huckabee has schlepped for the industry by recording a robo call to conservative voters.

Add to the list of God and tax fearing Issue 5 opponents, Bishop Harry Jackson Jr., founder of the High Impact Leadership Coalition (HILC). Bishop Jackson has flown into Ohio from College Park, Maryland to schlep for the payday lending industry in African American churches throughout the state of Ohio. It seems that African American ministers and pastors in Ohio thankfully couldn't be bought by the industry, so they had to hire their own carpetbagger from outside the borders of our state!

COAST today sent out a press release callously attacking homeless advocates suggesting untruthfully that state and federal dollars have been utilized to fight the predatory payday lending industry.

Here is COHHIO's response:

"COAST's comments are insulting - and incorrect. In 2007, the majority of COHHIO's revenue came from non-governmental sources. COHHIO brought in $1.7 million last year, and just $682,000 was state or federal money.

COHHIO's contributions to the YES on Issue 5 campaign came exclusively from emergency reserves that have accumulated over many years. The reserves include money from private foundations, private corporations, private citizens and - recently - an anonymous $45,000 stock donation.

No public money ever goes into the reserves. COHHIO must document how each public dollar is spent and must return any unspent funds."

COAST's efforts smack of desperation on the part of an industry whose efforts to lie to voters have failed miserably. What is consistent among most of these groups and individuals is their willingness to accept money from predatory lenders and then advocate on their behalf.

It's clear the industry will do anything, say anything and buy anyone to hijack Ohio's election. They've stolen enough millions of Ohioans' hard earned dollars and it's time to say YES to payday lending reform!

Vote Yes on Issue 5!

Clinton & Schwarzenegger Support Cap on Payday Loan Interest Rates

Free Fallin — Tue, 28 Oct 2008 15:26:03 EDT

Bipartisan Support: Clinton & Schwarzenegger Support Cap on Payday Loan Interest Rates

Since we're only one week away from the November 4th Election Day, it's time to highlight a Wall Street Journal opinion piece co-written by President Bill Clinton and Governor Arnold Schwarzenegger. The piece ran back in late January and showcases the bipartisan manner in which Ohio's payday lending reform legislation passed and the manner in which it should be supported next Tuesday.

"The American dream is founded on the belief that people who work hard and play by the rules will be able to earn a good living, raise a family in comfort and retire with dignity."

"But that dream is harder to achieve for millions of Americans because they spend too much of their hard-earned money on fees to cash their paychecks or pay off high-priced loans meant to carry them over until they get paid at work."

"Here is one initiative that can unite progressives and conservatives as well as business leaders and community activists: helping the "unbanked" enter the financial mainstream by opening checking and savings accounts, and working collaboratively with financial institutions and community groups to develop and market products that work for this untapped market. This will put money in the pockets of individuals and grow the economy. And it won't cost taxpayers a dime."

"Imagine the economic and social benefits of putting more than $8 billion in the hands of low- and middle-income Americans. That is the amount millions of people now spend each year at check-cashing outlets, payday lenders and pawnshops on basic financial services that most Americans receive for free -- or very little cost -- at their local bank or credit union. Over a lifetime, the average full-time, unbanked worker will spend more than $40,000 just to turn his or her salary into cash."

To read the rest of the Wall Street Journal piece, please click here: http://online.wsj.com/article/SB120113610711211855.html

Bill Clinton and Arnold Schwarzenegger support a rate cap on payday loans. In Ohio, Democratic Governor Ted Strickland came together with Republican Senate President Bill Harris, Republican Speaker Jon Husted and Republican Financial Institutions, Real Estate and Securities Committee Chairman Chris Widener to pass House Bill 545. House Bill 545 caps interest rates on payday loans at 28% APR, down from 391% APR and ends the debt trap for hundreds of thousands of Ohioans. The bill passed the House & Senate overwhelmingly in a bipartisan fashion and now the industry wants to overturn it.

Additionally, both Senator John McCain and Senator Barack Obama voted in support of S.B. 2766, a defense reauthorization bill that included the Talent-Nelson amendment, which caps interest rates on payday loans at 36% APR for military personnel and their families. This amendment passed at the behest of the Pentagon, which found that due to the concentration of payday lending stores near military bases, payday-lending debt was negatively impacting troop readiness and morale.

So, on November 4th, please consider the overwhelming bipartisan support that Issue 5 has received and VOTE YES ON ISSUE 5!

Ohio Payday Lending Industry Rents C.O.R.E.

Free Fallin — Tue, 28 Oct 2008 12:04:24 EDT

C.O.R.E. For Rent!

The Congress for Racial Equality (C.O.R.E.) has become accustomed to taking money in return for pro-industry viewpoints.

"What does Martin Luther King Jr. have to do with payday lenders? Nada, but that hasn't stopped African American leaders from invoking his name as they shill for the credit industry."

That is a quote from a great article in Mother Jones about conservative civil rights groups schlepping for the payday lending industry. It's called "Civil Rights Groups Defending Predatory Lending: Priceless." CORE is not new to taking money from unlikely sources. CORE's reputation has been "rented out" by such large corporations as Exxon Mobil and Monsanto and now has been hired by the payday lending industry.

Read this:
http://www.motherjones.com/news/feature/2005/05/blackgold.html

Earlier this year Niger Innis, President of CORE, testified on behalf of the industry at some of the Ohio AG's hearings on payday lending. Below you can check out a newsletter where it's shared that Darrin Anderson, President of the Community Financial Services Association (CFSA) was the Chairman for CORE's 2008 Martin Luther King Jr. holiday celebration:

http://www.core-online.org/News/newsletter/newsletter_page2.htm

According to Mother Jones, CORE has been involved in several state battles on behalf of the payday lending industry:

"Yet CORE's national spokesman, Niger Innis, testified last year against a bill that would ban payday lending in Washington State, saying, "Payday lenders offer a choice that is not widely provided by traditional lenders anymore. Consequently, we think that payday lenders provide a choice that members of our communities should be allowed to make." The bill failed. In Georgia last year, when the payday lending industry tried to roll back a relatively new ban on payday lending there, CORE lobbied heavily to overturn it, along with the Georgia Legislative Black Caucus, whose chairman, Rep. Al Williams, told the Associated Press, "No one has explained to me how a person making $6 an hour and is about to get his lights turned off can go and get a loan."

You can read the rest of the Mother Jones piece here: http://www.motherjones.com/washington_dispatch/2008/08/compucredit-cfsa-payday-loans-core-sclc-civil-rights.html

Niger Innis is now in Ohio schlepping for CFSA and the Ohioans for Financial Freedom. This morning he was on Fred Andrle's show, Open Line. You can listen to his show here: http://www.wosu.org/radio/radio-open-line/

CORE has apparently lost sight of its mission:

"CORE seeks to establish, in practice, the inalienable right for all people to determine their own destiny--to decide for themselves what social and political organizations can operate in their best interest and to do so without gratuitous and inhibiting influence from those whose interest is diametrically opposed to theirs."

So, despite the fact that the payday lending industry's "interests" (trapping people in debt and making them dependant upon payday loans) are diametrically opposed to CORE's and their constituents, they seem more than happy to sell out for the right price.

The question we should be asking is: "How much money is CFSA and the Ohioans for Financial Freedom paying CORE to advocate on their behalf?"

Predatory lending should not be allowed to continue in Ohio. Lower interest rates from 391% APR to 28% APR!

Vote YES on Issue 5!

Payday Lenders Pay Firm Engaged in Fraud $439,000

Free Fallin — Mon, 27 Oct 2008 17:29:15 EDT

Payday Lenders Pay Firm Engaged in Fraud $439,000

You might remember awhile back all the media attention that centered on payday lending petition circulators lying to voters. In addition to that flap on behalf of the payday lenders, you likely heard the name Arno Political Consulting when the Ohio Secretary of State invalidated thousands of petition signatures due to the failure of the firm to file appropriately with the SOS's office.

According to last week's campaign finance filings with the Ohio Secretary of State, the industry paid Arno well over $400,000 for their services which likely included lying to and deceiving voters into signing petitions to get Issue 5 on the November ballot. You can read about Arno's past transgressions in this report by the Ballot Strategy Initiative Center: http://www.yesonissue5.com/documents/Arno_BISC%20Report%20Signature%20Gathering%20Fraud.pdf

Here is a brief summary of the fraud allegations against Arno Political Consulting:

WASHINGTON 2003 Arno accused of hiring circulators who lied to the public

FLORIDA 2004 Arno hired circulators who submitted fraudulent petitions
Arno hired circulators who submitted petitions with signatures from the dead
Arno accused of illegally registering 4000 college students as Republicans

MASSACHUSETTS 2005 Arno accused of training circulator in "bait-and-switch" tactics
Arno accused of hiring circulators who tricked voters into signing petition
Arno circulated a draft of TASC which did not correspond to the initiative submitted to the Secretary of State

NEVADA 2006 Arno hosted a 'fraud party' where circulators were taught to forge signatures onto petitions
Arno circulated a draft of TASC which did not correspond to the initiative submitted to the Secretary of State

OREGON 2006 Arno accused of violating Oregon's law prohibiting pay circulators by the number of signatures they collect

Check that out one more time: A "FRAUD PARTY"!!!

Well, it seems that despite repeated denials that the payday lending circulators weren't lying to voters or engaging in fraud, the industry is now willing to acknowledge the existence of fraud and is attempting to recoup some of what they paid to Arno. You can read about their lawsuit against Arno, here:

http://www.courthousenews.com/2008/10/27/Political_Consultants_Screwed_Up_Payday_Loan_Defenders_Say.htm

You can read the complaints against Arno Political Consultants here:
http://www.yesonissue5.com/documents/Arno%20Lawsuit.pdf

This confirms that Ohio voters were duped and deceived into signing the petitions to get Issue 5 on the ballot. Let's ensure that the payday lending industry and their subcontractors don't get away with this!

Vote yes on issue 5!

Ohio Payday Lenders Pay "Objective" Researcher

Free Fallin — Mon, 27 Oct 2008 10:22:29 EDT

The payday lenders have been touting the release of a "report" by the supposedly objective researcher William D. Keip, President of Keip Government Solutions. The economic impact study suggests that Issue 5 will lead to a reduction in economic activity and the loss of payday lending jobs.

When any report like this is released, especially in the midst of a controversial and competitive election cycle, it's important that the motives of the researchers are disclosed. Thank goodness for campaign finance reports! Last week, the campaign finance disclosure forms for both sides of Issue 5 were filed with the Ohio Secretary of State. And as luck would have it, Keip Government Solutions was PAID $8,400 for their "economic impact study."

You can view the payday lenders' contribution and expenditure forms downloaded from the Ohio Secretary of State's website here:

Contributions: http://www.yesonissue5.com/documents/Contributions.xls

Expenditures: http://www.yesonissue5.com/documents/Expenditures.xls

While $8,400 is a mere fraction of the $15 million raised for their effort to buy the election on November 4th, it does raise questions about the objectivity of a report the industry says warrants a 'no' vote on issue 5! The industry buys airtime for deceptive ads, buys misleading mailers, and buys favorable research. This is just one more example of how the predatory and dishonest payday lobby is attempting to hijack Ohio's election!

It's important that voters are reminded of the FACTS that payday lending traps hundreds of thousands of Ohio borrowers in debt each year, many of whom take out 11 or 12 loans per year and end up in debt for the better part of nearly two years. Also, well over $300 million in fees are picked from the pockets of hard working Ohioans every year, pushing struggling Ohioans off the financial cliff.

Read the report "Trapped by Design," which details the negative impacts of predatory payday lending in Ohio: http://www.yesonissue5.com/documents/TrappedByDesignFinal.pdf

A yes vote on issue 5 caps interest rates at 28% APR and limits the debt trap for Ohioans at 4 loans per year. One decade of exemptions from Ohio's usury laws for the payday lending industry is one decade too many. On November 4th, we can fix our mistake and help hundreds of thousands of Ohioans escape the debt trap and get back on their feet!

Vote yes on issue 5!

Hillsboro Times Gazette Calls Anti-Payday Advocates "Elitists"

Free Fallin — Fri, 24 Oct 2008 11:40:55 EDT

The editor and publisher of the Hillsboro Times Gazette believes that the pro-consumer advocates in support of a YES vote on Issue 5 are "elitists." Rory Ryan, editor and publisher, believes that banks, mortgage lenders and predatory payday lenders don't quite have enough representation in Washington D.C. or Columbus. It seems he considers the representation of the homeless, downtrodden and low-income Ohioans is work not worthy of someone like himself.

So, based on his warped sense of right and wrong, all those supposedly well-intentioned homeless and affordable housing advocates should put down their arugula and pour out their Starbucks lattes and begin working tirelessly on behalf of predatory lenders.

Here is Ryan's Issue 5 commentary in the Hillsboro Gazette:

"That's right, I'm also opposed to Issue 5, the referendum to change the "payday" lending practices. I've never used the services of the so-called payday lenders, but I know people who have used them and continue to use them. For minimal, short-term borrowing, these lenders often provide better options than traditional banks. For those who need $100 or $200 before payday, the payday lenders' fees are better than writing a bad check and risking an overdraft. Banks don't want to mess around with $100, $200 or $500 loans. The elitists who oppose payday lending cannot envision anyone needing to borrow what they perceive as such "trivial" amounts."

"But if you have three days to go until your next paycheck, your wallet is empty, your bank account is empty, your gas tank is empty, and your belly is empty, you might walk into a payday lender and be glad to walk out with $100. (Just be sure to pay it back posthaste - or sooner. The interest multiplies like rabbits on Viagra.) The bottom line is some folks need short-term financial help. Those who are fortunate not to be in this category should be more thankful and less judgmental. I'll vote "no" on Issue 5."

You can read Ryan's entire tirade here: http://www.timesgazette.com/main.asp?SectionID=1&SubSectionID=1&ArticleID=158290

Some folks may need financial help, but the bottom line is that we should NOT allow payday lenders to prey on those who find themselves struggling. The profits and success of the payday lending industry are contingent upon trapping low-income, disabled and elderly Ohioans in debt and that SHOULD be morally reprehensible. It's time those in the financial services industry and those in the statehouse showed a little leadership and worked to find more (several alternatives already exist) way to provide small loans to Ohio consumers. 391% APR is NOT the best we can do!

Vote yes on issue 5!