ProgressOhio

Payday Lenders Continue to Spend & Spin

The payday lobby seems to think that their opponents are being bankrolled by "special interests," apparently disregarding the fact that they are one big "special interest." In Arizona, the payday lenders have exceeded the $9 million mark in their efforts to overturn a pro-consumer bill in that state.

You can read an Article from the Arizona Star, here: http://www.azstarnet.com/metro/254016. The article suggests that the industry's opponents raise and spend next to nothing in comparison.

In Ohio, the payday lobby is outspending their opponents by incredible margins. The disparity in expenditures is easily evident just by looking at the millions of dollars spent on television ads by the payday lobby versus the unusual technique being utilized by the proponents of payday lending reform: YouTube.com! CNN Money and Forbes Magazine picked up an Associated Press story about the efforts to compete with a multi-million dollar lobby: http://www.forbes.com/feeds/ap/2008/08/26/ap5360144.html.

From the article:

Up against a multimillion dollar ad campaign, defenders of Ohio's tough new payday lending law are turning to YouTube.com.

The Coalition on Homelessness and Housing in Ohio has created an online video that warns viewers not to be deceived by the payday lending industry, which is trying to repeal the law.


You can view the YouTube video, here: http://www.youtube.com/watch?v=zDoeXujagE4

Despite enumerable examples of evidence that the payday lobby is working diligently to deceive voters, the industry continues to throw up smoke and mirrors trying to change the subject. The facts, however, remain the same. Payday lending is a debt trap and 391% interest is too high!

Don't be fooled by the payday lobby! 391% interest is not freedom! If you think 391% interest is too high, VOTE YES ON ISSUE 5!

http://www.voteyesonissue5.org

Check out the Akron Beacon Journal's editorial, entitled "Deceptive language: Jennifer Brunner helps payday lenders get their way."

http://www.ohio.com/editorial/opinions/27065534.html

I was stunned to learn that the individual chosen by the people of this state to accurately inform voters on ballot abdicated her duty last week. The language adopted by the ballot board is incomplete, confusing and unworthy of an issue as contentious as payday lending.

Payday lenders are required to put 391% APR on their disclosure forms for a two week loan. If it's good enough for payday borrowers, it's good enough for voters. Ms. Brunner redeemed herself, if only slightly, to acknowledge that a YES vote on issue 5 would reduce interest rates from 391% to 28%.

If the language remains, let's hope the Secretary of State helps to strike names off petitions of people around the state who were misled into signing. Even if Ms. Brunner didn't get it right last week, you can still get it right on November 4th. A 'no' vote allows 391% interest to persist while a 'yes' vote will end predatory payday lending in Ohio. I trust Ohio voters will see through the payday lenders' smoke and mirrors -- it's just too bad the Secretary of State had to plug in the machine.

Vote Yes on Issue 5!
http://yesonissue5.org

Olympic Size Misinformation!

Well, the first phase of "Operation Buy 391% Interest" has begun! The payday lobby is out with their new ad.

Their plan is to run these during the Olympics, trying to convince Ohio voters that payday lenders are just here to help good ol' folks like you and I! The payday lobby is making a mockery of Ohio's election process and is attempting to appeal to the better nature of all Americans and Ohioans by continuously throwing around the word "Freedom". I personally feel used when I hear it over and over again!

The ad says Ohio politicians are risking 6,000 good-paying jobs by passing House Bill 545. Well, that's just patently false! The ad conveniently forgot to mention that the Ohio Department of Commerce has a nice stack of over 1,000 applications for new licenses from payday lenders who want to operate under the new law!

The ad mentions nothing about the fact that overturning the law will keep interest rates on payday loans at the outrageously high rate of 391% APR! It also neglects to mention that payday lenders have long gotten a free pass from the Ohio legislature to ignore Ohio's usury laws and bilk working Ohioans of their hard earned dollars.

The payday lenders are taking advantage of our state and its struggling economy to make a quick buck on our citizens and it is time Ohio voters told them to take a hike! A product designed to trap borrowers in debt for purposes of extracting maximum profit is a product that needs reformed. Usury is not freedom! As, Governor Strickland, Speaker Husted and Senate President Bill Harris said yesterday, the payday lending experiment failed in Ohio and it's time to reign in another predatory industry that sucks money out of our state like a leech. Another 91,000 families will file for foreclosure in Ohio by year's end due to predatory mortgage lending.

Payday lenders have displayed zero behavior that would suggest we should trust them any more than we did our mortgage lenders and brokers who peddled subprime mortgages right and left.

Here's the Ad:

Industry Front Group Website Goes Live

The Community Financial Services Association's campaign to overturn House Bill 545 went live with a new website yesterday. Their website, Ohioans4financialfreedom, displays how out of touch they are with real Ohioans.

First, they say: "Protect 6,000 good-paying jobs that could be lost."

This is not accurate. House Bill 545 says absolutely nothing about closing any businesses or preventing the dispersion of payday loans. House Bill 545 simply caps interest rates and fees at 28% APR, protecting Ohio's consumers from predatory 391% APR interest. Payday lending stores have already started applying for licenses to continue operating under the new law from the Ohio Department of Commerce. If any stores close, it's because they choose to, not because they have to.

Second, they say: "Protect your financial freedom and private financial choices."

Payday lenders target low-income neighborhoods where it is easier for them to encourage people to walk through the door. Neon signs with "Get cash in minutes!" and "Easy cash quick," etc. Once a borrower is trapped in a cycle of payday loans, it becomes necessary for the consumer to keep taking out loans. This is not a choice! Usurious payday loans at 391% are bad for Ohioans and bad for the Ohio economy. Usury is not freedom!

Third, they say: "Protect your right to privacy about your personal finances."

This is a nice catch phrase that appeals to just about everyone! House Bill 545 includes a provision calling for the creation of a database that will let lenders know how many loans a person has taken out at a given time. This allows lenders to lend according to borrowers ability to repay - something neither predatory mortgage lenders nor payday lenders seem to care about.

And finally, once again, the industry uses their lame argument for why their referendum should be on the ballot: "Ohioans have a right to repeal bad laws."

Well, it bears repeating that House Bill 545 is one of the best consumer protection laws in the country and will help hundreds of thousands of Ohioans escape the debt trap. Ohioans do have a right to overturn bad laws, but this referendum effort is not being mounted by Ohioans, but by industry lobbyists and attorneys flown in on their corporate jets. Where are the citizens working on this referendum? Where are the consumers calling for 391% interest? They are nowhere to be found. Instead, the industry lobby CFSA is the sole donor to the effort to repeal House Bill 545. This is right in line with what they are doing in other states like Arizona where they've spent $8.7 million to overturn a consumer law and in Virginia where they succeeded in buying higher interest rates for a low, low price of $20 million.

The Ohio government should be PROTECTING consumers from predatory business practices that rely on borrowers getting trapped in a cycle of debt! Payday lending is bad for Ohio!

Payday lenders are mounting a huge campaign in Ohio to overturn one of the nation's landmark consumer protections laws, House Bill 545. House Bill 545, which lowers interest rates payday lenders can charge from 391% APR to 28% APR, is now under attack! The payday lobby has spent exorbitant sums of money in other states to protect their profits earned off the backs of the working poor.

In Arizona, the payday lobby has spent over $8.7 million to collect signatures to get an initiative on the November ballot. It's clear that the national payday lobby, CFSA, is behind the initiative, not "citizens of Arizona." Check out this quote from an article in the Arizona Republic: "Grass roots? Nope. Not yet anyway…likewise, nearly every sent of the $8.7 million dumped into a ballot effort benefiting the payday-loan industry has been donated by - guess who? - a trade group representing the payday lenders: the Arizona Community Financial Services Association." You can view the article in its entirety, here: http://www.azcentral.com/arizonarepublic/news/articles/2008/07/30/20080730initiatives0730.html.

In Virginia, the national payday lobby has spent roughly $20 million to "buy" higher interest rates from the Virginia General Assembly (payday lenders can now charge 592% APR!). You can read about that here: http://www.inrich.com/cva/ric/news/business.apx.-content-articles-RTD-2008-07-25-0214.html.

In Ohio, the sole donor to the "citizen referendum" campaign is CFSA, to the tune of $850,000 in less than 6 months.

We can expect millions more to flood in before Election Day in November. Beware Ohio voters! The referendum process allowed by the Ohio Constitution is being hijacked by the payday lending industry.

Tell payday lenders you can't be bought and vote early by refusing to sign petitions being circulated by the industry to keep 391% interest.