Ohioans Will Have Payday Loans

Payday loans in Ohio: still alive

It’s interesting that 12 people took the time to vent their “moral outrage” over changes in the Ohio payday loans industry. Interesting, in that it wasn’t until the 13th person commented on Sheryl Harris’ Cleveland Plain Dealer editorial that they noticed something wacky.

Here it is. The numbers have been left the save preserve the editorial integrity of the source material:

So when payday lending was legal last year, CheckSmart customers paid $575 to walk out the door with $500 in cash.

Under the new licensing scheme, CheckSmart customers pay $575 to walk out the door with $500 in cash.

Shocker!

Sure, it must be a typo, but let’s move on.

If you didn’t already know, payday loans have been banned in Ohio. This ban came not only during a recession, but during a time when Ohio’s state of budget affairs was among the worst in the nation. Unemployment is high; kicking out legitimate businesses is a bad idea.

Harris draws our attention to House Bill 545, which she says was “supposed to help consumers by creating a Short-Term Loan Act that gave borrowers at least a month to pay off loans. More importantly, the new law was supposed to drive down the costs.” The crux of the argument Harris and people like her use against the payday loan industry is that the APR for a loan would be a “jaw-dropping” 391 percent.

But that’s not what’s really jaw-dropping!

What’s truly jaw dropping is that we’re expected to eat and like the spoon-fed rhetoric that payday loans are annual loans! Right-thinking people must stand up for intellectual honest and stamp out these deceptively mild distortions of the truth. Sure, if a payday loan could be extrapolated out over an entire year, 391 percent in annual interest is possible. However, since they are two-week loans that charge $15 in many locations, You’re looking at 15 percent paid in interest, on top of the principal. For a short-term loan that is often given to clients with less than perfect credit, that is both a bargain and a price point that helps shelter lenders from risk. ... click here to read the rest of the article titled "Ohioans Will Have Payday Loans"