wondering about opinions on new bill that passed in ohio about payday lending? What do you think?
sammywoo asked:
New law passed in Ohio that will eliminate payday lending industry. Will put over 6,000 out of work and eliminate short term loans for people that don’t have good enough credit to go to a bank and get a short term loan. I would just like to get some people’s opinon on this. Thanks for all the input.
New law passed in Ohio that will eliminate payday lending industry. Will put over 6,000 out of work and eliminate short term loans for people that don’t have good enough credit to go to a bank and get a short term loan. I would just like to get some people’s opinon on this. Thanks for all the input.
PayDay lending is simply “loan sharking”. The State of Ohio has always had tight lending laws, so to learn they are closing Pay Day lenders is no surprise.
For maybe 80 years and at least since the 50s there has been a general biases against high interest rate loans. So the growth of payday lending is a more short term or recent occurrence. It is important to understand the history. Also for over 10 years there have been serious and vocal concerns over this industry. And the industry has not really taken any clear steps to address those concerns. I am not saying right or wrong, these are just facts.
As for banks, the banks are regulated and are subject to interest rate caps. As default rates of a population is higher the rates, of course, need to be higher. Banks were not allowed to charge the fees and rates needed to make loans to this high risk group. Some banks may not have wanted to participate in this market, but some may have.
For example some states allow title lending, ie pawning your car, Ohio and many others do not. So there are other lending products that are regulated or not allowed.
What I think should have happened is that the payday lending industry should have been placed under a state agency to be regulated, so maybe you don’t end up with the current situation.
My opinion, offering to “help” people with 300% interest rate loans is not really helping. I know we should all have more freedom, but I have to wear a seatbelt, can not drive over 65 even if the road is clear with no traffic, folks can’t smoke in a bar, a company can not take consumer deposits unless registered as a bank, on and on.
Do mainstream banks and credit card companies need to have more regulation, sure look at the mortgage mess, and the rate and fees on credit cards.
As for the jobs, not sure where you get that number, could be that high, could be lower as the payday lenders cut rates and find a way to stay in business.
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Payday loan companies prey on people with poor credit and few resources. The interest rates are in the 600% range. Loan sharks offer better deals.
Ohio is just the latest in an every increasing number of states that have outlawed such usurary.