2008 Woodie Awards
Petitioners hope to repeal cash-lending law
By: Steve Kunkler
Issue date: 9/17/08 Section: State
Throughout the past several months, petitioners in Ohio have been busy trying to collect the necessary amount of signatures needed to change the current cash lending laws.
But while petitioners are collecting signatures, voters in Ohio will have to wait and see whether or not changes will take place to the new laws which went into effect on Sept. 1.
If enough signatures are collected, a referendum on the November ballot will be added in order to repeal House Bill 545 - a bill which places tighter restrictions on short-term cash lending businesses, also referred to as payday lenders.
Under the old law, businesses like Cash Advance would be able to make a short term loan to individuals for up to $800 and could allow up to six months for the loan to be paid back. Previously, there was no cap placed on the amount of interest a company could put on a short term loan.
The new law would require the maximum loan to be no more than $500 along with placing a cap of 28 percent annual percentage rate on any short term loan. The law also requires the loan to be paid back in no less than 31 days.
Several people who work for short term lending businesses argued that the new law will cost jobs and restrict financial options for people in the state who do not have a strong credit history.
Among those who support the repeal of the new law is Tom Suder, the market manager of Cashland in Bowling Green.
Suder disagrees with the restrictions which the law places on businesses and believes the law, which went into effect earlier this month, will not only cost jobs in Ohio but will also limit the choices people have financially.
"I don't agree with the bill because it would put 6,000 people out of work and would hurt thousands upon thousands of people who use the service responsibly and have no other options to meet their short term financial needs," Suder said.
While Suder believes that not everyone needs payday advances, that should not restrict those who need the service from obtaining a short term loan.
But while petitioners are collecting signatures, voters in Ohio will have to wait and see whether or not changes will take place to the new laws which went into effect on Sept. 1.
If enough signatures are collected, a referendum on the November ballot will be added in order to repeal House Bill 545 - a bill which places tighter restrictions on short-term cash lending businesses, also referred to as payday lenders.
Under the old law, businesses like Cash Advance would be able to make a short term loan to individuals for up to $800 and could allow up to six months for the loan to be paid back. Previously, there was no cap placed on the amount of interest a company could put on a short term loan.
The new law would require the maximum loan to be no more than $500 along with placing a cap of 28 percent annual percentage rate on any short term loan. The law also requires the loan to be paid back in no less than 31 days.
Several people who work for short term lending businesses argued that the new law will cost jobs and restrict financial options for people in the state who do not have a strong credit history.
Among those who support the repeal of the new law is Tom Suder, the market manager of Cashland in Bowling Green.
Suder disagrees with the restrictions which the law places on businesses and believes the law, which went into effect earlier this month, will not only cost jobs in Ohio but will also limit the choices people have financially.
"I don't agree with the bill because it would put 6,000 people out of work and would hurt thousands upon thousands of people who use the service responsibly and have no other options to meet their short term financial needs," Suder said.
While Suder believes that not everyone needs payday advances, that should not restrict those who need the service from obtaining a short term loan.
Viewing Comments 1 - 5 of 6
junior
posted 9/17/08 @ 9:39 AM EST
With the disaster taking place on Wall Street, and the resultant tightening of credit, it is even more imperative that consumers have access to financial options. (Continued…)
Bobby
posted 9/17/08 @ 10:14 AM EST
The economic downtown we're in is the result of lax oversight, loose regulation and the proliferation of predatory lending. The worst thing we could possibly do for Ohio's consumers and their families is to leave them vulnerable to predatory payday lending. (Continued…)
freedom 1234
posted 9/17/08 @ 11:00 AM EST
Isnt it time that we trust individuals over government to make the best decisions for their family.
Mike Coleman
posted 9/18/08 @ 5:09 PM EST
The so called 28% loans are not being repealed. If businesses start offering these loans, payday lenders will have to meet or beat these loans. This is called competition which normally works better than government mandated restrictions. (Continued…)
MichelleOsama
posted 9/20/08 @ 9:57 AM EST
These businesses are nothing more than formalized, dolled up loan sharks. They wouldn't be needed if people would be more responsible in their spending habits. (Continued…)
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