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Voting 'yes' on 5 upholds state law
By Dennis J. Willard
Beacon Journal Columbus Bureau
Published on Thursday, Oct 30, 2008
COLUMBUS: Issue 5 was brought to the ballot by the payday lending industry to repeal a law passed by Republicans and Democrats in the state legislature and signed by Gov. Ted Strickland that caps their allowable interest rates at 28 percent.
But there's a catch.
In order for the law to be repealed, the issue must fail.
In other words, more than 50 percent of the voters in Ohio must cast a ''no'' vote for the law to be removed from the books.
Jeff Ortega, a spokesman for Ohio Secretary of State Jennifer Brunner, said the issue is a referendum on an existing law so a ''no'' vote makes sense because voters are saying they do not want the law that was enacted.
Catherine Turcer, an Ohio Citizen Action spokeswoman, said she believes the secretary of state and the Ohio Ballot Board
that approved the language should have done the opposite.
Turcer said confused voters often play it safe by choosing ''no.''
''We want citizens to know what they are voting on so they can make a good and informed choice. Instead, this is confusing,'' Turcer said.
Kim Norris, spokeswoman for Ohioans for Financial Freedom funded primarily by payday lenders, said the issue is not confusing.
''It is clear that you are repealing a law, that you are saying no to the law that has been created,'' Norris said.
Since 1915, there have been 11 referendum votes on the statewide ballot and only one — to provide for a state prohibition on liquor and its enforcement — kept the law on the books.
All were presented to voters in the same manner as Issue 5, with a ''yes'' vote meaning the law would be maintained on the books and a ''no'' vote leading to a repeal.
The referendum language advises voters that approving Issue 5 would mean ''short term lenders'' are subject to lending no more than $500, giving borrowers at least 30 days to repay and charging no more than a 28 annual percentage rate (APR) on the loans.
By voting no, payday lending companies would continue to loan up to $800 with no minimum repayment period.
''Check cashing lenders could continue to charge rates and fees, resulting in a total charge for a loan that substantially exceeds an equivalent APR of 28 percent,'' the language notes.
This has been a key issue in the debate on payday lending.
Length of loans
Norris maintains the loans are for two weeks, and customers are charged $15 for every $100 borrowed,
She acknowledges this would be a 391 percent APR if the loans were for a year, but they are not.
Sandy Theis, a spokeswoman for Is 391% Too High, Vote Yes on Issue 5, said payday lending customers are often caught in a debt cycle for years, so the APR is more accurate than just $15 for a two-week loan.
''A yes vote is a vote for the new law. A yes vote is a vote for the lower interest rate,'' Theis stressed.
Theis said the issue is confusing to voters, and her organization believes if voters understand a ''yes'' vote will lower interest rates, the issue will pass.
According to the most recent finance reports, in 2008 the payday lending group has raised $15.9 million and spent $14.6 million, but those figures will rise and the total will not be known until post-election spending reports are filed.
The Vote Yes group reported raising $265,000 and spending $261,000.
With the bulk of the money going to television and radio advertising, the payday lenders are focusing their commercials on the projected loss of 6,000 jobs, ensuring customers have a place to turn for short-term loans and warning Ohioans their names will go into a government database if the law stays on the books.
Norris said her group has produced and aired ads that cite the 391 percent interest rate, but she said the majority of the commercials have focused on three issues.
''We have focused on what is important to all Ohioans, and that is jobs, privacy issues and credit options,'' Norris said.
Brunner's office certified the issue on Oct. 23, which meant votes were cast for or against the issue before the state knew if enough valid signatures had been collected.
State Issue 1 before voters Tuesday attempts to clarify some of the peculiarities in the initiative petition and referendum process, including changing the deadlines for turning over the required number of signatures.
Touting endorsements
Both sides are touting their endorsements.
The payday lending effort has the backing of the Ohio Chamber of Commerce and the Ohio Grocers Association, among others, and has been endorsed by the state's largest African-American newspaper.
Norris said the Call & Post editors understand that the current law will lead to 1,600 payday lenders closing across the state, and lawmakers and Strickland did not provide an alternative to borrow money for people who need cash on a short-term basis.
The Vote Yes endorsement includes a number of current and former statewide leaders, the Ohio Manufacturers' Association, the AARP Ohio, and a broad coalition of church groups, including two former antagonists: Tim Ahrens with the First Congregational Church of Christ in Columbus and the pastor he once filed a complaint against for allegedly mixing religion and politics, Rod Parsley of the World Harvest Church in Canal Winchester.
The Ohio Farm Bureau and the Ohio Farmers Union are also backing the Vote Yes organization.
The Farm Bureau recently criticized the payday lenders for using a farmer in their first commercial.
Dennis J. Willard can be reached at 614-224-1613 or dwillard@thebeaconjournal.com.
COLUMBUS: Issue 5 was brought to the ballot by the payday lending industry to repeal a law passed by Republicans and Democrats in the state legislature and signed by Gov. Ted Strickland that caps their allowable interest rates at 28 percent.
Get the full article here.
Comments
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Posted 03:20 AM, 10/30/2008
Thank you for this explanation. We are not getting rid of jobs, just reducing the percentage they charge on a loan closer to the charge for a credit card. Its still too high but more manageable. Im voting yes on this issue. Now voting on issue six will erase the chance for five to ten thousand jobs. Its easy to see through issue six. The Argosy Casino in Indiana is trying to keep Ohio from creating thousands of badly needed jobs right in an area where there closing down a sectional center of shipping jobs. Argosy and their neighboring casinos will miss out on a half billion dollars a year if we vote yes. They only have their own interest at heart. This money will be spent in Ohio (yes vote) or in Indiana (no vote)along with the 10,000 jobs that are badly needed. We have the higest unemployment in the country.
Posted 03:23 AM, 10/30/2008
I failed to mention that Gov. Strictland already gave us Keno and we have bingo and Vegas nights, horse racing. Gambling is gambling, its just who gets the money and jobs.
Dalton Ave, Henderson, NV
Posted 06:27 AM, 10/30/2008
Who cares what these people charge? If people want to use the service knowing they are being ripped off... be my guest.
- Uncle Ed
Posted 06:41 AM, 10/30/2008
This explanation really clears this confusion up for a lot of people, As far as issue 5 there are a lot of people here in Ohio that use this service the way it is intended, A few of my friends have become unemployed due to one such check cashing business closing (they worked there). How much more unemployment can the state of Ohio afford before the whole state crumbles? This state is in such bad shape that we cannot afford to create jobs when possible, Issue 6 means creating jobs, and as the above article states we need jobs here. Take a weekend or even weekday trip to any state surrounding Ohio to a casino, yes they all have them except Ohio and see just what the ratio of Ohio cars in the lot are to that own states, go figure like 3 to 1, gee spend that money at home and wow maybe Ohio woulodn't be in the shape it's in.
Tallmadge, OH
Posted 06:58 AM, 10/30/2008
I'm voting NO. People who use these Payday Lenders are out of options. They know they are paying 391% interest, but don't care because banks and credit cards are not an option. If the Payday lenders go out of business then the loan sharks will be back breaking arms and legs or crime will increase because that's their othe roption. Is that what you want? We also save 6000 Ohio jobs. Why would anyone vote YES on this state wide issue?
Posted 08:31 AM, 10/30/2008
Loan sharks are the same,, whether they are "legal" or not. I could care less if someone signs up for a usuriuos interest rate,, they know what the charges are. Let the buyer beware.
akron, oh
Posted 09:30 AM, 10/30/2008
Well. I bet they just institute a $15 processing fee for every $100 borrowed. Plus they will add Late fee's.... That isn't interest.... Plus the 28 % interest.
These people arent going to lose a cash cow like pay day lending ...
Posted 10:32 AM, 10/30/2008
ISSUE 5
Forget if you agree with the idea of pday loans or not- FOCUS on the fact that the Ohio General Assembly thinks they have the right to control what financial products are available to the citizens of Ohio. Big brother style.
Forget if you have used a PD loan or not-- FOCUS on the fact that other consenting adults do and are capable of making their own decisions, based on their individiual situations. Who are we to say no, you can't use that credit card? Or no you can't use that bank?
Forget everything else -- FOCUS on the fact that eliminating payday loans DOES NOT eliminate the need for short term financial options. I bet 99.9% of the OGA doesn't have to worry about the day to day necessities the rest of are dealing with. They have insurance, pensions, well paying jobs.
Forget about the Pday loan argument -- FOCUS on the controlling and spending of our household money by the state. Considering our current economic situation... I vote for less intrusion!! PLEASE let me manage my own darn $$ since the gov't has shown they are not responsible, accountable or budget conscious. Ohio>> 60M in debt!!
Forget about the Pday loan side-- FOCUS on what else the government is going to decide in the future (under the guise of "paternalism") that we aren't capable of handling as adults. Restricting how much can be spent on food? alcohol? cigarettes? housing? gambling? clothes?
FOCUS on the fact that the OGA is intruding on our personal financial decisions... where does it stop?? Why do they think they know better what will work for us than we do? We live it every day!!!
The Issue of 5 is waaaay bigger than PD Loans >> its about Financial Freedom of Choice, which I consider to be a BASIC FUNDAMENTAL RIGHT!
***NO on ISSUE 5!****
Posted 11:07 AM, 10/30/2008
CASEY - FOCUS- the only thing you are FOCUSING on is how many ways can you steal from the poor and uneducated.....some folks need to be protected from either themselves or from predatory lending people like yourself !
VOTE YES
Dalton Ave, Henderson, NV
Posted 11:58 AM, 10/30/2008
@Appraisit - who are you to define a loan as stealing? Who are you to make the decision to protect someone from themselves? Why do you feel the need to force your definition of right and wrong on someone else?
- Uncle Ed
Posted 12:34 PM, 10/30/2008
Appraisit-- Seriously?!! So in your opinion some consenting mature educated adults need to be protected from themselves and decisions you dont think they should make? Where does that stop? Who stops it? Why are you trying to pass the blame?
If you'd like to truly see the absolute absurdity of this line of faulty reasoning.....
We should ban and eliminate payday loans b/c a small minority is irresponsible and has trouble making "good" financial decisions and budgeting? So basically let's punish the MAJORITY for the mistakes of the MINORITY.
Gosh-- I certainly hope we don't apply that same flawed line of reasoning to driving, eating, smoking, drinking or anything else. Because it's totally idiotic!!
Some adults get into accidents, yet we don't ban EVERYONE from driving.
Some are overweight and eat fast food , yet we don't ban food or require anyone to eat only at certain restaurants or only eat specific foods.
Some want to smoke & drink, they may be addicted or spend "too much" money on those vices, yet we don't ban smoking or drinking.
Some blow all their money on "frivilous items ie-- lottery, gambling, clothing, electronics, etc & consequently can't and don't pay their bills, yet we don't take away their money.
Punishing everyone for the mistakes or poor judgement of a small minority of others WRONG. The Ohio General Assembly is attempting to protect us from ourselves--- how ironic!!!We need protection from them limiting our basic rights--- including financial freedom!!!
Adults are and should be responsible for their choices! Don't tell me how or where to earn my money and certainly don't tell me where I can spend it!! MY $$, MY CHOICE
NO on 5!
Posted 12:35 PM, 10/30/2008
I love the media bias in the newspapers(strike pay dirt)?????These companys are making on average 5% profit a year.Pay dirt??????This issue is a non issue people from early poll numbers are voting no on 5 because it's just to intrusive and the only reason there getting any votes on the yes side is media being to lazy to report both sides of the issue fairly.It would take to much time to tell people how 391% is very misleading,because its an APR and a payday loan is over two weeks.Just remember its the media's job to be honest to shine light on both sides because some people shape there opinion straight from the fish wrap.COME ON BOYS TELL IT LIKE IT IS....VOTE NO ON 5 FREEDOM IS AT STAKE
Posted 12:38 PM, 10/30/2008
Oh and one more thing... since you clearly are in need of some education about the PD Industry (and I'm happy to help!!)
Some ACTUAL COLD HARD FACTS —
“In truth, the typical payday advance customer represents the lion’s share of America’s middle class. ****A typical payday loan customer is a hard working, family raising adult who does not have savings or disposable income to use as a safety net when an unexpected expense occurs.****
1)The majority of payday advance customers earn between $25,000 and $50,000 annually; (hardly poor)
2)Sixty-eight percent are under 45 years old; only 4 percent are over 65, compared to 20 percent of the population; (surprise a majority are not senior citizens!!)
3)Ninety-four percent have a high school diploma or better, with 56 percent having some college or a degree; (hardly uneducated)
4)Forty-two percent own their own homes;
5)The majority are married and 64 percent have children in the household; and,
6) One hundred percent (YES--100%!!!!!!!) have steady incomes and active checking accounts, both of which are required to receive a payday advance.” (Source- PD Facts)
VOTE NO on ISSUE 5
Posted 12:40 PM, 10/30/2008
And oh Appraisit--- since you clearly are not well versed in the PD Industry-- allow me to elighten up with some ACTUAL COLD HARD FACTS —
“In truth, the typical payday advance customer represents the lion’s share of America’s middle class. ***A typical payday loan customer is a hard working, family raising adult who does not have savings or disposable income to use as a safety net when an unexpected expense occurs.***
1)The majority of payday advance customers earn between $25,000 and $50,000 annually; (hardly poor or low income)
2)Sixty-eight percent are under 45 years old; only 4 percent are over 65, compared to 20 percent of the population; (surprise a majority are not senior citizens!!)
3)Ninety-four percent have a high school diploma or better, with 56 percent having some college or a degree; (hardly uneducated or ignorant adults)
4)Forty-two percent own their own homes;
5)The majority are married and 64 percent have children in the household; and,
6) One hundred percent (YES--100%!!!!!!!) have steady incomes and active checking accounts, both of which are required to receive a payday advance.” (Source- PD Facts)
VOTE NO on ISSUE 5
Posted 01:58 PM, 10/30/2008
It certainly is pay dirt! The predatory payday lending industry is a $85 billion a year industry whose profits are contingent upon trapping people in debt! Come on folks, if you vote 'no', Ohio will become the stomping ground for thousands more of these predatory lending shops. We've already got 1,600, more than McDonald's, Wendy's and Burger Kings combined! Vote YES on Issue 5! Lower interest rates on payday loans and keep these unscrupulous lenders from trapping hundreds of thousands of Ohioans in debt! I'll be voting yes on issue 5!
http://www.yesonissue5.com
Posted 02:01 PM, 10/30/2008
Hellooooooooooooo
NO ON 5
Posted 02:52 PM, 10/30/2008
If people want /need to use this type of business, that is their choice. PD loans businesses do notlend money to children. They lend money to adults. It is up to adults to use this service wisely. If they can't, thats their problem.
akron, oh
Posted 02:18 PM, 10/31/2008
What other businesses are going to open shop in the ghetto?
