ELECTION 2008: ENDORSEMENT: *YES* on Issue 5

This is probably one of the more pressing issues on our ballot this time around, excepting the actual representative elections.

Issue 5 is a vote to maintain reforms put into place by the Ohio Legislature to reduce the lending abilities by so-called payday lenders. Currently, payday lenders can charge up to 391% interest on these loands which, yes, over two weeks would only be $15 on a $100 loan. However, the cycle that is created for predominantly low-income persons just trying to make ends meet is destructive and does not help the current credit crisis. For my original post on the issue, go here.

I have friends stuck in this mess (as shown by the fun little cartoon below), and it's rough and it's difficult to get out of. Yea, there's an argument to be made that people should be responsible for their own money and their own financial decisions.

Not to be snarky, but we've seen where that has gotten us, haven't we?


Language of issue 5.
Arguments for it.
Yes on Issue 5 Campaign.

OHIO/CINNKY: Ohioans for Financial Freedom

Apparently, there is no YouTube of this new annoying political ad.

Here's the rundown: in June, the House, Senate, and the Governor put into effect a law that cracked down on the predatory lending of... drum roll please... check cashing establishments (part of HB 545). Most people know what these are (Check into cash anyone?), and I remember distinctly a conversation with my little cousin once about how they were the harbringers of "bad people" into his quaint little suburban Louisville neighborhood. (Teased it out, "bad people" = "poor" or "black" people.)

Now, the group Ohioans for Financial Freedom are desperately seeking the 230,000+ signatures necessary by Sept. 1 to put this up to a November vote... and by doing so putting out some really really bad and clearly biased ads.

Check here, because I am sure glad I wasn't the only one who noticed the weirdness of a farmer talking about needed to be tided over "just until payday."

Now, before my Republican friends scream about how this is incurring on the rights of businesses to do as they please, here is what the new law did:

-capped the interest rate from 391% to 25% (if you watch the video on the website above the $15 on $100 is the 391% rate on a two-week loan of $100... but that's not considering the fees that come with starting an account at one of these places)
-limit consumer borrowing at these locations -- max $500 a time, four times a year (so you don't cycle the debt)
-extends the loan term from two weeks to 31 days
(info from the Dayton Business Journal)

Doesn't sound that unreasonable, know? In fact, I wish someone would have protected me against myself when it came to loans and debt... I would have greatly benefitted from some better caps on my credit cards :-).

Or, you know, learning that you can, in fact, keep spending on your card for weeks and months after it's already overdrawn.