Another Day, Another Misleading Report on Payday Lending
Tuesday, September 30th, 2008 By Marc KilmerThe Cleveland Plain Dealer is at it again, publishing a story on payday lending that seem to have been written by the Center for Responsible Lending or some other anti-lending group. This story is an ostensible fact-check on the TV ad from Ohioans for Financial Freedom (OFF). In the ad, OFF talks about all the jobs that would be lost when payday lenders shut down.
It’s interesting to note that while the author of this piece, V. David Sartin, castigates OFF for misrepresenting the facts, he trots out this complete untruth to smear the industry: “Old Ohio law allowed interest rates as high as 391 percent for a two-week loan.” Using his own rating system, Sartin would get a 0 on a scale from 0 (misleading) to 10 (truthful) . Old Ohio law allowed a 15% interest rate on a two-week loan. People were not paying $391 to borrow $100. They were paying $15 to do so. How can Sartin be the one evaluating these ads when he lacks basic knowledge about the industry.
Furthermore, Sartin, instead of actually checking facts, simply dismisses the idea that people will lose their jobs. It says that many of the stores will remain open to provide service and, thus, employ people. But it’s unclear how many stores will actually remain open and how many people they will employ. After all, it’s pretty hard to make a profit when you are only allowed to charge $1.08 per every $100 borrowed on a two-week loan. It’s clear that the payday lending “reform” legislation passed by the General Assembly is a job-killer. It would be nice if newspapers actually did some digging into the facts before writing on this subject.
Tags: media bias, payday lending, Regulation
September 30th, 2008 at 3:28 pm
Sartin says the ad “piggybacks on our fears of a looming economic crisis.” With the national financial meltdown and Ohio’s steadily climbing unemployement rate, one can hardly say that a crisis is “looming.” It’s about to hit like a freight train! What perfect timing for Ohioans to have a viable credit option eliminated from the table. If ever folks will need access to short-term loans like payday lenders offer, the time is now! Anyone who fails to realize that is either part of the credit problem or in denial. Vote NO on Issue 5 and preserve your financial freedom.