Apparently Editorials Don’t Need to Rely on Facts
Thursday, October 23rd, 2008 By Marc KilmerDuring the debate over payday lending “reform” in the state, I’m amazed at how misinformed the editors at Ohio’s newspapers are on this subject. The editorials they write blasting payday lending make a variety of statements that have little or no basis in fact. Today’s editorial from the Toledo Blade is no exception.
Take this claim: “Loans still will be available to people who need them but at an interest rate that, while still high, will be comparable to that charged by credit card companies. Unscrupulous lenders will simply be prevented from profiting excessively from the misfortunes of people with few resources.” For one, the idea that these loans will still be available after this “reform” goes into effect is contradicted by other jurisdictions that enacted similar laws. These types of short-term loans dried up in those places and they will in Ohio, too. Two, payday lenders make a profit between 3% and 8%. How is that “excessive”?
The editors also claim that lenders “take advantage of personal misfortune by charging usurious interest rates that often trap their customers in a cycle of debt.” They take advantage of personal misfortune the same way that grocery stores take advantage of hunger. Yes, people who have personal misfortune turn to payday lenders. Giving people a way to address this personal misfortune is the same as giving people a way to address their hunger. Furthermore, there is no basis to call payday lending “usurious” nor is there any proof that they trap people in a “cycle of debt.”
It’s unfortunate that these completely false statements permeate the media’s view on payday lending. I thought editors would have more regard for being factually correct. I guess I was wrong.
Tags: issue 5, payday lending, Regulation
October 23rd, 2008 at 6:35 pm
Pay day loan sharks prey on the people they know can’t afford their ridiculous interest rates. They need to be regulated, and Issue 5 is the right way to do it.
Yes on Issue 5!
October 24th, 2008 at 7:47 am
How do payday lenders know people can’t afford their rates? The people who take payday loans have jobs and have checking accounts. These people promise to repay the money. Yes, some do not repay. That means payday lenders are out a lot of money to those people. If payday lenders want to take that risk, they should be free to do so. Both parties agree to the economic transaction. Why is that any of your business?
October 24th, 2008 at 10:17 am
The assertion often made that payday lenders prey on customers they know can’t repay the loan is ridiculous. How crazy is it to go after customers you know can’t pay? How about if you intentionally rented an apartment to someone you knew couldn’t afford it? How about if you served a dinner in your restaurant to someone who couldn’t pay? Just how long would those establishments stay in business? Why can’t critics understand that payday loans are a viable and reasonable option for those who need emergency cash?
Vote NO on Issue 5!
October 24th, 2008 at 11:53 am
Vote NO on Bad laws that no one wanted to begin with.PROTECT 10,000 GOOD PAYING OHIO JOBS.No more GOVERNMENT CONTROLLED DATABASES..This is An attack on freedom in this state this is serious and we need to spread the word VOTE NO ON 5!
October 24th, 2008 at 4:53 pm
The fact is these left wing advocates can spin this anyway they want,but the facts are a two week short term loan shouldnt be held to an APR to judge weither it’s a good deal for the consumer or not.15.00 per hundred is 15% and theres not an economist any where that will state different.GREAT JOB AGAIN MARC!Your right on as always.VOTE NO ON 5
October 25th, 2008 at 7:09 pm
99% of Americans need to borrow $$ at some point in their lives- student/auto loans, mortgages, credit cards, etc. Why should getting a short term loan be anyone else’s business? It’s a CHEAPER option than paying bounced check or late fees. Certainly better than doing without gas, electricity, water or food until the next paycheck.
This is a business, just like any bank, store, airline, gas station, etc. We provide a service. If you choose not to use it– so be it your choice. If you decide it’s the best option for you- so be it your choice. If you decide to repreatedly use payday loans as a means to survive/supplement your income- so be it your choice.
ITS MY $ & it’s MY CHOICE!!
**** NO on 5!!!****