BuckeyeBlog

It’s that time of the year when newspaper editors tell you how you should vote. There are a number of them saying you should vote against Issue 5, the payday lending referendum. Most of these editorials are filled with factual errors.

For instance, the Chillicothe Gazette claims that “data shows more than 99 percent of payday loans go to repeat borrowers.” The Zanesville Times Recorder says, “study after study has shown that payday loans lead too many people into financial ruin.” Really? I’d like to see these data and these studies. I’ve looked over the scholarly data on payday lending and the only studies I have seen that say these things are ones put out by blatantly biased entities like Policy Matters Ohio or the Center for Responsible Lending. There are a number of unbiased scholars who have looked at this subject and concluded exactly the opposite of what these newspapers claim (see the footnotes of my report on payday lending for a list of these studies).

The fact is that the editors of these newspapers, the legislators who supported the payday lending ban, and the governor who signed it into law knows the real facts about payday lending. It is evident given their comments on the issue. It’s a pretty sad day for public policy when flawed reports from biased interest groups persuade the state to ban a product that is popular with the public.