2000 Gather on Ohio’s State Capitol Steps in Support of Payday Lending
May 6, 2008Employees, Customers Urge Lawmakers: Save Jobs, Protect Consumer Credit Choices
COLUMBUS, OH- More than two thousand payday lending customers and industry employees took to the steps of the Capitol today to protest a ban on payday lending being considered this week in the Ohio Senate.
Holding signs reading, "28% APR=6,000 Lost Jobs" and "My life. My credit. My choice!", an estimated 2000 payday lending supporters voiced their concern for legislation that would close down the industry in the state, leaving more than 6,000 Ohio residents out of work and leaving hundreds of thousands of Ohioans to choose between less desirable, more costly credit alternatives.
The bill, H.B. 545, imposes a 28% annual interest rate cap on fees, allowing a fee of 8 cents a day, not enough for the lender to pay employee salaries and benefits, rent or other overhead costs.
Speaking at the rally, D. Lynn DeVault, president of the Community Financial Services Association of America, said, "Make no mistake about it: if this bill passes, more than 6,000 people will lose their jobs and a short-term credit option will be yanked away from the hard-working people of Ohio. Ohio's working families deserve better."
"It's easy for people who have nothing to lose to call for a ban. Their jobs aren't on the line and they have probably never needed a payday advance," said DeVault.
DeVault cited recent research by an economist at the Federal Reserve Bank of New York that found a ban on payday lending resulted in increased credit problems for consumers.
"No business, not a credit union, not a bank, not even a non-profit can lend money for less than 10 cents a day," said Jamie Frauenberg, President of the Ohio Association Financial Service Centers and Executive Vice President of Ohio-based Checksmart. "I am telling you today that my company would no longer be able to operate in Ohio. My employees would be let go and our doors would be shuttered. My customers would be forced to use alternatives they previously tried to avoid."
Referencing the GoodMoney payday loan product offered by the Goodwill, a non-profit, tax-exempt charity, Frauenberg said the $9.90 per $100 fee they charge to break-even equates to a 252% APR. Said Frauenberg, "Even the Goodwill could not offer payday loans in Ohio under a 28% APR cap."
"Twelve years ago I recognized the demand for short-term credit and sponsored legislation to create comprehensive protections for Ohio's consumers," said Senator Bob Schuler. "The law was, and continues to be, one of the strongest payday lending laws in the nation. After twelve years, additional reforms may be needed, but let's focus our efforts on saving jobs and making sure that hard-working Ohioans have access to credit," said Schuler.
Frauenberg said that in the past month, more than 50,000 letters, emails and phone calls have been sent to state legislators and the governor from industry employees and customers, urging policymakers to stand up and protect their jobs and their credit choices.
He said the industry has been working closely with interested legislators to support legislation that would offer consumer protections while allowing the industry to continue offering access to short-term, small-dollar credit.
Also speaking at the rally were: Gloria Hayter, Co-Owner Cash Pal; Karen Finley, Advance America employee; and David Davis, Check ‘n Go President and CEO.
Media Contacts:
Lisa Ferguson 614-975-3374
Yancy Deering 513-673-6590
Jeff Kursman 513-284-9530
The Community Financial Services Association of America (CFSA) is the only national organization dedicated solely to promoting responsible regulation of the payday advance industry and consumer protections through CFSA's Best Practices. As such, we are committed to working with policymakers, consumer advocates and CFSA member companies to ensure that the payday advance is a safe and viable credit option for consumers. Visit www.cfsa.net.
For up-to-the minute information on the payday advance industry, check out CFSA's new blog, www.paydaypundit.org.
