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Posted: 8:52 PM Oct 28, 2008
What Issue 5 Means to Ohio Voters
Just as Ohio's Issue 6 has baffled many state voters, Issue 5 has caused some confusion of its own.
Reporter: Randy Yohe Email Address: randy.yohe@wsaz.com |
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11 Comments
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SOUTH POINT, Ohio (WSAZ) -- Just as Ohio's Issue 6 has baffled many state voters, Issue 5 has caused some confusion of its own.
Essentially, Issue 5 is a referendum on the state's payday lending law, specifically Section 3 which sets loan rates and terms.
Here's how it breaks down: voting yes would put the new law fully into effect and would cap interest rates at 28 percent per year, limit borrowers to a maximum of four $500 loans per year and give borrowers at least 30 days to repay the loan.
A no vote would overturn that section of the law and allow payday lenders to continue charging $15 per $100 borrowed for two weeks -- which works out to 391 percent annual interest. They also would be permitted to make loans up to $800 maximum with no minimum time for repayment.
Voters we spoke with said they found the language a little confusing.
Latest Comments
Posted by: Ed
on Nov 3, 2008 at 11:06 AM
VOTE NO ON ISSUE 5. Voting yes will effectively put payday lenders out of business. No payday lender can issue loans profitably with the 28% APR cap. This is equal to making $2.33 loaning $100 for an entire month. Assuming a "reasonable" default rate of 2%, PD lenders would make $0.33 per $100.00 loaned. This is less than the cost of the paper they use to issue the loan. PD lenders are heavily regulated, Jeff. They are required to be licensed by the Dept. of Commerce and pay a $750 annual license fee. When PD lenders are driven out of business, people who desperately need quick cash will either go to a real loan shark or get screwed by out of state PD lenders who charge much higher fees (see Nationalpayday.com - 1,300% APR and instantpaydaycash.com - 1,564% APR)
Posted by: mark
on Oct 30, 2008 at 06:58 PM
vote no on issue 5.our government is suppose to be our employees.if i need to borrow $100 and pay back $115 that is my business.the government has no right to tell its' employers how to borrow ,spend,or pay their money.not everyone in Ohio wants to be trapped by the credit card companies.not all ohioans can get loans from banks or financial institutions.some would prefer not to go that route anyway.it would be senseless if you need $100 to try to get that from any finance company or bank.you can not borrow that amount.they always start your loans at &500 or more and their apr adds to more than a measly $15 per $100.SO VOTE NO ON ISSUE 5
Posted by: Casey
on Oct 30, 2008 at 09:53 AM
Hey Jeff-- "His intention was to pay it back in it's entirety on payday, but when the time came it seemed much easier to pay only the $60 fee and renew it instead". So let me see if I understand this correctly...HE *made the decision* as an adult to take out another loan? But somehow this is the PD lenders fault? Was a gun held to his head? Hmmm, nothing like passing the blame along to someone else and not taking responsibilty for actions. As for taking him to court-- shouldn't loans be paid back? Don't the lenders have a right to recover the money they "LOANED"?? It's a loan not a freebie. As for cashing his checks, he SIGNED a CONTRACT that states that is an option available to the lender. So let me guess he didn't read the contract and that is also the PD lenders fault right?? Just because your friend made poor choices, does not mean everyone who uses a PD loan does so as well. And to make that generalize based on your friend's choices is wrong! VOTE NO on ISSUE 5!!
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