What Issue 5 Means to Ohio Voters

Save

Posted: 8:52 PM Oct 28, 2008
Last Updated: 8:52 PM Oct 28, 2008
Reporter: Randy Yohe
Email Address: randy.yohe@wsaz.com

11 comments

A | A | A

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.

More Stories
AP: Sarah Palin Resigning as Governor this Month

Ohio Governor Strickland Addresses Budget Situation

Ohio Lawmakers Approve Temporary Budget

Ohio Lawmakers Expected to Vote on Interim Budget, Slot Machines

Kentucky Special Session Wrapped Up Wednesday

UPDATE: Former WV Delegate Pleads Not Guilty; August Trial Set

Gambling Measure Fails in Kentucky

UPDATE: Byrd Resuming Some Duties, Still in Hospital

Comments are posted from viewers like you and do not always reflect the views of this station.

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!!

Posted by: Jeff on Oct 29, 2008 at 05:19 PM
I know a guy who deperately needed a $400 loan from one of these places or have his electric shut off among other things. 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 of forking out most of his check (which is what they actually want you to do) It was a trap he was stuck in for 1 year, and he paid them a total of, get this...$1,440 in fees. What's even worse is that something happened that he couldn't pay one pay period so they took the check he had written to the bank to cash, it bounced because he didn't have enough to cover it. He had to pay the bank $460 an overdraft fee, the loan sharks filed a small claims against him and he was ordered to pay so much per month to these people until paid in full. These people got a total of $1,900 off this family from a $ 400 loan and STILL sued him for default. In addition the guy had to pay court cost. These places need regulated!

Posted by: YesOnIssue5 on Oct 29, 2008 at 04:09 PM
Trapping people in debt is not financial freedom! Don't dismiss the 391% interest rate just because it's in APR terms. Since the current payday system often leads to multiple loans, it's a pretty fair idea of how people in need end up being trapped in debt. Also, the Fed has required since 2001 that small loan lenders clarify their rates in APR terms so customers could compare them to other types of loans. Vote yes on issue 5 and make the rates on these loans fair! http://www.yesonissue5.com

Posted by: Anonymous on Oct 29, 2008 at 12:54 PM
This needs to pass!!! Thats all there is to it!!!! I think that its way better to pay 28% interest than the 391% that is just crazy...Yes everyone these days needs money but I know first hand the trap you fall into when you do payday lending its a never ending cycle that needs stopped or reformed!!!!

Posted by: Casey on Oct 29, 2008 at 10:55 AM
Forget if you agree with pday loans or not- FOCUS on the fact that the OGA thinks they have the right to control what financial options are available in Ohio. Big brother style FOCUS on the fact that other adults are capable of making their own decisions, based on their life. Who are we to say no, you can't use that credit card/that bank? FOCUS on the fact that eliminating pday loans DOES NOT eliminate the need for short term financial options. FOCUS on the controlling & spending of our household $ by the state. The gov't has shown they are not responsible or budget conscious. Ohio /> 60M in debt! FOCUS on what else the gov't is going to decide (under the guise of paternalism) that we aren't capable of handling. Restricting how much $ on food/alcohol/cigarettes/housing/gambling /clothes? FOCUS on the fact that the OGA is intruding on personal financial decisions-where does it stop?! The Issue is WAY bigger than PD Loans- its a BASIC FUNDAMENTAL RIGHT! *NO on 5*

Posted by: Tom on Oct 29, 2008 at 09:50 AM
It's only confusing because the payday lending industry has spent $18 MILLION to dupe Ohio voters into thinking that 391% APR equals financial freedom! There are hundreds of thousands of Ohioans trapped in the never ending cycle of payday lending debt. This is a predatory and defective product that needs reforming. The only way to reform the industry is to VOTE YES ON ISSUE 5! http://www.yesonissue5.com

Posted by: hello on Oct 29, 2008 at 08:58 AM
These payday places are a racket anyway. I can see for a short term loan maybe, like one month, but for longer, people you are crazy! I understand not everyone has money to access or to fall back on. I've been there too. I've heard too many people get into trouble with these places. It's something to seriously think about.

Posted by: Janie on Oct 29, 2008 at 07:48 AM
This explains this in a way I hope people understand I myself have been so confused as to what it meant but this makes it clear. I hope this passes to prevent these places from charing the crazy interest they do it is insane the amount of money they charge..

Posted by: vote no on Oct 28, 2008 at 11:06 PM
If you vote yes....you will not have payday loans, companies cant operate on those fees. When you need a little extra money between your payday then where will you go? The rate is 15.00 per hundred, pawn shops charge 30.00 per hundred. The 391% rate is if you borrow the same amount every 2 weeks for a year. Just how much would you be charged if you did a cash advance on your credit card? And how long would it take you to pay it back? This is America we are suppose to be able to do as we wish with our money, not let the government decide.

Most Popular Political Stories
1.	Obama Called Out for Comments About Bankrupting Coal Fired Power Plants
2.	AP: Sarah Palin Resigning as Governor this Month
3.	Tax Rebates for Senior Citizens
4.	Byrd Remains President Pro Tempore
5.	Corridor H Project Stands to Lose in Obama Budget Proposal
6.	Gambling Bill Passes KY House, Now Heads to Senate
7.	Ohio Lawmakers Expected to Vote on Interim Budget, Slot Machines
8.	WV STATE OF THE STATE: Proposed Teacher Pay Boost May Not Satisfy Unions
9.	Ohio Governor Strickland Addresses Budget Situation
10.	Former Alaskan Senator In Charleston

U.S., Russia try to repair frayed relationship
Presidents Barack Obama and Dmitry Medvedev end a seven-year hiatus in U.S.-Russian summitry on Monday, with each declaring his determination to repair a badly damaged relationship.
Rove: Palin playing with 'risky strategy'
One of Alaska Gov. Sarah Palin's potential presidential rivals say her abrupt resignation won't help her dodge scrutiny. But former White House adviser Karl Rove says her strategy is, at best, unclear.
Weary Palin seeks to regain control
Why did Sarah Palin step down? Some of the people close to the Alaska governor say she wanted to regain control of a script that slipped out of her hands when she burst onto the national stage.
Obama backs Medvedev's judicial reforms
President Barack Obama said strengthening human rights and the rule of law in Russia should be a part of the much-heralded "reset" in U.S.-Russian relations, according to an interview with an embattled Russian opposition newspaper.
Biden: Israel free to set own course on Iran
Vice President Joe Biden signaled that the Obama administration would not stand in the way if Israel chose to attack Iran's nuclear facilities, even as the top U.S. military officer said any attack on Iran would be destabilizing.

	Healthy Tri-State Live a healthier lifestyle in 2009
	SOMC Very good things are happening here
	Moms4Moms By moms, for moms
	WV Lottery Nightly drawings and numbers
	Big Sandy For all your furniture and appliance needs