July 30, 2014

Elyria
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UPDATED: Ohio High Court rules loan to Elyria man not prohibited under lending laws

COLUMBUS — In a victory for payday lenders, the Ohio Supreme Court ruled Wednesday that a two-week loan to an Elyria man that imposed interest of more than 235 percent is not prohibited under Ohio’s mortgage lending laws.

In a unanimous decision, the court sent Rodney Scott’s case against Ohio Neighborhood Finance, owner of Cashland stores, back to the trial court for further proceedings. He would have paid interest of less than $6 if he’d paid back the loan on time, but faced the higher fees after missing his payment.

Advocates for Scott sought to close a lending loophole that has allowed such payday-style loans to continue as interest-bearing mortgage loans despite a state crackdown on predatory short-term lending passed in 2008.

The high-stakes case was closely watched by lenders and consumer groups that lobbied for the 2008 law and successfully defended it against a repeal effort on that year’s ballot.

A lower court ruled Ohio lawmakers clearly intended the 2008 law, called the Short-Term Lender Act, or STLA, to apply to payday loans, but justices found Wednesday that the law as written does not have that effect.

“Had the General Assembly intended the STLA to be the sole authority for issuing payday-style loans, it could have defined ‘short-term loan’ more broadly,” Justice Judith French wrote for the majority.

Justice Paul Pfeifer cited the fact that not a single lender has signed up under the terms of the 2008 law as proof of its ineffectiveness, chastising the Legislature where he once served for passing a bill that was all “smoke and mirrors.”

“There was a great angst in the air. Payday lending was a scourge. It had to be eliminated or at least controlled,” he wrote. “So the General Assembly enacted a bill, the Short-Term Lender Act, to regulate short-term, or payday, loans. And then a funny thing happened: nothing.”

Bill Faith, executive director of the Coalition on Homelessness and Housing in Ohio, said a clear message was sent when state lawmakers passed payday lending restrictions in 2008 and 64 percent of Ohio voters then upheld key provisions of the law.

“They’re doing legal gymnastics to arrive at this notion,” he said. “We have this Wild West of lending in Ohio. People are operating doing all kinds of loans under statutes that were never intended for those kind of loans.”

A message was left with Cashland’s parent company seeking comment.

The court said its ruling provides an opportunity for state lawmakers to revisit the 2008 law — passed under a Democratic-led House and Republican-led Senate — to clarify its intent.

“It is not the role of the courts to establish legislative policy or to second-guess policy choices the General Assembly makes,” French wrote, suggesting that advocates for Scott in the case were urging a position on the court “fraught with legislative policy decisions” that are outside the court’s authority.

  • luvmytoaster

    Bottom line…..stay away from these payday predators.

  • mdr12372

    Horrific. What a disgrace.

  • John Davidson

    The person who uses these type of loans should know what they are signing. No excuses for not reading the fine print.

  • Pablo Jones

    It is a short term loan and for a 2 week period the interest is about 3.5%. So for a $500 loan they would owe $518. These are meant to be short term loans, not 6 month loans. If you want long term loans go to a bank. The reason these people don’t go to the bank is because they are high risk and the bank won’t loan to them. To make up for the higher risk you change a higher interest rate. Nothing wrong with these companies.

  • SniperFire

    ‘Bill Faith, executive director of the Coalition on Homelessness and Housing in Ohio’

    Who cares what this guy thinks? Do we REALLY need gubmit to tell a bad credit risk that she can’t borrow $500 and pay it back at $580 a week from now?

  • golfingirl

    “Someone who’s in desperate need of $500 today isn’t going to have an extra $590 two weeks from now.”

    Maybe the borrower should understand this BEFORE they borrow the money.

    Again, people not taking responsibility for their actions. Where is the personal accountability.

  • stop ur whining part deux

    This guy has no one to blame but himself.

    1) do not live outside of your means.
    2) If you MUST take a loan make sure you understand the interest and any penalties that you may incur for missed payments
    3) PAY YOUR BILLS ON TIME!!!

    It is called personal responsibility folks. That just happens to be something seriously lacking today. It is always someone else fault.

  • RustbeltRick

    In the past, usury laws prevented such abuses. Now these sharks can do whatever they want and apparently judges are cool with that.

    • golfingirl

      No, judges are not “cool” with it.

      They interpret the laws as written, and this law was poorly written and did not serve it’s intended purpose.

      So, are the courts once again expected to bail out another group of people for making a bad personal decision?

      You sign on the “dotted line,” you pay what you committed to. It is called personal responsibility, something which seems to be in very short supply these days.

      • RustbeltRick

        The Bible I’m reading says anyone who exploits the poor through usury is evil. If you can find a verse that says the poor only have themselves to blame when they find themselves in an exploitative relationship, please share.

        • SniperFire

          You are spinning. Should there not be a place for the high risk person to borrow money to, say, fix her brakes, then?

        • golfingirl

          And the Bible also teaches personal responsibility.

          An “eye for an eye, a tooth for a tooth”….to use just one example.

          You commit the act, you pay the consequences.

          • TruthWhisperer

            1 Timothy 2:11-15

            11 A woman[a] should learn in quietness and full submission. 12 I do not permit a woman to teach or to assume authority over a man;[b] she must be quiet.

            Lets see how devoted you are to that book, Or do you just Cherry pick like the rest of them?

            Now remain quite as your Lord Savior has said

          • Pablo Jones

            Well who can learn when it is loud? And if you don’t submit to learning, you aren’t going to get much out of it.

            For verse 12 you only need to watch an I love lucy episode to understand that one.

        • Pablo Jones

          How about thou shall not covet? Isn’t that what they are doing, they are getting a loan because they want things they can’t afford?

          • ekwaykway

            Not necessarily, they may be needing something important. Granted payday loans suck, but if you’ve never been poor, you might not understand.

          • Pablo Jones

            So the money they do have they spend on the things they want, drugs, alcohol, cigarettes, cable, etc. For the things they need like food and rent they turn to the pay day loan people.

            I’ve known people that have used the pay day loan places. During the week they have plenty of money for the things they want because it is only $10-20 at a time. But come the end of the month when their big bills come they don’t have the money.

            I’ve lived off less than $500 a month before. I’ve opened the refrigerator and looked for food when all there was was condiments. I never thought I’m going to go get a loan so I can go get wings and beer.

          • ekwaykway

            What planet during what time period did you “live” off less than 500 a month? You’re generalizing Pablo, not all working poor are as nefarious as you seem to think.

          • Pablo Jones

            That would be this wonderful blue ball of a planet. If I were able to travel between planets I would be very rich right now. And that was only a decade ago. It included rent, utilities, food, and gas.

            I’m generalizing? So there are no poor people that smoke? According to the CDC 28% of those in poverty smoke. And 45% drink alcohol. Over 60% have cable or sat. I hardly think I am generalizing if I say the poor or working poor are living beyond their means by spending on their wants instead of just their needs.

          • ekwaykway

            See my above post.

    • Bill Love

      Just dont borrow the money if you cant afford it pretty simple

  • Monique Guerrero

    I think it’s funny that all branches of government justify bailing out large companies, for large amounts of money. Companies with the execs having huge salaries and bonuses. Those folks are able to live outside their means because of everyone’s tax dollars. However, a man can be charged over 200% interest and it’s his fault and NOW we should stand up as a community against people ‘leeching’ off our money? That is literally the craziest thing I have ever heard. No one wants to use payday lenders, but people live outside their means because of a lack of credit and a lack of assets to begin to build credit. To build credit, generally, you have to go in debt. BUT if you cannot manage past paycheck to paycheck and a car breaks down, a kid or yourself breaks a bone; those bills need to be paid and taken care of. you need that extra 500 now for new brakes so you can continue to work and generate an income. Now, you’re in this situation and it’s your fault? That’s completely illogical. The moment that this option is the only viable option for poor people is the same moment everyone should stop being surprised that theft, drugs and violent crime exists; because those are the next best options for supplemental income that’s fast….

    • SniperFire

      Nice try, but this has nothing to do with bailing out the Unions with tax dollars. .

      • TruthWhisperer

        You spelled Wal-Mart wrong

        • SniperFire

          You mean Board of Directors Hillary Clinton’s Walmart?

          LMAO @ hypocrisy.

          • TruthWhisperer

            Hypocrisy that you perpetuate.

            PS Hillary was on it from between 1986 and 1992,

            but dont let facts get in the way of your reality

            Haha Sniper fart

    • golfingirl

      So what exactly do you suggest?

      If these businesses can’t make money, then they will be gone, leaving these “folks” no options to have their “brakes fixed.”

      So are car repairs now an entitlement as well?

    • golfingirl

      Companies pay execs “huge salaries and bonuses” because they perform.

      In a publicly traded company, the stockholders have a voice and agree to pay them, because they want competent leadership, so they too can make money.

      You say “…..a man can be charged over 200% interest and it’s his fault. and NOW we should stand up as a community against people ‘leeching’ off our money?”

      Guess what….It is his fault!!! He took out the loan, he pays it back.

      I am so tired of paying for others stupid decisions! Or should I dare say, stupid people who make poor decisions.

    • SniperFire

      ‘Now, you’re in this situation and it’s your fault?’

      Yes. I am sure you were raised thinking the world owes you a living.

      • Monique Guerrero

        I do not think the world owes anyone a living. I am a single mother and pay for school with work and loans. I do not get child support or food stamps. I work very hard and save money and I rent from a duplex, without help. Yes, that means no child support either. I would not work this hard if I felt it should already be “owed” to me. And it is because of the excellent figures that raised me. My great-grandmother raised me during the first part of my life. Although she was a very conservative republican, she believed in people more than corporations. That doesn’t mean welfare, but it means not hurting the public for a couple people at the top of the food chain. I don’t think fairness always means that rich people should give more to poor people because they are rich, in laymans terms. I think it means that rich people should not take from poor people just because they can. That, to me, is not fair. Loan interest makes sense. The fact that 200% interest can exist, does not make sense.

        • SniperFire

          ‘ but it means not hurting the public for a couple people at the top of the food chain.’

          ‘ she believed in people more than corporations.’

          Mindless Leftist psychobabble that means nothing.

          ‘ I think it means that rich people should not take from poor people just because they can.’

          What does that stupidity actually mean? Are you aware that the rich pay a greater share of EVERYTHING in America than at any time in our history?

          You spout meaningless tripe which you don’t even understand, just like you have been taught.

          • http://www.google.com/image/pugs Monique

            In layman’s term, I think rich people and corporations have more power than the general public because money is power. I don’t think money is bad. I don’t think they are bad because they have money. Money is good. I think unchecked power is bad. I think taking more than what is fair just because you are more powerful is bad. I do not believe in communism. I believe everyone should work hard and they get what they earn and I don’t think businesses or rich should pay more just because they are rich. I do think they should not be able to take more than what is fair just because they have more power and resources than the people they are taking advantage of.

            There is no psychobabble being used. I am just expressing my opinion, of which I do understand. I am no to a member of MENSA. Despite that, I manage to demonstrate a significant amount of intelligence and I’ve done more than alright on IQ tests.

            I’m pretty open-minded and I try to keep Socrates in mind when I originally disagree with someone or something. He said the only true wisdom is knowing you know nothing. He came up with the Socratic method, which is an excellent way of getting rid of ideas that don’t make sense and illuminating others. So, I’m fully open to what you are saying without name calling and personal attacks. I know it can be frustrating when someone doesn’t agree with you initially. As much as commenting can be a way to voice your opinion, it can also introduce different perspectives. Maybe that’s not what you’re into doing and you only want to have people agree with you.

            However, I am interested in expressing my perspective and seeing sides I haven’t maybe explored enough. If you don’t want to explain your side and would rather just use buzzwords and insult me, I respect your right to say what you want but ask you to keep the attacks to yourself. They literally do nothing but cheapen the interaction.

          • Pablo Jones

            ” I do think they should not be able to take more than what is fair just because they have more power and resources than the people they are taking advantage of.”

            What is fair then? What do you consider to be unfair? These businesses are not taking anything from people that don’t want to give it to them.

            What handouts are businesses receiving that you disagree with? What is the line between acceptable and unacceptable?

        • SniperFire

          ‘The fact that 200% interest can exist, does not make sense.’

          It was a 3.5% rate, and when the high-credit risk person did not pay, they were hit with late charges., Mensa candidate. Just because the article claims they were charged ’235%’ interest does not make it true.

          I’ll ask you the same question I have already asked, which is going unanswered. They make a 2 week loan on $500 to a bad credit risk. Said credit risk misses payment(s). Should the company not be able to charge the $30-40 in interest and penalty to them for taking such a risk?

    • golfingirl

      So, your LinkedIn profile states the following…..

      “Given the opportunity to be a part of SME that spear-headed the initiation of client policies on offshore sites in the Philippines”

      You are a supervisor for a company which provides outsourcing OVERSEAS for phone support.

      You are taking away jobs from the very people you claim to support.

      Are you a hypocrite? Help the poor, by sending their jobs to another country?

      • SniperFire

        Your typical Leftist is nothing if not a flaming hypocrite. LOL

        • TruthWhisperer

          Its called capitalism.

          The more you know

          • SniperFire

            Have yet to decide if you are an idiot or a troll.

            Hey, that isn’t mutually exclusive! LOL

          • TruthWhisperer

            You always been bad at making solid decisions so its nothing new for you.

            But at least I teach you something new everytime I school you so dont feel too bad

      • luvmytoaster

        Wow, nice job golfingirl!

      • http://www.google.com/image/pugs Monique

        You need to pick a side. You either think I’m dumb because he should find a way to pay that loan. And I shouldn’t feel that it is impossible to pay off interest of that amount and no one should be able to charge that amount.

        Or, that we should all just quit working for companies that support people overseas and not take loans. Just live in poverty.

        I say this because before TeleTech, which is in Amherst, I worked two jobs. I worked at Giant Eagle and McDonalds for two years. I worked overnight at fast food for that extra couple dollars and Giant Eagle gave raises as tenure increased, so I could pay bills and save money. I don’t believe in fast food and I think it’s detrimental to the health of communities. However, I have to pay bills. I didn’t LOVE that TeleTech had centers in other countries, but working one job allowed me to rest by only working there and set myself up to go to school. When people work towards a goal, that doesn’t mean they love every part of that path. Because I empathize with a man who had to take an ill-advised loan, does not mean much other than that I understand what it’s like to work very hard and not have much.

        Also, banks and loan companies have jobs overseas. Apparently you don’t care about that either because I’m pretty sure you have a bank account somewhere and you want those companies to get all the interest from a hardworking American.

      • http://www.google.com/image/pugs Monique

        Also, I’M TAKING AWAY JOBS AND SENDING THEM TO ANOTHER COUNTRY?

        If I could do that, I would be a member of the senate or congress. Maybe a lobbyist or a big business executive. That is not a life I have lived. I have lived a life of making the best with the environment I have been given and the job opportunities available. From how you present yourself, you should feel that it is the American way.

        You want businesses to make money or not? You think the businesses that are known internationally don’t employ people internationally?

        I’m just giving my opinion. And I did so without saying anything to attack you. I don’t need to look you up on another site to try to discredit you.. This comment did that for you.

        Sidenote: TeleTech is not the only company that does work for other companies within the US and offshore. Unless you are shopping at a truly local business, you are supporting companies that employ a signifcant amount of people offshore most of the time.

        • SniperFire

          ‘Sidenote: TeleTech is not the only company that does work for other companies within the US and offshore.’

          That is called bifurcation logical fallacy. You think your hypocrisy is justified because your company isn’t the only one (NOW WATCH AS I DROP SOME MINDLESS LEFTIST IDIOMS) ‘shipping our jobs offshore’ and being ‘not being fair to workers’ and ‘being greedy rich people’ and…. well, you get the idea. LOL

  • Melissa Merrill Snyder

    :He would have paid interest of less than $6 if he’d paid back the loan
    on time, but faced the higher fees after missing his payment.”

    It’s simple: If you borrow money, pay it back on time. Yes, you’ll pay a little but not a huge amount like 235%. These businesses are there because people use them and to make money.

    Borrowers need to be aware of what the costs will be if you don’t pay on time. I’m sure it’s spelled out.

  • Bill Love

    Last I checked people open business to make money and now in America when you do that you are the bad guy I cant believe where this country is at

  • ekwaykway

    Charging 235% interest is just a bit excessive, sorta like a loan shark, no?

    • Pablo Jones

      They charge about 3.5% for a 2 week loan. Hardly seems excessive to me. If they can’t pay it off in 2 weeks they shouldn’t take the loan.

      • ekwaykway

        Okay Pablo, 235% on late payment is not excessive.

        • Pablo Jones

          235% is the APR if they extend a 2 week loan out for a year. It is a 2 week loan not a multi-year loan. They turn to these places because there is a need for their services. These are people that can’t get credit cards or bank loans and there is a reason for it, they are high risk.

          Do you think these businesses would be around if they would only make 10 cents on a $100 2 week loan? That is roughly a 27% APR in the high end range of credit cards. Without these businesses where would these people turn if they really needed money? Actual loan sharks that would break their fingers or legs if they don’t pay up?

          • ekwaykway

            On second thought, them taking loans from sharks ain’t such a bad idea. That way when one dosen’t pay up, one sleeps with the fish.