Payday loans in Ohio

Legislation is pending that would change the way these loans are made.

Change could be on the way for payday lenders in Ohio. A push in Columbus may cut down on the fees, but insiders say it would also put them out of business.

If you're looking for money, you might be tempted to look into a payday loan store, but before you borrow, listen to someone who was once on the other side of the glass. "I know for a fact. I know people that, as we stand here right now, have as many as 9 and 10 payday loan companies out. They will never get out of debt. Absolutely never get out of debt."

That's from Chris Browning, who worked in the payday lending industry more than 10 years. She contends the business model preys on those who can't pay off a loan. "That's their bread and butter. That's what they depend on is repeat customers. Every two weeks, you pay it off on a Friday, you come back on a Saturday and re-borrow."

Browning offered her testimony to Ohio's house of representatives last month. The 61-year-old is backing legislation which would place strict regulations on payday loans.

You may have seen the commercials on the flip side, against the bill. They say, "Some politicians want to limit your financial choices. Contact your legislator to keep payday loans in Ohio." They argue the loans are reasonable. "Payday loans cost $15 for a $100 loan. That's it."

In November, 13abc first reported on the proposed payday legislation. It aimed to reduce the 391 annual percentage rate to a 36% APR. Lawmakers have since revised the bill, seeking to lower the rate even more, to 28.

A statement by lender Checksmart says the bill if signed into law "would put licensed payday lenders out of business in the state of Ohio. That would open up the floodgates of unregulated internet lenders. It's certainly not protecting consumers to have them go online and have them get loans from somebody in the Bahamas, or somebody in Mexico."

Checksmart alone employs 728 people in Ohio. An industry-wide shutdown might leave an estimated 6,000 Ohioans unemployed.

The payday lending business itself has kept Sue Daughtery on her toes. Daughtery is the director of Serving Our Seniors in Sandusky. She explains that several of her cases have gotten caught up in quicksand cash. She told us, "I feel certain that they're taking advantage of these people."

Daughtery says, "Just by looking at their financial assesment, you don't even know where they're getting grocery money because they have so much debt to payday lenders." Daughtery also testified in Columbus. She says the industry needs to be regulated to protect those on fixed incomes.

This brings us back to Browning, the former insider, who claims her company instructed her to market to senior citizens. She says she was told "this is part of the job responsibility."

Her former employer responded with this statement: "We market to a middle-income client that has a potential need for our services, but we don't specifically target any division of age, race, any socio-demographic." That payday lender goes on to say people age 65 and older make up a little more than 3 percent of its overall customers.

Right now, the bill has passed through the House and is under consideration in the Senate. If it becomes law, you may get cheaper loans and you may see fewer payday lenders.

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