Payday lenders, pawn shops, auto securities lending and rental shops with option to buy. For-profit companies that feed on the desperation of people in financial crisis. How many of these greedy businesses are in your city and county?
Let me be clear: Profit is not a bad word. America is a democratic society based on capitalism. Uncapped interest rates and fees in addition to fees in addition to fees are dirty practices.
According to the Business Dictionary, a for-profit organization is defined as “a business or other organization whose primary purpose is to make money (a profit), as opposed to a non-profit organization which focuses on a goal such as helping the community and caring about money only as much as necessary to keep the organization running.
Nonetheless, a predatory business must have prey to remain profitable. And consumers are the prey. A lion prowls around looking for a sign of weakness in a gazelle, then leaps up. But hidden lenders are wiser: they dress up as sheep to lure cash-strapped consumers into their debt trap. I got you!
Unfortunately, customers are turning to these great alternatives. Default on a loan lender and a multitude of fees appear from the fine print on the signed contract. The cost of quick money and convenience is staggering and staggering. Just google and read the polls and studies.
A payday loan (that is, a small dollar loan, payday advance, payday loan, payday loan, or cash advance loan) is meant to be a short-term loan.
“But we should only be used for the occasional financial emergency,” say the lenders. This is how owners and managers justify business. “We care about people. This is why we were here. Truly? How much do you care when you repossess an individual’s vehicle? Or resell a pawned diamond engagement ring? Or take back furniture and appliances?
The Wall Street Journal reports that the average consumer of a payday lender makes 11 transactions per year. But, there are new regulations. “The Consumer Financial Protection Bureau’s rule requires payday lenders to assess whether borrowers can repay loans and limit rollovers, when customers take out new loans to pay off old ones – a practice that often leads to snowballing fees. », According to a 2017 article. www.wsj.com/. The law regarding payday loans varies depending on where you reside.
It’s a sad reality in the United States: Federal and state government agencies must step in and get unscrupulous businesses to play fair. “Follow the money trail” – a popular phrase used by journalists and reporters. Where does the path of green greed end?
Yes, unexpected things in life do happen. How can a legitimate business provide quick loans to Americans with bad credit history, while making a fair profit, without valuing consumers?
Ohio Payday Lenders
A payday loan is a short-term loan based on a post-dated check in anticipation of a person’s next pay period. Set-up fees and interest are added to the cost of a loan. Policy Matters Ohio visited and called 69 payday loan stores in Ohio to explore the costs, terms and conditions of payday loans. Read the 2009 report at www.policymattersohio.org/.
In 2018, Governor John Kasich signed House Bill 123: The Fairness in Lending Act, a bill designed to save Ohio consumers millions of dollars in interest rates and payday loan fees. Notice the word “fairness”.
Ohio Pawn Shops
According to several websites, pawn shops are less risky than payday, title or cash advance loans. However, people with a credit crisis or separated from their jobs will lose their belongings at a fraction of their value if they are not recovered. And regulations vary from state to state.
Ohio pawn shops are licensed and regulated by the Financial Institutions Division of the Department of Commerce. Visit www.com.ohio.gov. Carefully read the Ohio Pawnbrokers Act (Chapter 4727). Interest Charge (4727.06): No pawnshop shall charge, receive or charge interest on a loan exceeding six percent per month or fraction of a month on the principal outstanding. Interest will be calculated monthly on the amount of principal remaining unpaid on the first day of the month and will not be compounded. www.codes.ohio.gov/orc/4727.
Ohio Car Title Loans
A car title loan is a small, short-term, high-rate loan that uses your vehicle’s clear title as collateral. The amount you can borrow is based on the value of your car or the equity you have in the vehicle.
“The Federal Trade Commission (FTC), the national consumer protection agency, advises you to curb and understand the costs of an auto title loan. You may want to consider other options. A car title loan will put your car at risk: you could lose one of your most valuable assets and your means of transportation. www.consumer.ftc.gov/articles/0514-car-title-loans.
The typical borrower often pays more than 300% per year, according to a joint study by the Center for Responsible Lending and the Consumer Federation of America.
In addition to high interest rates, auto title loans typically include a number of fees: processing fees, document fees, late fees, set-up fees, and lien fees. I am surprised that there is no charge for putting a charge on multiple charges!
Rental stores with option to buy in Ohio
Ohio is home to about 140 Rent-A-Center stores, the third highest in the country according to a 2017 report from FOX 8 News. “Almost 200 consumers have complained to Ohio Attorney General Mike DeWine of Rent-A-Center in the past five years.” www.fox8live.com/.
David Rothstein investigated the Rent To Own Industry in Ohio in 2009 for Policy Matters Ohio, a consumer advocacy group. www.policymattersohio.org.
If you believe you have been treated unfairly in a transaction with a consumer, file a complaint with the Ohio Attorney General’s office at www.OhioAttorneyGeneral.gov or 800-282-0515.
Should predatory payday lenders, pawn shops, auto title lenders, and option-to-buy rental shops be allowed to operate in Ohio? What do you think?
Scope: Melissa Martin, Ph.D, is an author, columnist, educator and therapist. She lives in Scioto County. www.melissamartinchildrensauthor.com. Contact her at [email protected]