Next Up Prostitution/Escort Services?

Payday Lenders Will Turn to Other "Adult Decisions?"

Yesterday, our good friend Jeff Dillman appeared on the Sound of Ideas on WCPN to talk about the loan sharks at the payday lenders trying to get around the wishes of Ohio voters. Jeff is the Director of Housing Research and Advocacy organization, and works on fair housing issue as well as predatory lending including payday lending. Dillman and Rep. Lundy of Elyria did a good job laying out the issues, and describing the new effort to close the loopholes in the current law with HB 209. I thought that Rep. Lundy did a great job talking about how he is just trying to enforce the desires of Ohio voters who supported the 28% loan restriction last November with over 60% of the voters affirming the payday loan limits.

Ted Saunders from Checksmart or Check'n'Go or Predatorypaydayloan or whatever his company is called was amazing. He did everything he could to sell the audience that this was a consumer choice issue. He was basically saying we are just as bad as banks and credit card companies, so why pick on us? He kept saying that his product was an "adult decision." I have to wonder if HB 209 passes will they move to other adult decisions and start running an escort/prostitution service. They could claim that they would do a better job then the guy on the corner, because they would be regulated. Mr. Saunders could claim, "Hey, we are better than the local pimps." They would maintain the employment of thousands of workers in Ohio and continue to pay rent on these stores they own. Saunders pitch was "Government should stay out of consumer choices, and these companies just want to be part of the 'Ohio landscape'"-- no matter how harmful their business model is to the local community.

There are many businesses that could bring jobs to the community, but what are the residual effects on the neighborhoods. Our society has not always taken into account the effects of decisions made in Columbus or Washington. Deregulating the banking industry turned out not to the best decision in the 25 years. Allowing usuary rates to go above 30% interest rate per year hurt our neighborhoods with increased debt, bankruptcy, and homelessness. Just because we get short term jobs in the neighborhood does not mean that we are better off. Prostitution, legalized drugs, gambling, eliminating consumer protections to cut the cost of government are all ways to increase jobs and revenue for government, but there are long term impacts on our cities. If we factor into the bottom line the residual impacts a business has on society, payday lenders and other businesses are a big negative for the community. If we have to regulate them out of existence: so be it! The Louis Guitierrez bill mentioned on the show (HR 1214) would effectively eliminate the Ohio law, and allow the payday lenders to charge up to 390% annual interest rate. This is a bad bill that NEOCH and others do not support. Finally, most consumer advocates would agree that there is a need for additional regulation of the bank and credit card fees.

Brian
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