Sarah Byrnes of Americans for Fairness in Lending is an occasional guest contributor to Caveat Emptor.
In addition to all the other excitement surrounding this election, Ohioans and Arizonans will get the chance to vote on payday loan protections on November 4. If you live in either of those states and you read this blog, you have probably already figured out the consumer-friendly position on those measures (Ohioans, vote “YES” on Issue 5; Arizonans, vote “NO” on Prop. 200).
FYI, if you are somehow still undecided about the presidential election, check out AFFIL’s Voter’s Guide which spells out the positions of Senators Obama and McCain on credit cards, mortgages and foreclosures, bankruptcy, and other issues.
If you’re not from Arizona or Ohio but know folks who are, please make sure they can see through all the advertising hype the industry has paid for, and let them know what the measures really mean. The Ohio Coalition for Responsible Lending and Arizonans for Responsible Lending have great websites on the ballot measures. Here’s a sample what they say:
Ohio: “If majority of Ohio voters vote no [on Issue 5], lenders will be permitted to continue charging 391 percent annual interest. If a majority of Ohio voters vote yes, interest rates will be capped at 28% APR. Outrageous fees and short repayment periods are what lead most borrowers into the DEBT TRAP.”
Arizona: “The so-called Payday Loan “Reform” Act would allow the payday lenders to bleed hard-working Arizonans with 400% interest rates. Forever. The payday lending industry doesn’t want you to know it, but when it comes to protecting your pocketbook at the ballot box this November – and TRULY cracking down on unscrupulous payday lenders – “no” will mean “yes.” A “NO” vote on the payday industry’s Prop 200 will mean “yes” to capping payday loans at 36% interest once and for all.”
Payday lending is currently illegal or not feasible in 14 states, though if the Ohio measure doesn’t pass, that number will drop to 13.