We like the fact that the payday loan industry remains creative and optimistic about its future. Could that be because we interface with our customer every day thus gaining tremendous insight into their needs? Unlike those who continue to attack our industry without doing the work necessary to understand the payday loan industry and our customers?
Ohio regulators recently decided they know what’s best for all of us by attempting to destroy our product and reduce the financial choices available to their residents. This despite the fact there have been virtually zero complaints by consumers regarding our industry.
Had the regulators attempted to learn as much about the payday loan customer as we have, they would have learned our product cannot be stopped. By eliminating the ability of payday loan stores to maintain physical locations in their state they have simply forced residents of Ohio to secure their small $200 to $1000 emergency loans from payday loan call centers and Internet sites residing in other states and offshore.
Thus the state of Ohio loses licensing fees, auditing revenue, jobs for Ohio residents (estimated to be 6,000+) and, most importantly, the ability to protect their residents from abuse, due-process, and privacy concerns.
Meanwhile, us pesky payday loan operators are creatively developing new products and methods in order to continue to help residents of Ohio meet their emergency financial needs AND make a buck.
Since controversial House Bill 545 first cleared the state House of Representatives in April, six payday lending companies have sought licenses to make loans under the state’s Small Loan and the Ohio Mortgage Loan acts. Not as lucrative as payday lending, short-term loans permitted under either statute can be made with the equivalent of triple-digit annual percentage rates – similar to the combination of fees and rates that prompted lawmakers to target the industry with H.B. 545.
Payday lenders still must determine if we can remain profitable by making small, short-term loans, and face the legal difficulties. But these license applications indicate those of us in the payday loan industry are not willing to quit Ohio, our customers, or our revenue streams.
“We’re looking for ways to continue to service customers,” said Jeff Kursman, a spokesman for Mason-based Check ‘n Go, which applied for 73 lending licenses under the Small Loan Act. “Nothing is off the table.”